Market Intelligence Report highlights Cape Town’s economic successes and investment & export hub appeal
29 June 2020
Invest Cape Town released the 2019/2020 Regional Market Analysis Intelligence Report in partnership with Wesgro. It ranked Cape Town as the leading BPO sector in the country, a marine manufacturing hub and prime tourism destination. Read more below:
‘Having long been recognised as one of the top tourist destinations in the world with titles like, ‘world’s friendliest city’ and ‘world’s leading festival and events capital,’ we are proud that in recent years we have been receiving recognition for the hard work we have put in to make Cape Town the most attractive city for investment on the African continent. Despite these achievements, we cannot ignore the prevailing circumstances and all our efforts must be geared towards addressing and overcoming this pandemic.
‘With our focus now on fighting the COVID-19 global pandemic, and the impact that this will have on economies around the world, we will need to find new and innovative ways to celebrate the natural beauty of our city and support the hard work of our local tourism and business sectors for earning us titles such as Africa’s leading digital city, and annually being recognised as a top global city by various organisations and publications,’ said Executive Mayor Dan Plato.
Between January 2003 and December 2018, a total of 344 foreign direct investment projects, mainly from the United Kingdom, United States, Germany and China were made into Cape Town, totalling R110 billion, which is an average investment of R319.4 million per project. An estimated 24 446 jobs were created during this period. South Africa was placed as the 39th largest global destination market for foreign-direct investment out of 109 countries.
The report noted that Cape Town accounts for approximately 72% of the Western Cape’s economy and houses most of the large, energy intensive industrial areas.
Cape Town accounted for nearly two thirds (65%) of the Western Cape’s exports in 2018, with annual rand value growth of 10% between 2008 and 2018. In 2018, Cape Town accounted for 79% of the Western Cape’s imports.
A total of R84 billion in regional exports in 2018 were recorded, with the largest share allocated to the African continent, Europe and Asia, respectively.
The largest products to be exported in 2018 were refined petroleum, followed by citrus fruit and apples, pears and quinces, totalling a combined R24 billion.
More than a third of all exports from Cape Town are from the agriculture and fishing sector.
The biggest economic sector, by value, in Cape Town in 2018 was the finance and business services sector, contributing R100,7 billion, while community services contributed R48 billion (17%), and trade contributed R45,7 billion (16%).
As a globally competitive city, Cape Town offers a suite of incentives for new investment and the expansion of existing investment in its key industries and spatial nodes.
Business Process Outsourcing (BPO)/contact centres as a key sector for job creation for unemployed South African youth.
The majority of the Western Cape BPO sector is based in Cape Town, with companies such as Amazon, DigiSource and Capita, among others, basing local operations in the city and employing thousands of residents.
The report noted that the food and beverage sector in Cape Town is an established hub worth R11 billion, with some of the country’s largest companies located here, making it one of the largest local manufacturing industries.
It added that the sector is ideally situated, with close proximity to agriculture items (including grapes, deciduous fruits and ostriches). Factors such as an international port, a growing consumer population and a relatively strong skills base, made it a very competitive location in which to base food and beverage manufacturing operations.
Cape Town identified as an ideal location for Green technologies
Cape Town has positioned itself as the focal point for Green Technology in South Africa, with the designation of the Atlantis Special Economic Zone (ASEZ). Renewable Energy companies have their headquarters in Cape Town across the economic clusters of solar manufacturing, wind turbine-related, electrical manufacturing, fuel supply, professional services and supporting bodies. Foreign direct investment in the renewable energy sector amounted to R5 billion between 2008 and 2017, comprising of 18 new projects. IBC Solar, AEG Power Solutions, and Siemens are among the major companies with local headquarters.
The Western Cape is the largest marine manufacturing centre in the country, creating over R2,3 billion in 2018 in export revenue and more than 4 500 direct jobs and 7 000 indirect jobs.
‘The COVID-19 pandemic has had a significant impact on the global economy, as well as locally. A protracted period of recovery lies ahead and to ensure the various sectors experience a full recovery, the City’s Economic Action Plan has highlighted a number of interventions in response to the crisis. We supported the BPO sector through assisting staff to work from home, lobbied national government to amend the restrictive regulations around e-commerce to protect livelihoods, helped companies repurpose manufacturing towards the manufacture of Personal Protective Equipment. We have further offered relief measures to reduce rates and distributed nearly 3 000 COVID-19 toolkits to SMMEs to help business get back to business safely,’ said Mayoral Committee Member for Economic Opportunities and Asset Management, Alderman James Vos.
‘With the resilience and commitment our residents have already demonstrated, I am confident we can make it through these difficult times. We look forward to again working with our very capable partners, including Wesgro, Cape Town Tourism and Cape Town International Airport who work with the City’s Economic Opportunities and Asset Management Directorate through Invest Cape Town. This city works because we work together,’ said Mayor Plato.