DRAFT REGIONAL INDUSTRIAL DEVELOPMENT STRATEGY SOUTH AFRICA

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1 DRAFT REGIONAL INDUSTRIAL DEVELOPMENT STRATEGY SOUTH AFRICA Promoting industrialization through partnerships This report is solely for the use of dti personnel. No part of it may be circulated, quoted, or reproduced for distribution outside the dti without prior written approval from the dti.

2 SPATIAL DISTRIBUTION OF GVA per 50km Mesozone The map below shows the heavily biased distribution of economic activity in South Africa with the majority of Gross Value Added (GVA) clustered around three major metropoles LEGEND District Councils Windhoek Provinces Distribution of Ghanzi economic activity based (South Africa, 2004) Distribution of Economic Activity, Based on GVA (2004), SOUTH AFRICA Z I M B A B W E Serowe Musina B O T S W A N A Thohoyandou Main Roads our future through sience N A M I B I A Tshabong Mafikeng Polokwane Tzaneen Phalaborwa Thabazimbi Gabarone M O Z A M B I Q U E Xai-Xai Rustenburg Pretoria Nelspruit Middelburg Mafikeng Witbank Johannesburg Klerksdorp Mbabane SWAZILAND Maputo Kroonstad Saldanha Springbok Cape Town N Kilometer s Upington Sishen Beaufort West George De Aar Kimberley Middelburg Uitenhage Welkom Bloemfontein Port Elizabeth Map prepared by CSIR Built Environment for NSDP 2006 (Presidency, South Africa) and RIDS (dti), May 2006 Aliwal North Phuthaditjhaba Ladysmith Maseru LESOTHO Umtata East London Newcastle Pietermaritzburg Durban TOTAL GVA 2004 Source: REX version 2.0c (190) Economic Focus: 2004 GVA-current prices, based on SA Mesoframe Richards Bay 2 Total GVA per 50km (Rand) 0-5 mil 5-10 mil mil mil mil mil mil mil mil mil mil mil mil mil bn 1 bn bn 1.3 bn - 1.6bn 1.6 bn bn 2.2 bn - 3 bn 3 bn - 4 bn 4 bn - 6 bn 6 bn - 9 bn 9 bn - 30 bn

3 PROBLEM STATEMENT Sharpest regional disparities at present are between the three main metropolitan complexes and the rest of the country Three broad categories of regions are considered, these will be applied in determining potential impact scenarios for the RIDS: i. 52 Districts and Metros, in the nine provinces ii. main services hubs of a wider functional region or macroregion, in regions where potential and latent potential exists. iii. main production complexes of a cluster or corridor of interrelated industries

4 STRATEGIC INTENT OF RIDS TO ENABLE ALL AREAS IN OUR SA ECONOMY TO ATTAIN THEIR OPTIMAL ECONOMIC POTENTIAL; BY FACILITATING LOCAL DEVELOPMENT EMBEDDED IN A REGION/DISTRICT THROUGH LINKAGES WITHIN EXSTING AND LATENT INDUSTRIAL AND ECONOMIC BASE

5 STRATEGIC INTENT To stimulate investments that will promote sustained high growth in a local community To focus on a region s potential and identify what local stakeholders can and need to do to ensure their local community reaches its potential To assess a community s comparative advantage, identify new or existing market opportunities for businesses, and reduce obstacles to business expansion and creation To have an impact on the economic viability districts To create new jobs, help communities retain existing jobs, help businesses access capital To contribute to a broader national framework with a spatial dimension, in order to increase each region s global competitiveness.

6 UNEMPLOYMENT TRENDS Source:Labour Force survey, September 2005 PROVINCIAL UNEMPLOYMENT RATE ( ) Western Cape Eastern Cape Northern Cape Free State KwaZulu-Natal North West Gauteng Mpumalanga Limpopo PROVINCE PERCENTAGE

7 GROWTH DISPARITIES (%GDP) 40.00% 35.00% 30.00% 25.00% 20.00% 15.00% % 5.00% 0.00% WC % GGP EC % GGP NC % GGP FS % GGP KZN % GGP NW % GGP GP % GGP Mpumalanga % GGP Limpopo % GGP

8 The dti s APPROACH TO LED To bring together resources from within and outside the Community to address: local governments challenges on land management practices, outdated infrastructure, limited business planning and management skills, poor access to markets and market knowledge, and to promote economic growth in a systematic and organized manner at the local level To become a catalyst for promoting LED as a key ingredient to achieving broad-based and equitable economic growth by assisting: the local community to research its own economic strengths, agree upon a common strategy (Regional Industrial Road Map) and organize itself to implement the strategy (Indicative Industrial Business Plan).

9 LED INTERVENTION PROPOSITION The dti, in conjunction with the dplg and the presidency will assist district municipalities to, formulate their industrial road maps, form local growth coalitions, build local capacity and, finalise local growth business plans Each region s respective plan can serve as a national development trajectory; promoted to guide all sector departments interventions in that region. Bringing local stakeholders around one table in a form of a PPP helps to build trust, encourages innovation, fosters social cohesion, and thus decreases the risk of further conflict.

10 Growth in GGVA at Constant 2000 Prices (2000 to 2004) 12% 10% Average Annual % Change 8% 6% 4% 2% 0% -2% -4% Western Cape Eastern Cape Northern Cape Free State Kwazulu Natal Gauteng North West Mpumalanga Limpopo -6% -8%

11

12 RIDS s THREE INTERLINKED GOALS GOALS BUILD PARTNERSHIPS SUPPORT MEASURES FORMATION OF PRIVATE-PUBLIC PARTNERSHIPS DEVELOPMENT OF REGIONAL INDUSTRIAL ROAD MAPS ADDRESS ECONOMIC DECLINE DEVELOPMENT OF INDICATIVE BUSINESS PLANS BUSINESS RETENTION AND EXPANSION PROGRAMME ISRDP & URP (Project Consolidate) MUNICIPAL ECONOMIC ANALYSIS CAPACITY BUILDING FACILITY SMALL TOWNS REGENERATION BUILD REGIONAL AGGLOMERATIONS REGIONAL INDUSTRIAL DEVELOPMENT FUND REGIONAL INDUSTRIAL DEVELOPMENT BILL INDUSTRIAL CLUSTERING CAPACITY BUILDING FUND SPECIAL ECONOMIC ZONES

13 INVESTMENT PROMOTION Trade and Investment South Africa Division (TISA) Promotes investment in the following sectors: Agro-processing Automotive Aquaculture BPO Capital Equipment Chemicals Cultural Industries Tourism Mining & mineral beneficiation Hand-holds the investor (domestic and international) to ease the investment decision-making process Match-make the investor with stakeholders within areas of potential, where opportunities can be optimally exploited in the interest of all stakeholders involved Role of the RIDS Work closely with districts in ensuring some level of readiness/preparedness so that when a viable investment opportunity arises, that investment takes place on the district s terms

14 THANK YOU!

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