oceans economy - nelson mandela university

1ESTABLISHING A SUSTAINABLE OCEANS ECONOMY IN THE EASTERN CAPE

THE EASTERN CAPE OCEANS ECONOMY STRATEGIC ROADMAP

A STATUS QUO AND BASELINE ASSESSMENT

OCEANS ECONOMY

in the Eastern Cape and South Africa

2 ESTABLISHING A SUSTAINABLE OCEANS ECONOMY IN THE EASTERN CAPE




Globally and nationally the Oceans Economy is taking on increasing importance in the policy and economic realm.



1 EXECUTIVE SUMMARY 11

2 AN OVERVIEW OF THE REPORT FINDINGS 122.1 ADefinitionoftheOceanEconomy 122.2 TheSANationalOceanEconomy–OperationPhakisain2014 122.3 TheSANationalOceanEconomy–Restatedat2018 142.4 TheEasternCapeOceanEconomy 172.5 ProjectsIdentifiedfortheEasternCapeOceanEconomy 202.6 EconomicImpactAssessmentofPriorityProjects 232.7 ConcludingStatementandNextSteps 24

3 STRUCTURE OF THIS REPORT 25

4 DEFININGTHEOCEANECONOMY 284.1 TheOceanEconomyGlobally 284.2 OperationPhakisainSouthAfrica 29

4.2.1 A Summary of its Current State – Operation Phakisa 324.2.2 Operation Phakisa: DEA Progress Report – May 2019 34

5 ECONOMICCONTEXTOFTHEOCEANSECONOMY 375.1 TheSouthAfricanOceanEconomy 375.2 TheOceanEconomyintheContextoftheSouthAfricanEconomy. 38

5.2.1 The South African Economy - Growth and Employment 385.2.2 Economic and Employment Growth – Manufacturing Sectors - SA 395.2.3 The South African Ocean Economy in Context & Looking Forward 41

5.3 TheOceanEconomyintheContextoftheEasternCapeEconomy. 475.3.1 The Eastern Cape Economy 475.3.2 Economic and Employment Growth – Manufacturing Sectors 495.3.3 The Eastern Cape Ocean Economy in Context & Looking Forward 51

5.4 TheOceanEconomyLookingForward 57

6 OPERATIONPHAKISA–EASTERNCAPEPROJECTSANDPOTENTIAL 586.1 SouthAfrica’sOceanDomain 586.2 MarineTransport&Manufacturing(MTM) 59

6.2.1 The Current Status of the OP Sector - MTM 596.2.2 Projects and Initiatives of Relevance to the Eastern Cape 596.2.3 High Level Economic Impact Assessment 616.2.4 Synthesis and Next Steps 61

6.3 OffshoreOilandGas(OOG) 626.3.1 TheCurrentStatusoftheOffshoreOilandGasSector-OOG 626.3.2 Projects, Initiatives and Opportunities of Relevance to the Eastern Cape 626.3.3 High Level Economic Impact Assessment 646.3.4 Synthesis and Next Steps 64

CONTENTSOCEANS ECONOMY STATUS QUO

AND BASELINE ASSESSMENT



6.4 Aquaculture 656.4.1 The Current Status of the OP Sector - Aquaculture 656.4.2 Projects, Initiatives and Opportunities of Relevance to the Eastern Cape 656.4.3 High Level Economic Impact Assessment 666.4.4 Synthesis and Next Steps 67

6.5 MarineProtectionServices&OceanGovernance(MP&OG) 676.5.1 The Current Status of the MP & OG Sector 676.5.2 Projects and Initiatives of Relevance to the Eastern Cape 686.5.3 High Level Economic Impact Assessment 696.5.4 Synthesis and Next Steps 69

6.6 SmallHarbourDevelopment 706.6.1 The Current Status of the OP Sector – Small Harbours 706.6.2 Projects and Initiatives of Relevance to the Eastern Cape 716.6.3 Opportunities for Eastern Cape:- 726.6.4 High Level Economic Impact Assessment 736.6.5 Synthesis and Next Steps 74

6.7 Coastal&MarineTourism 746.7.1 The Current Status of the OP Sector – Coastal and Marine Tourism 766.7.2 Projects and Initiatives of Relevance to the Eastern Cape 786.7.3 High Level Economic Impact Assessment 796.7.4 Synthesis and Next Steps 79

6.8 SkillsandCapacityBuilding 806.8.1 The Current Status of the OP Sector – Skills Development & Capacity Building 806.8.2 Projects and Initiatives of Relevance to the Eastern Cape 816.8.3 High Level Economic Impact Assessment 826.8.4 Synthesis and Next Steps 82

6.9 Research,TechnologyandInnovation(RTI) 836.9.1 The Current Status of the OP Sector – RTI 836.9.2 Projects, Initiatives and Opportunities of Relevance to the Eastern Cape 836.9.3 Projects and Initiatives of Relevance to the Eastern Cape 846.9.4 High Level Economic Impact Assessment 846.9.5 Synthesis and Next Steps 85

6.10 SummaryofEasternCapeOceanEconomyBaselineProjects 86

7 PORTS&TRANSNETASANECONOMICROLE-PLAYER 897.1 TransnetandFreightLogisticsinSouthAfrica 897.2 TransnetPortDevelopmentFrameworkPlans(PDFP) 927.3 The2017PortDevelopmentFrameworkPlan(PDFP) 947.4 TransnetandFreightLogisticsintheEasternCape 957.5 EasternCapePortsandOperationPhakisa 99



8 A‘PROJECTBOOK’OFPRIMEECOEPROJECTS 1008.1 The‘BidBook’StructureandContentAdoptedforTop-Ten’ECOEProjects 100

8.1.1 Bid Book – Bayworld Oceanarium & Museum Complex 1028.1.2 Bid Book – Gas-To- Power Project for Coega SEZ 1058.1.3 Bid Book – Tilapia Aquaculture 1078.1.4 BidBook–FreshwaterCatfish(Barble)–KarooCatch 1098.1.5 N2WildCoastBiodiversityOffsetProject 1118.1.6 Mkambati Community Project Nature Reserve 1138.1.7 Coastal Infrastructure Development on Selected Beaches 1148.1.8 N2WildCoastTollRoad(N2WCR) 115

9 CONCLUSIONSANDRECOMMENDATIONS 117

10 REFERENCES 118

11 STAKEHOLDERENGAGEMENT 12011.1 EasternCapeOceanEconomyStakeholdersforInterviews 12011.2 StakeholderLetterofEngagementandStructuredMeetingAgenda 122

12 APPENDIX 12712.1 TheBriefandClientRequirement 127

12.1.1 The Approach and Assessment Methodology Proposed 12912.1.2 Methodology Adopted to Address the Brief 130

12.2 DefiningtheOceanEconomy 13112.2.1 OECD – Ocean Economy - 2016 13112.2.2 Social Licence to Operate and the Blue Economy 13312.2.3 The Blue Economy in Australia - 2017 13612.2.4 Practical Manifestations of the Blue Economy for Sustainability 13812.2.5 MaritimeSectorSkillsDevelopmentStudy-SAMSA(2011) 139

12.3 OceanEconomyForecastforSA–AssumptionsUsed 14112.3.1 OECD’s Forecast Methodology & Metrics 14112.3.2 Stephen Hosking’s Forecast Methodology & Metrics - 2014 14512.3.3 Stephen Hosking’s Forecast Methodology & Metrics - 2017 15012.3.4 Current Study GDP Forecast Methodology & Metrics 156

12.4 SAIMI-SAMaritimeRoadmap-2017 16012.5 SAIMIOverview-Research&TechnologyinSAMaritimeSector-2017 16312.6 SAIMISkillsDevelopmentProjectsbeingImplemented 167

12.6.1SkillsDevelopment–Ocean&MaritimeSectorInitiatives 16712.7 HigherEducationInstitutionsforInnovationintheEasternCape 174



13 ANECONOMICOVERVIEWTOPROVIDECONTEXT 17613.1 AnEconomicOverviewofSA,EC,SBDM,OTRDMtheNMBandBCMM 176

13.1.1 Introduction 17613.1.2 Population 17913.1.3 Household Number and Size 17713.1.4 Education Levels 17813.1.5 Household Income and Expenditure 17913.1.6 Access to Basic Services 18213.1.7 Dwelling Type 18313.1.8 Employment 18413.1.9EconomicProfile 18513.1.10 Synthesis 191

13.2 RegionalOutputandGVA(Constant2010Prices)PerIndustry–SA&EC 19213.3 RegionalOutputandGVA(Constant2010Prices)-ManufacturingIndustry–SA&EC 19313.4 RegionalEmploymentPerIndustry–SA&EC 19413.5 RegionalEmploymentPerManufacturingIndustry–SA&EC 195



TABLESOCEANS ECONOMY STATUS QUO

AND BASELINE ASSESSMENT

Table1: EasternCapeOceanEconomySectorPotentialOverTwentyYears 11Table2: OperationPhakisa-InitialTargetsin2014 13Table3: OperationPhakisa:-EconomicGrowthandJobCreation-DEA. 13Table4: SAOceanEconomyGDPForecast–TwentyYears 14Table5: SAOceanEconomyEmploymentForecast–TwentyYears 15Table6: EasternCapeOceanEconomyGDPForecast–TwentyYears 17Table7: EasternCapeOceanEconomyEmploymentForecast–TwentyYears 18Table8: PriorityProjectsIdentifiedfortheEasternCapeOceanEconomy 21Table9: EconomicImpactAssessmentalongtheValueChain-Construction 23Table10: EconomicImpactAssessmentalongtheValueChain-Operations 24Table11: ProjectedGrowthandJobCreationwithintheMaritimeSector 31Table12: OperationPhakisa:-Long-TermGoals–DEAMay2019. 34Table13: OperationPhakisa:-Medium-TermGoals–DEAMay2019. 34Table14: OperationPhakisa:-EconomicGrowthandJobCreation-DEA. 35Table15: OperationPhakisaUpdate–May2019.InvestmentandJobCreation 36Table16: SAMajorEconomicSectors-GrossValueAddedandEmployment 38Table17: SAManufacturingEconomicSectors-GrossValueAddedandEmployment 39Table18: SouthAfricanGDPPastProfile–InformingForecastRatePerAnnum 41Table19: OceanEconomyintheContextoftheSAMajorEconomicSectors-GDP 42Table20: SAOceanEconomy–GDPfortheStandardIndustrialClassification(SIC) 43Table21: SouthAfricanOceanEconomy–GDP–OperationPhakisaSectors 44Table22: OceanEconomyintheContextoftheSAMajorEconomicSectors-Jobs 45Table23: SAOceanEconomy–Employment-StandardIndustrialClassification(SIC) 46Table24: EasternCapeMajorEconomicSectors-GrossValueAddedandEmployment 47Table25: ECManufacturingEconomicSectors-GrossValueAddedandEmployment 49Table26: EasternCapeGDPPastProfile–InformingForecastRatePerAnnum 51Table27: OceanEconomyintheContextoftheECMajorEconomicSectors-GDP 52Table28: EasternCapeOceanEconomy–GDPfortheSIC 53Table29: EasternCapeOceanEconomy–GDP–OperationPhakisaSectors 54Table30: OceanEconomyintheContextoftheECMajorEconomicSectors-Jobs 55Table31: EasternCapeOceanEconomy–EmploymentfortheSIC 56Table32: EasternCapeOceanEconomy–Employment–OperationPhakisaSectors 57Table33: OceanSector:MarineTransportandManufacturing 60Table34: EconomicImpactAssessment-MarineTransportandManufacturing 61Table35: OceanSector:OffshoreOilandGas 63Table36: EconomicImpactAssessment–OffshoreOilandGas 64Table37: OceanSector:Aquaculture 65Table38: EconomicImpactAssessment–Aquaculture 65Table39: OceanSector:MarineProtectionandOceanGovernance 68Table40: EconomicImpactAssessment–MarineProtection&OceanGovernance 69



Table41: OceanSector:SmallHarbourDevelopment 73Table42: EconomicImpactAssessment–SmallHarbourDevelopment 73Table43: OceanSector:CoastalandMarineTourism 78Table44: EconomicImpactAssessment–CoastalandMarineTourism 79Table45: OceanSector:SkillsDevelopmentandCapacityBuilding 81Table46: EconomicImpactAssessment–SkillsDevelopment&CapacityBuilding 82Table47: OceanSector:Research,TechnologyandInnovation 84Table48: EconomicImpactAssessment–Research,Technology&Innovation 84Table49: PriorityProjectsIdentifiedfortheEasternCapeOceanEconomy 86Table50: PortBasedActivitiesIdentifiedfortheEasternCapeOceanEconomy 93Table51: EasternCapePortsInfrastructureandCapacity 96Table52: EasternCapePortsCargoVolumesandCapacity 100Table53: BidBook-OceanEconomyProjectDescription&KeyMetrics 102Table54: BidBook–BayworldProjectDescription-NMB 105Table55: BidBook–Gas-To-PowerProjectDescription 107Table56: BidBook–MarineTilapiaAquaculture 109Table57: BidBook–FreshwaterCatfish–KarooCatch 111Table58: ProposedScopeofWork&DeliverablesfortheEasternCapeOceanEconomy 127Table59: EstablishedandEmergingOceanBasedIndustries–OECD2016 133Table60: SectorsThatContributetotheOceanEconomy(Adapted:Economist,2015) 135Table61: PracticalManifestationsoftheBlueEconomyforSustainability 138Table62: SAMSA/DeloitteEmploymentEstimatefortheSAMarineEconomy 140Table63: OverviewofEstimatesofIndustry-specificgrowthratesinGVA&Employment 142Table64: OECDGlobalOceanEconomyEmploymentEstimates 144Table65: OECDGlobalOceanEconomyGVAEstimates 144Table66: EstimatedValueAddbyPrimary&SecondaryOceanSectorsin2010-Hosking 146Table67: EstimatedValueAddedbyTertiaryOceanSectorsin2010-Hosking 148Table68: EstimatedValueAddbyPrimary&SecondaryOceanSectorsin2015-Hosking 151Table69: EstimatedValueAddedbyTertiaryOceanSectorsin2015-Hosking 153Table70: AnAnalysisoftheOceansub-sectorGDPContributionin2015-Hosking 154Table71: SouthAfricanGDPPastProfile–InformingForecastRatePerAnnum 157Table72: SouthAfricanJobsPastProfile–InformingForecastRatePerAnnum 158Table73: EasternCapeGDPPastProfile–InformingForecastRatePerAnnum 158Table74: EasternCapeJobsPastProfile–InformingForecastRatePerAnnum 159Table75: SnapshotofOpportunitiesinMaritimeSector–SAIMIRoadmap2017 162Table76: FADIAlternativeLivelihoodsProject 167Table77: SEASISkillsTrainingintheSquidIndustry 169Table78: TETASmallBusinessSupport 171Table79: CMBTArtisanTraining 172Table80: MentorshipTraining 173Table81: OverviewofPopulationStructurein2018 177Table82: OverviewofHousehold’sStructurein2018 178Table83: LevelofEducationAttainmentinSelectedAreasin2018 179Table84: WeightedAverageAnnualHouseholdIncomein2018Prices 186Table85: AccesstoMinimumBasicServicesin2018 189Table86: AccesstoHousingbyDwellingTypein2018 190Table87: LabourForceProfileforSelectedAreasin2018 192Table88: GrossValueAdded(GVA)andRealGDP(2010Prices)in2018 193Table89: PercentageShareofTotalGVAperEconomicSectorin2018 194Table90: PercentageShareofTotalFormalEmploymentperEconomicSectorin2018 195



1 EXECUTIVE SUMMARYGloballyandnationallytheOceanEconomyistakingonincreasingimportanceinthepolicyandeconomicrealmaslandbasedresourcesreachtheirextractiveplateau,andtheoceanisrecognisedasaresource.Thisresource,ifresponsiblymanaged,couldprovideasustainableanswertomanyofthepressingissuesfacinghumankindatpresent.

ThisbaselinestudyestablishesthepotentialoftheOceanEconomyinSouthAfricaatanationallevel,andinapro-vincialcontextfortheEasternCape,usingtheDepartmentofEnvironmentalAffairs(DEA)2014OperationPhakisafortheOceanEconomyasthebaselineframeworkandpointofreference.Adetailedanalysishasbeenundertakenofthenationalandprovincialeconomictrends,andthereafteratwenty-yeareconomicforecasthasbeenpreparedwhichsimulatestheOceanEconomyanditsvarioussubsectorsinthecontextofstandardindustrialclassifications(SIC)foralleconomicsectors.

ThepurposeoftheEasternCapeOceanEconomyBaselineistoaccuratelyformulatethecurrentsituationandunder-standthesectordynamics,takestockofthecurrentandfutureoceaneconomyopportunitieswithinaregionalcontext,andbeabletoformulateacogent‘RoadMap’forthewayforwardlinkedtoademonstrablestrategy.ThisrequiredanindepthanalysisoftheworkundertakenbytheOperationPhakisaLaboratories,extensiveengagementwithnationalandregionalstakeholders,publicandprivateentitiesaswellasacademia,andthecompilationofabaselineofimplementableoceanbasedprojects.

Theprocessundertakenintheformulationofthisbaselineisdetailedinthisreportanditsappendix,withahighlevellistingofalloftheprojectsconsideredhereafter.Certainofthesearedescribedinmoredetailinthereport.Asuccinctsummaryofthesefifty-nineprojectsandtheirestablishmentvalues,contributiontoGrossDomesticProductandpoten-tialtocreateemploymentopportunitiesisoutlinedinthefollowingtable:-

Table 1: Eastern Cape Ocean Economy Sector Potential Over Twenty Years

Eastern Cape Oceans Economy Total Year 20 Year 20 Year 20Priority Projects Per Sector CAPEX Rm GDP - Rm Jobs / FTE Projects

New EC Ocean Projects - Totals 57,204 19,726 42,152 59 1. M arine Trans port & M anufac turing 1,587 588 648 8 2. O ffs hore O il & G as 40,670 10,269 3,600 8 3. A quac ulture 1,687 5,378 30,344 9 4. M arine P rotec t ion & G overnanc e 103 120 114 4 5. S m all Harbour Developm ent 2,602 1,203 1,161 12 6. Coas tal & M arine Touris m 10,505 2,085 6,065 9 7. S k ills Developm ent 28 61 194 7 8. Res earc h & Innovat ion 22 22 22 1 9. O ther O c ean E c onom y 1 1 2 1

Source: NM U E as tern Cape O c ean E c onom y A s s es s m ent.



Byyeartwentyin2038thisrepresents140%oftheanticipatedEasternCape’soceaneconomyGDP,and69%oftheemploymentopportunities.Thispreliminaryanalysisindicatesthatmorelabourintensiveprojectsneedtobepursued,possiblyattheexpenseofthecapitalintensiveprojects included.

FollowingonfromthisbaselinestudyisaseriesofstakeholderengagementsessionstoshowcasethepreliminaryfindingsandstartpreparingtheimplementationplanintheformofaRoadMapandstrategy,tobepresentedataninvestor’sconferenceinSeptember2019.

2 AN OVERVIEW OF THE REPORT FINDINGSThischapterprovidesahighleveloverviewandsummarisescertainofthedataandeconomicmodellingwhichisundertakeninmoredetailinchapter5hereafter.Althoughthisresultsinacertainamountofduplication,theintentionisforthischaptertogetherwiththeExecutiveSummarytoformastand-alonereportwhichcontainsasynopsisofthereport’sfindings.

Theworlddependsontheoceanfortrade,transport,energy,food,tourism,recreationandmanyothergoodsandservices.Atthesametime,theoceanfacesmultiplechallengesduetoincreasingpressurefromhumanimpactandunsustainablepractices.TheOceanEconomyinSouthAfricaandtheEasternCapehasbecomeaprioritysectorduetoitspotentialtostimulateeconomicgrowthandaddressthetriplechallengesofinequality,povertyandunemployment.

Thisreportanalysesthepotentialoftheoceaneconomyin South Africa at a national level and then in a provincial contextfortheEasternCape,usingtheDepartmentofEnvironmentalAffairs(DEA)2014OperationPhakisafortheOceanEconomyasthebaselineframeworkandpointofreference.

2.1 A DEFINITION OF THE OCEAN ECONOMY

For the purposes of this study the following definition of the Ocean Economy is used:

‘theoceansector(economy)isonethatincludesalleconomicactivitiescloselylinkedtotheoceanresourcesandenvironmentand/ordependenttosomemeaningfuldegreeontheocean’(Hosking,2017)[Ourboldanditalichighlights]

ThisdefinitionhasbeenacceptedinthecompilationofthisreportasthemostappropriateforSouthAfrica,anditisalsodeemedtobesuitablefortheEasternCapeOceanEconomy.

2.2 THE SOUTH AFRICAN OCEAN ECONOMY - OPERATION PHAKISA IN 2014

OperationPhakisaisaprojectdevelopedbytheSouthAfricanGovernmentin2014withthepotentialtoachieve“Big,FastResults”,withtheaimofaddressingthe“triplethreat”facedbySouthAfricaintheformofinequality,povertyandunemployment.Thisprojectfirsthighlightedfourinitialdevelopmentsectors(marinetransportandmanufacturing[MTM],oilandgas[O&G],aquaculture,andmarineprotectionandgovernance[MPG]),whichwerelaterexpandedtosixsectors(Walker,2018.QuotingtheDepartmentofEnvironmentalAffairs).

These sectors were:

1 Marinetransportandmanufacturing,2 Offshoreoilandgasexploration,3 Aquaculture,4 Marineprotectionservicesandoceangovernance,5 Smallharbourdevelopment,and6 Coastalandmarinetourism.

Inadditiontotheabovementionedsectors,twomorecross-cuttingsectorswereidentifiedas“enablingareas”.Thesewere:7 Skillsandcapacitybuilding,and8 Research,technologyandinnovation.



Aseriesofengagementsessionsor‘Laboratories’wereheldbetweenmorethansixtyprivatesectorandstateentities,andover600expertsandindividualswithbespokeknowledgeintheOceanEconomyinordertodraftanoverviewofthecurrentstatus,andidentifiedfuturepotentialofthesectoroveratwenty-yeartimeframe.Thisrequiredthatthesixsectorsidentifiedabovebecomprehensivelyconceptualisedforthepurposesofthelaboratories,withthepotentialoftheOceanEconomybeingexpressedoveratwenty-threeyeartimeframeforbothGrossDomesticProduct(GDP)andemploymentcreationoveraslightlydifferenteighteconomicactivitiesasexpressedinthetablebelow:

Table 2: Operation Phakisa - Initial Targets in 2014

TheOperationPhakisainitiativeisseentofocusonunlockingthepotentialofSouthAfrica’soceanvaluedatatotaloceansectorseconomiccontributioninGDPofR129toR177billion,andapproximatelyonemillionjobsby2033(DEDEAT,2014b;DEA,OperationPhakisa,2014).

Theoceaneconomyhascontributedthefollowingintermsofeconomicgrowthandjobcreationintheperiodbetween2010and2015:

Table 3: Operation Phakisa:- Economic Growth and Job Creation - DEA.

2010 2014 2015

Jobs 316000 413356 425 525

Economicgrowth(GDPcontribution)

4.4%ofGDP(R110billion)



Source:DepartmentofEnvironmentalAffairs(DEA).2019

Thetableaboveprovidesarepresentationoftheeconomicgrowthandjobcreationresultingfromtheoceaneconomyupto2015.

Operation PhakisaOcean Sectors Considered 2010 2033 2010 2033

M arine Trans port & M anufac turing 16 42 - 61 15 40 - 56Touris m 15 25 - 35 90 150 - 225O ffs hore O il & G as 4 11 - 17 0.4 0.8 - 1.2Cons truc t ion 8 20 - 21 162 390 - 407Renewable energy 0 14 - 17 0 0.9 - 1.1F is heries & aquac ulture 7 10 - 16 30 170 - 250Com m unic at ion 4 7 - 10 19 32 - 52Des alinat ion 0 0.1 - 0.1 0 1.6 - 1.6

Total 54 129 - 177 316 788 - 1004Source: D e p a rtm e n t o f E n viro n m e n ta l Affa irs , 2 0 1 4 .

GDP Growth (R'bn) Job Creation ('000)



2.3 THE SOUTH AFRICAN OCEAN ECONOMY – RESTATED AT 2018

During2013,academicStephenHoskingundertookareviewoftheOceanEconomyinSouthAfricawhichresultedinbothadefinitionoftheOceanEconomyandapreliminaryestimateofthecontributiontoGrossDomesticProduct(GDP)fortheOceanEconomybasedto2010.During2017,HoskingundertookafurtherandsimilarstudywhichupdatedhisOceanEconomydefinitiontotakecognisanceofchangedeconomiccircumstances,andrestatedtheOceanEconomyGDPwithreferencetothethenmorecurrent2015data.Thisbaselinedataandtheeconomicmetricshavebeenusedinconjunctionwithatwenty-yearSouthAfricanforecastforthemajoreconomicsectorsinSouthAfrica,basedupontheinternationallyrecognisedStandardIndustrialClassification(SIC)codesasusedbytheDepartmentofTradeandIndustryinSouthAfrica.ThishasprovidedananalysisoftheOperationPhakisaprojectionsinthecontextofthecurrentSouthAfricaneconomy,togetherwitharealisticprojectionofitsfuturetrajectory.Themethodologyandescalationfactorsusedpereconomicsectorareprovidedinappendix12.3hereafter.

ThisforecastandanalysisintermsoftheoriginalOperationPhakisaframeworkhasresultedinthefollowingtwentyyearportrayaloftheOceanEconomyinSouthAfrica:

Table 4: SA Ocean Economy GDP Forecast – Twenty Years

National GDP - Direct Year 0 Year 6 Year 10 Year 15 Year 20Sectors for Ocean Economy:- 2018 2024 2028 2033 2038

Total Economy GDP - Rand Million 2,859,599 3,181,255 3,463,015 3,807,275 4,367,467

1 M arine Trans port and M anufac turing 16,625 18,557 20,299 22,351 25,867 - M arine Trans port 8,802 9,961 10,995 12,258 14,559 - M arine M anufac turing 7,823 8,596 9,305 10,093 11,308

2 Touris m 11,683 12,837 13,895 15,117 17,524 3 O ffs hore O il & G as 4,660 4,811 4,947 5,097 5,424 4 Cons truc t ion 10,767 12,184 13,449 14,995 17,809 5 Renewable E nergy 164 2,920 5,175 10,180 15,187 6 F is heries and A quac ulture 3,708 4,327 4,805 5,465 6,244 7 Com m unic at ion 3,917 4,433 4,893 5,456 6,480 8 Des alinat ion 500 7,000 10,000 13,000 16,000 9 O ther 'O c ean E c onom y ' 4,000 6,500 10,000 20,000 30,000

Operation Phakisa - Direct GDP: 56,023 73,570 87,464 111,661 140,534 Operation Phakisa - Indirect & Other: 71,761 71,213 72,244 66,666 67,437 Ocean Economy - Total GDP (SIC): 127,784 144,783 159,708 178,326 207,971 - % of Total G DP in S A : 4.5% 4.6% 4.6% 4.7% 4.8%

Source: Derek Zim m erm an, bas ed upon DE A O perat ion P hak is a, Q uantec Data, 2019, & S tephen Hos k ing defin it ion of the 'O c ean E c onom y ', 2017.



The following observations based upon the table are worthy of noting:

• ItisimportanttonotethatOperationPhakisaonlyinvestigatedthenascentoceaneconomysectors,orthosethatwerenotyetfullydevelopedandhadsignificantdevelopmentpotential,

• Thecurrentreport’s2018estimateforthetotalOceanEconomyGDPatR127.78billionversustheHoskingestimateofR128.48billionfortheyear2015,

• Thecurrentreport’sdirectOceanEconomyestimatefor2018,basedupontheHoskingmethodologyofR56.02billionfortheyear2018,withadifferentialofR71.76billion,

• ThedifferentialofR71.76billionhasbeeninvestigatedandconsideredinthecontextofthebrieffortheOperationPhakisalaboratories,andhasbeenascribedto‘indirectandinducedGDPandOtherFactors’.These‘IndirectandOther’factorsareconsideredtobebothOceanEconomysectorandsub-sectorswhichwerenotconsideredinsufficientdetail,andtheeconomiceffectsofindirectandinducedimpactalongthevaluechainwhichwerenotconsideredindetail.

• Withthese‘indirectandother’affectstakenintoconsiderationasperthecurrentmodelabove,allthreemodellingscenariosofOperationPhakisa,Hoskingandthecurrentreportcomeintoalignmentinasatisfactorymanner.

• UponreachingyeartwentyofthecurrentOceanEconomyforecast,fortheyear2038thetotalOceanEconomyGDPisforecasttobeR208billion,versustheOperationPhakisaforecastofR129to177billion.ThisisapositivevarianceofR31billion,or17.5percent.

• ThecurrentforecastfortheOceanEconomyindicatesthatitwouldcompriseof4.8%ofthetotalSouthAfricaneconomyin2018,whichissubstantiallysimilartotheratioof4.5%derivedbyHoskingin2017.

TheanalysisoftheemploymentdatafortheSouthAfricanOceanEconomyhasbeenbaseduponasimilarmethodology,withtheHoskingmetricsusedtoextrapolatetheemploymentdataasadirectrelationshiptothemetricsusedtocalculateGrossDomesticProductintheprecedingsection.

Table 5: SA Ocean Economy Employment Forecast – Twenty Years

National Employment - Direct Jobs Year 0 Year 6 Year 10 Year 15 Year 20Sectors for Ocean Economy:- 2018 2024 2028 2033 2038

Total Economy - Jobs (FTE) 12,223,391 13,728,772 14,894,394 16,649,922 18,514,407


2 Touris m 59,934 70,700 79,574 93,373 107,718 3 O ffs hore O il & G as 9,179 9,341 9,529 9,892 10,091 4 Cons truc t ion 63,415 78,330 91,635 114,193 136,936 5 Renewable E nergy 156 440 672 878 1,187 6 F is heries and A quac ulture 42,211 47,072 50,952 56,809 62,536 7 Com m unic at ion 6,921 7,383 7,836 8,546 9,071 8 Des alinat ion 500 4,375 8,250 12,125 16,000 9 A ll O ther (Non O ps . P hak .] - 65,000 50,000 200,000 300,000

Operation Phakisa - Direct Jobs 222,416 325,419 343,851 545,709 696,495 Operation Phakisa - Indirect & Other Jobs 295,992 268,701 307,232 191,372 137,054 Ocean Economy - Total Jobs (SIC): 518,408 594,120 651,083 737,081 833,549 - % of Total Jobs in S A : 4.2% 4.3% 4.4% 4.4% 4.5%




The following observations based upon the employment table are worthy of noting:

• ItisimportanttonotethatOperationPhakisaonlyinvestigatedthenascentoceaneconomysectors,orthosethatwerenotyetfullydevelopedandhadsignificantdevelopmentpotential,

• Thecurrentreport’s2018estimateforthetotalOceanEconomyformalemployment518,408jobsversustheHoskingestimateof425,524fortheyear2015,

• Thecurrentreport’sdirectOceanEconomyestimatefor2018,basedupontheHoskingmethodologyofR222,416jobsfortheyear2018,withadifferentialof295,992jobs.

• OnasimilarbasistotheGDPdataabove,thedifferentialof295,992jobshasbeeninvestigatedandconsideredinthecontextofthebrieffortheOperationPhakisalaboratories,andhasbeenascribedto‘indirectandinducedemployment’andotherfactors.These‘indirectandother’factorsareconsideredtobebothOceanEconomysectorandsub-sectorswhichwerenotconsideredinsufficientdetail,andtheeconomiceffectsofindirectandinducedimpactalongthevaluechain,whichwerenotconsidered.

• UponreachingyeartwentyofthecurrentOceanEconomyforecast,fortheyear2038thetotalOceanEconomyemploymentisforecasttobe833,549jobs,versustheOperationPhakisaforecastof788,000to1,004,000jobsbytheyear2033.Thisisvarianceof62,451,or6.96percent,ifwetaketheOperationPhakisaaveragetobe896,000jobs.

• Iftheofttoutedfigureof1,000,000jobsforOperationPhakisaovertwentyyearsisconsidered,thenthedifferentialis166,451jobsless,whichisamoresubstantialunderstatementof16.64percentagepointsachievedinthecurrentestimation.

Duetothisrelativelylargevariationintheformalsectoremploymentforthedifferentmethodologiesbeingused,itissuggestedthatfurtherresearchbeundertakeninthisarea.

MrStephenHoskinginhis2017OceanEconomypaperhascalculatedthatinordertorealiseGDPofR177billionby2033willrequireanaverageannualrealgrowthrateof1.82percent,whichheconcludesisnotoverlyambitious.Hehasalsocalculatedthatinordertorealise1millionjobsby2033arealgrowthof4.9percentwouldberequiredperannum,andhestatesthatthisgrowthwouldbeambitious.(Hosking,2017)



2.4 THE EASTERN CAPE OCEAN ECONOMY

TheEasternCapeOceanEconomytwenty-yearforecasthasbeenbaseduponthesamemethodologyasappliedfortheSouthAfricaneconomy,asdescribedabove,butbasedupontheeconomicdataasrelevanttotheEasternCapeforthebaseyearof2018,andassuppliedbyQuantecDataduringtheyear2019.ThepasttenyearsQuantecDatahasbeenanalysedinordertodeterminethetrendsforeacheconomicsector,withcertainsectorsindeclineandothersascending.Themethodologyandescalationfactorsusedpereconomicsectorareprovidedinappendix12.3hereafter.

Ithasbeenassumedthatthesamefactorsapplyforthe‘IndirectandOther’fortotalGDPandemploymentaswasfoundtoapplyforthebroaderSouthAfricaneconomy.

ThegeneralcompositionoftheEasternCapeeconomyisdifferenttothatoftheSouthAfricaneconomy,andthishasresultedinasetofdatawhichissubstantiallydifferentintheirtotalsandwithadifferentinternalcompositionduetothedifferencesintheinitialcomposition.TheannualescalationfactorsfortheEasternCapeeconomicsectorsarealsodifferenttothoseusedfortheSouthAfricaneconomy,andarebasedupontheEasternCapeeconomicgrowthtrendsoverthepastfiveyearsandthecurrentexpectationsforthefuture.Thisforecastdataisrepresentedinthefollowingtable:

Table 6: Eastern Cape Ocean Economy GDP Forecast – Twenty Years

Provincial GDP - Direct Year 0 Year 6 Year 10 Year 15 Year 20Sectors for Ocean Economy:- 2018 2024 2028 2033 2038

Total Economy GDP - Rand Million 214,384 231,385 246,108 263,827 298,702

1 M arine Trans port and M anufac turing 1,204 1,291 1,365 1,452 1,612 - M arine Trans port 615 674 722 780 861 - M arine M anufac turing 589 617 642 672 751

2 Touris m 1,133 1,209 1,283 1,362 1,541 3 O ffs hore O il & G as 13 13 13 13 13 4 Cons truc t ion 819 916 1,011 1,113 1,306 5 Renewable E nergy 6 6 6 6 7 6 F is heries and A quac ulture 173 178 184 189 204 7 Com m unic at ion 274 300 321 347 383 8 Des alinat ion 38 525 750 975 1,200 9 O ther 'O c ean E c onom y ' - - - - -

Operation Phakisa - Direct GDP: 3,659 4,438 4,933 5,458 6,266 Operation Phakisa - Indirect & Other: 5,901 6,050 6,369 6,827 7,863 Operation Phakisa - Total GDP: 9,559 10,488 11,302 12,285 14,129 - % of Total G DP in S A : 4.5% 4.5% 4.6% 4.7% 4.7%




The following observations based upon the Eastern Cape GDP table are worthy of noting:

• ThetotalEasternCapeGDPfortheyear2018isR214billionwhichis7.49percentoftheSouthAfricantotaleconomyGDPofR2,859billion.

• ThetotalEasternCapeOceanEconomyGDPfortheyear2018isR9.56billionwhichis7.48percentoftheSouthAfricanOceanEconomyGDPofR127billion.

• ThetotalEasternCapeOceanEconomycommencesat4.5percentoftheEasternCapegeneraleconomy,andgraduallygrowstoR14.13billionwhichrepresents4.7percentofthetotalEasternCapeeconomyasforecastatR298.70billion.

ThisGDPdataconstitutesthebaselinefortheEasternCapeOceanEconomy,bothasthecurrentsituationin2018andastheanticipatedgrowthandcompositionoverthenexttwentyyearstotheyear2038.ItisagainstthisbaselinethatthecurrentstatusofboththeOperationPhakisaprojectsfortheEasternCapehavebeenevaluatedfurtherinthisreport,aswellasthenewandemergingprojectsatthispointintime.

ThesamemethodologyhasbeenappliedtotheemploymentdatafortheEasternCape,bothinthecontextofthegeneraleconomyandmorespecificallyfortheOceanEconomyasdefinedbytheOperationPhakisaLaboratoriesworkinggroupsandultimatesynopsis.

ThegeneralcompositionoftheEasternCapeemploymentprofileisdifferenttothatoftheSouthAfricaneconomy,andthishasresultedinasetofdatawhichissubstantiallydifferentfromtheSouthAfricaneconomytotalsastheGDPwasabove,andwithadifferentinternalcomposition.Thisdataisrepresentedinthefollowingtable:

Table 7: Eastern Cape Ocean Economy Employment Forecast – Twenty Years

Provincial Employment - Direct Jobs Year 0 Year 6 Year 10 Year 15 Year 20Sectors for Ocean Economy:- 2018 2024 2028 2033 2038

Total Economy - Jobs (FTE) 907,012 1,031,341 1,136,043 1,300,130 1,477,608

1 M arine Trans port and M anufac turing 2,476 2,640 2,772 2,971 3,149 - M arine Trans port 884 995 1,078 1,190 1,313 - M arine M anufac turing 1,592 1,645 1,695 1,781 1,835

2 Touris m 4,464 5,982 7,271 9,280 11,844 3 O ffs hore O il & G as 35 35 36 37 37 4 Cons truc t ion 4,326 5,526 6,717 8,573 10,530 5 Renewable E nergy 8 9 9 10 11 6 F is heries and A quac ulture 3,689 4,175 4,608 5,342 5,956 7 Com m unic at ion 393 443 480 529 585 8 Des alinat ion 37 325 612 900 1,187 9 A ll O ther (Non O ps . P hak .] - - - - -

Operation Phakisa - Direct Jobs 15,428 19,135 22,506 27,643 33,300 Operation Phakisa - Indirect & Other Jobs 20,303 22,011 23,388 25,775 27,833 Operation Phakisa - Total Jobs 35,731 41,145 45,894 53,418 61,133 - % of Total Jobs in S A : 3.9% 4.0% 4.0% 4.1% 4.1%




The following observations based upon the Eastern Cape employment table are worthy of noting:

• ThetotalEasternCapeformalemploymentfortheyear2018is907,012whichis7.42percentoftheSouthAfricantotalemploymentof12,223,391formaljobs.

• ThetotalEasternCapeOceanEconomyemploymentfortheyear2018is35,731whichis6.89percentoftheSouthAfricantotalOceanEconomyemploymentof518,408jobs.

• ThetotalEasternCapeOceanEconomycommencesat3.9percentoftheEasternCapegeneraleconomy,andgraduallygrowsto61,133jobswhichrepresent4.1percentofthetotalEasternCapeemploymentforecastof1,477,608jobs.ThesefiguresareslightlylowerthantheSouthAfricanaverageof4.2percentfor2018and4.5percentfor2038.

ThisemploymentdataconstitutesthebaselinefortheEasternCapeOceanEconomy,bothasthecurrentsituationin2018andastheanticipatedgrowthandcompositionoverthenexttwentyyearstotheyear2038.ItisagainstthisformalemploymentbaselinethatthecurrentstatusofboththeOperationPhakisaprojectsfortheEasternCapehavebeenevaluatedfurtherinthisreport,aswellasthenewandemergingprojectsatthispointintime.



2.5 PROJECTS IDENTIFIED FOR THE EASTERN CAPE OCEAN ECONOMY

OneoftheobjectivesofthisstudyistoestablishwhattheexpectedOceanEconomyisfortheEasternCapeintheformofabaselineoveraforecastperiodoftwentyyears,andwithaclearlydefinedeconomicandemploymentprofileacrossthevariousoceansectorsofactivity,andthenbeabletomeasureactualperformanceandprojectsagainstthisbaseline.Thishasnecessitatedtheestablishmentofthebaselineaspertheforegoingsections.

ThefinalanalysisforthisreporthasbeentoascertainwhattheOceanEconomy‘pipeline’ofprojectsiswithintheEasternCape,inordertobeabletodeterminewhetherthesetargetsarerealisticandabletobeachievedwiththeprojectsbeingcontemplatedandimplemented.

DuetotheimplementationofOperationPhakisaatbothanationalandprovinciallevel,togetherwithagrowingawarenessoftheimportanceoftheOceanEconomyingeneral,andfortheEasternCapeinparticular,thereisasubstantialbodyofknowledgeandawarenessofprojectsfortheoceaneconomydomain.AlistofimportantandrelevantEasternCapestakeholdershasbeencompiledasperappendix11hereafter,andaseriesofmeetingsandfocusedengagementswerefacilitatedandattendedafteraletterofintroductionandproposedmeetingagendahadbeenforwardedtoeachstakeholder.Theletterofintroductionisenclosedasappendix11.2hereafter.Thestakeholderengagementprocessisstillongoing.

Thestakeholderengagementprocessresultedinimportantinformationbeingcollectedandcollated,certainofthisintheformofa‘ProjectBidBook’aspertheexamplesinchapter8hereafter.TheseprojectshavebeenanalysedatahighlevelandtheprojectdetailsincorporatedintoaprojectdatabasewhichrecordstheprojectdetailsoveratwentyyeartimeframetomatchtheEasternCapeOceanEconomybaseline,andcurrentlyhasrecordedfifty-nineprojectswithintheeightOperationPhakisaeconomicsectorsandenablersasfollows:





New EC Ocean Projects - % 100.0% 100.0% 100.0% 100.0%1. M arine Trans port & M anu. 2.77% 2.98% 1.54% 13.56%2. O ffs hore O il & G as 71.10% 52.06% 8.54% 13.56%3. A quac ulture 2.95% 27.26% 71.99% 15.25%4. M arine P rotec t ion & G ovt. 0.18% 0.61% 0.27% 6.78%5. S m all Harbour Developm ent 4.55% 6.10% 2.76% 20.34%6. Coas tal & M arine Touris m 18.36% 10.57% 14.39% 15.25%7. S k ills Developm ent 0.05% 0.31% 0.46% 11.86%8. Res earc h & Innovat ion 0.04% 0.11% 0.05% 1.69%9. O ther O c ean E c onom y 0.00% 0.01% 0.00% 1.69%


Table 8: Priority Projects Identified for the Eastern Cape Ocean Economy



Theprojectdetailsforeachofthesefifty-nineprojectshasbeenrecordedandextrapolatedoveratwentyyeartimeframe,withprojectcommencementdates,projectcapitalexpenditurevaluestoimplement,thecommencementdateforoperations,thevalueofoperationsorbenefitsuponcommencement,andthedirectformalemploymentopportunitiescreatedfromoperations.ThisdatasetfortheeighteconomicsectorsbeingconsideredhasallowedaGrossDomesticProductanddirectformalemploymentcreationprofileoverthetwenty-yeartimeframetobeformulated.

InordertorelatethisdatabacktotheEasternCapeOceanEconomybaselinewhichhasbeenforecastasindicatedearlierinthisreport,thissetofdataisjuxtaposedagainstthebaselineasperthefollowingfigures:

Figure 1: Eastern Cape Ocean Economy – GDP and Employment Projection

Source: Economic Model developed for the Eastern Cape Ocean Economy study, 2019.

Thisanalysisprovidesausefulinsightintothetheoreticalbaselinewhichhasbeenestablishedasthe‘BusinessAsUsual’scenarioandrepresentedbythebluelineineachinstanceabove,andthesummaryofthemoreconcreteandidentifiablesuiteofprojectswhichhavebeeninvestigatedforthisstudyandcollatedintoadatasetfurtherinthisreportandrepresentedbytheredlineabove.

ItisimmediatelyapparentthatthefigurerepresentingtheGrossDomesticProductfortheEasternCapeOceanEconomymovesabovethemoretraditionaleconomicbaselineasthehighcapitalexpenditurevaluesaretakencognisanceofintheearlieryears,assumingthattheseprojectsareimplementedintheforeseeablefuture,andthensettlesintoamoresteadypatternabovethebaselineastheoperationalproductionisrealisedintheformofGDP.BothoftheprojectmeasuresforGDPandemploymenthaveassumedazerocommencementpositionforthesakeofthesecalculations,whichisnotreality,withafurtherstudybeingrequiredtoestablishthisactualbaseline.

Fromtheemploymentdataitcanbeseenthatemploymentrampsupconfidentlytoyeartenastheprojectsareimplementedandoperationscommencesafterconstructioniscompleted,withaslowingingrowththereafter.Theemploymentgrowthforthesuiteofprojectsidentifieddoesnotexceedtheestablishedbaselineatanypoint.Therearearangeofpossiblereasonsforthis,withcertainofthesebeingthattheprojectsbeingconsideredaretoocapitalintensiveanddonotproducesufficientemploymentforcapitalexpenditure;thatthefullemploymentvaluechainsforindirectandinducedemploymenthavenotbeenfullyrepresentedhere;orthattheforecastbaselinehasbeenincorrectlyforecastatanexcessivelevel.



2.6 ECONOMIC IMPACT ASSESSMENT OF PRIORITY PROJECTS

Inordertoquantifytheimpactofaninterventionontheeconomyandsociety,aneconometricalmodellingexercisehasbeenundertaken.Currentandacceptedeconomicmultipliersandmethodologyhavebeenusedforthisassessment.Economicimpactsrefertotheeffectsonthelevelofeconomicactivityinagivenarea,asaresultofsomeformofexternalinterventionintheeconomy.Theinterventioncanbeintheformofnewinvestmentin,forexample,technology,transportfacilities,socialdevelopment,housing,businessdevelopment,etcetera.

It can furthermore also be in terms of changes in production processes or downscaling of activities. The economic effects may be viewed in terms of:

• JobCreation,• Valueaddedactivities,• Personalincome(includingwages),• Businessoutput(orsalesvolume),• Wealth(includingpropertyvalues),• Naturalresourceusage,increaseordepletioninvalue,• Externalityvaluesofproposedproject,positiveandnegative,and• Non-marketvaluations.

Anyofthesemeasurescanbeanindicatorofimprovementintheeconomicwell-beingofresidentsofcommunitiesthatisusuallyagoalofinvestmentorinfrastructureprojects.Theneteconomicimpactisusuallyviewedastheexpansionorcontractionofanarea’seconomy,resultingfromchangesin(i.e.,opening,closing,expansionorcontractionof)afacility,project,program,orthewholeindustry.

TheSouthAfricanIndustrialDevelopmentCorporation(IDC)undertakesadetailedanalysisoftheSouthAfricaneconomyeveryfiveyearsandcompilesaSocialAccountingMatrix(SAM)fortheeconomywithanemphasisonthefirstround,direct,indirectandinducedimpactsforGrossDomesticProduct,andemploymentcreationforeachR1millionofeconomicactivity.AseriesofInput-OutputmultipliersaregeneratedfromthisforSouthAfricaandtheseareusedtoprovideestimatesoftheeconomicimpactofprojectswithinthevariouseconomicsectorsaspertheStandardIndustrialClassification(SIC).TheIDCmultipliersfortherelevantOceanEconomysectorshavebeenappliedtotheeconomicoutputmeasuredas‘Production’or‘Turnover’,andtheresultsrecordedforallconstructionactivitiesorcapitalexpenditureasfollows:

Table 9: Economic Impact Assessment along the Value Chain - Construction

Construction Activities - CAPEX - Total - To Year 20 (Rand Millions).[R e a l va lu e , 'D e fla te d ' b a ck - Jo b s ]

Economic Activity & Employment Direct Indirect Induced TotalP roduc t ion / Turnover R 89,034 R 14,107 R 24,322 R 127,463G ros s Dom es t ic P roduc t (G DP ) R 57,204 R 15,946 R 27,494 R 100,644Inc om e (W ages & P rofits ) R 17,161 R 4,784 R 8,248 R 30,193E m ploy m ent (Job Y ears ) 64,509 21,425 40,040 125,975

Source: D e re k Zim m e rm a n ca lcu la tio n s (2 0 1 9 ) [ IDC S ec tor: B uild ing Cons truc t ion (35)]



ThedatarecordsthatR89billionofdirectcapitalexpenditureresultsinafullvaluechainimpactofR127billion,whichtranslatesintoGrossDomesticProductofR100billion,creating64,509directemploymentopportunitiesovertheimplementationphases,andatotalof125,975formaljobsovertheentirevaluechain.TheincomeearnedintheformofwagesandprofitsandliabletotaxationforthefiscusisR30billionalongtheentirevaluechain.

AsimilarmethodologyisappliedinordertomeasurethemoresustainableoperationalimpactoftheseEasternCapeOceanEconomyprojectsfromyeartwentyoncetheyareallimplementedandstabilised.Thisdataisindicatedinthetablebelow:

Table 10: Economic Impact Assessment along the Value Chain - Operations

ThedatarecordsthatR45.8billionofdirectprojectexpenditureoroperationalincomeinyeartwentyresultsinafullvaluechainimpactofR65.6billion,whichtranslatesintoGrossDomesticProductofR19.8billion,creating32,147directformalemploymentopportunitiesduringyeartwenty,andatotalof60,145jobsovertheentirevaluechaininthisyear.TheincomeearnedintheformofwagesandprofitsandliabletotaxationforthefiscusisR18.2billionalongtheentire value chain.

Theemploymentfiguresindicatedabovearelowerthanthosecalculatedforthefullfifty-nineprojects,whichhasatotalof42,152employmentopportunities,ofwhich30,344areforaquaculture,withthemajorityofthesebeinginthelabourintensivemarinetilapiaproject.

2.7 CONCLUDING STATEMENT AND NEXT STEPS

FollowingonfromthisbaselinestudyisaseriesofstakeholderengagementsessionstoshowcasethepreliminaryfindingsandstartpreparingtheimplementationplanintheformofaProjectBidBook,RoadMapandstrategy,tobepresentedataninvestor’sconferenceinSeptember2019.

Thisreportalsoneedstoidentifyaseriesofissuesforfurtherresearch.

Total Project Activities at Year 20 - Excluding Construction Average (Rand Millions).


Source: D e re k Zim m e rm a n ca lcu la tio n s (2 0 1 9 ) [ IDC S ec tor: A blend of s everal s ec tors ]



3 STRUCTURE OF THIS REPORTDuetothescaleandcomplexityoftheOceanEconomyingeneral,andtheprocessofcompilingabaselineeconomicassessmentonbothanationalandprovincialbasis,thisstudyisnecessarilyrathercomplexandhasarangeofprimarystudiesbeingrequiredinadvanceofanalysingtheprovincialoceaneconomy.IthasalsobeennecessarytodefinetheOceanEconomyinordertoclearlydelineatewhatitisbeingmeasuredandevaluated.

FortheanalysisoftheprovincialoceaneconomyoftheEasternCapeithasbeennecessarytoundertakearangeofstakeholderengagementsandassemblethedatacollectedintoaformatwhichiscomparabletoboththehigherordereconomyandmorerepresentativeOceanEconomyframework,togetherwiththeOperationPhakisastudywhichlookedatnascentoremergingoceaneconomysectorsasasubsetofthefulloceaneconomy.ThishasresultedinvariouseconomicmodelsbeingusedforbothemploymentandGrossDomesticProduct,atanationalandprovinciallevel,andafterananalysisofthepastdecade,beforeatwenty-yearprojectionofthefulleconomyhasbeenundertaken,withtwosubseteconomiesbeingconsideredwithinthis;beingthedefinedoceaneconomyandthelesserOperationPhakisaoceaneconomysubset.

Thereporthasalsoprovidedthreetiersofinformation,withthefirstbeingaonepageExecutiveSummary,thesecondbeinganinepage‘Overviewofthereport’sfindings,andthebalancebeinganoverviewofthemethodologyadopted,economicoutputsatanationalandprovinciallevel,thestakeholderengagementprocessandparticularsofspecificprojects,withanextensiveappendixbeingusedtohighlightcertainofthefoundingliteratureandassumptionsusedinthiswork.

A high level overview of the report is as follows:

CHAPTER1:EXECUTIVESUMMARYAconciseone-pageoverviewwithahigh-levelsummaryofthereport’sfindings.

CHAPTER2:ANOVERVIEWOFTHEREPORT’SFINDINGSAninepagesummaryofthereport’sfindings(precedingchapter)withreferencetotheSouthAfricaneconomy,traditionaloceaneconomy,byStandardIndustrialClassification(SIC)categoryandOperationPhakisaoceaneconomy;followedbyanoverviewoftheEasternCapeeconomy,traditionaloceaneconomy(SIC)andOperationPhakisaoceaneconomy.Thefifty-nineEasternCapeoceaneconomyprojectsidentifiedareplacedincontextwiththebaselineestablished,togetherwithaneconomicimpactassessmentoftheprojects.

CHAPTER3:STRUCTUREOFTHISREPORTThisoverviewstructuretoassistthereaderretaincontextwithinthereport.

CHAPTER4:DEFININGTHEOCEANECONOMYAhighleveloverviewofinternationaltrends,withsupportintheappendix,togetherwithanoverviewandupdateonSouthAfrica’sOperationPhakisafortheoceaneconomy.

CHAPTER5:ECONOMICCONTEXTOFTHEOCEANECONOMYFirstlyanoverviewoftheSouthAfricaneconomygoingbackadecadeinordertoestablishtrends,followedbyatwentyyearprojectionoftheSouthAfricaneconomywiththeoceaneconomyasdefinedincluded,withtheOperationPhakisasub-setincludedtherein.[Foureconomicmodels,eachonesplitintoGDPandemployment-eightmodels]



This same exercise has then been undertaken for the Eastern Cape, [Four economic models, each one split into GDP and employment – eight models], as per the figure below:



CHAPTER6:OPERATIONPHAKISA–EASTERNCAPEPROJECTSANDPOTENTIALTheeightOperationPhakisaoceaneconomysectorsareanalysedfromanationalandthenprovincialperspective.Thekeyprojectspersectorarehighlightedandatablepreparedwhichsummarisesthetwenty-yearroll-outandeconomicpotentialoftheprojectsintermsofGDPandemploymentpotentialsector.Fifty-nineprojectsarehighlighted.

CHAPTER7:PORTSANDTRANSNETASANECONOMICROLE-PLAYERTheEasternCapeportsareanalysedasanimportantoceaneconomyroleplayer.

CHAPTER8:A‘PROJECTBOOK’OFPRIMEEASTERNCAPEOCEANECONOMYPROJECTSCertainoftheoceaneconomyprojectsidentifiedareportrayedin‘BidBook’format.

CHAPTER9:CONCLUSIONSANDRECOMMENDATIONSAsetofconclusionsandrecommendationsareformulated.

CHAPTER10:REFERENCESThereferencesconsultedandreferredtointhestudyarelisted.

CHAPTER11:STAKEHOLDERENGAGEMENTAlistofthestakeholdersengagedwithisprovided.

CHAPTER12:APPENDIXCertainsupportingandadministrativepiecesusedinthestudyarehighlightedhereasadditionalinformationortosupporttheassumptionsandfindingsmadeinthereport.

CHAPTER13:ANECONOMICOVERVIEWOFSOUTHAFRICA&THEEASTERNCAPEAneconomicoverviewoftheEasternCapeinthecontextofSouthAfricaisprovided,aswellasthetwoMetropolitanMunicipalitiesandtwooftheDistrictMunicipalities,inordertoprovideasocio-demographicandeconomicprofileoftheprovinceagainstwhichboththebaselineandoceaneconomyprojectscanbecontextualised.



4 DEFINING THE OCEAN ECONOMY

4.1 THE OCEAN ECONOMY GLOBALLY

Theoceanhasthepotentialtobetheneweconomicfrontier.Itholdsthepromiseofimmenseresourcewealthandthepotentialforboostingeconomicgrowth,employmentandinnovation.Theoceanisincreasinglyrecognisedasbeingindispensableforaddressingmanyoftheglobalchallengesfacingtheplanetinthedecadestocome,fromworldfoodsecurityandclimatechangetotheprovisionofenergy,naturalresourcesandimprovedmedicalcare.

Whilethepotentialoftheoceantohelpmeetthesechallengesisimmense,itisalreadyunderstressfromover-exploitation,pollution,decliningbiodiversityandclimatechange.Realisingthefullpotentialoftheoceanwillthereforedemandresponsible,sustainableapproachestoitseconomicdevelopment.

‘Theglobaloceaneconomy,measuredintermsoftheocean-basedindustries’contributiontoeconomicoutputandemployment,issignificant.PreliminarycalculationsonthebasisoftheOECD’sOceanEconomyDatabasevaluetheoceaneconomy’scontributionin2010veryconservativelyatUSD1.5trillion,orapproximately2.5%ofworldgrossvalueadded(GVA).Offshoreoilandgasaccountedforone-thirdoftotalvalueaddedoftheocean-basedindustries,followedbymaritimeandcoastaltourism,maritimeequipmentandports.Directfull-timeemploymentintheoceaneconomyamountedtoaround31millionjobsin2010.Thelargestemployerswereindustrialcapturefisherieswithoverone-thirdofthetotal,andmaritimeandcoastaltourismwithalmostone-quarter.

Economicactivityintheoceanisexpandingrapidly,drivenprimarilybydevelopmentsinglobalpopulation,economicgrowth,tradeandrisingincomelevels,climateandenvironment,andtechnology.’(OECD(2016),TheOceanEconomyin2030,OECDPublishing,Paris.]

Thisnew“oceaneconomy”isdrivenbyacombinationofpopulationgrowth,risingincomes,dwindlingnaturalresources,responsestoclimatechangeandpioneeringtechnologies.Whiletraditionalmaritimeindustriescontinuetoinnovateatabriskrate,itistheemergingoceanindustriesthatareattractingmostoftheattention.Theseindustriesincludeoffshorewind,tidalandwaveenergy;oilandgasexplorationandproductioninultra-deepwaterandexceptionallyharshenvironments;offshoreaquaculture;seabedmining;cruisetourism;maritimesurveillanceandmarinebiotechnology.Thelong-termpotentialforinnovation,employmentcreationandeconomicgrowthofferedbythesesectorsisimpressive.(OECD,2016)

Numerousoceancountrieshaveattemptedtodelineatethesizeoftheoceaneconomy.Thishasbeenparticularlychallengingbecauseofvariationsindefinitions,standardisationmethodsandscopeboundaries(ParkandKildow,2015).Inadditiontothis,istheconsistentneedtoconservetheocean’sresources,managethemforsustainableuseanddecidingwhichentityshouldberesponsiblefortheregulationoftheseresources(Barbesgaard,2018).In2015,therewasalargeresurgenceinthecallforinvestmentinthe“blueeconomy”onaglobalscale,whichbroughtwithittheneedfor“triple-benefit”solutions,inwhichsocial,economicandenvironmentalstakeholdersweremeanttobenefit.(Barbesgaard,2018).



Inadditiontotheissueofsize,isthesearchfortheactualdefinitionofanoceaneconomy.Thiscouldbeattributedtothefactthattheactivitiesindifferentregionsdifferandassuch,thedefinitionanddelineationoftheoceaneconomywillvaryfromonegeographiclocationtothenext.Assuch,itisofparticularimportancetounderstandwhattheSouthAfricanandEasternCapeoceaneconomyiscomprisedof,inordertodevelopalocallyrelevantdefinitionforitscontext.

Numerousauthorshaveattemptedtodefinetheoceaneconomy(ParkandKildow,2015;Hosking,2017;FindlayandBohler-Muller,2018).AcomprehensivedefinitionisthatprovidedbyHosking(2017)whichstatesthat“theoceansector(economy)isonethatincludesalleconomicactivitiescloselylinkedtotheoceanresourcesandenvironmentandordependenttosomemeaningfuldegreeontheocean”.FindlayandBohler-Muller(2018)addtothisdefinitionbystatingthattheoceaneconomyincludesallgoodsandservices,marketandnon-marketwhichbenefitthehumanpopulation.ThisexpansionbyFindlayandBohler-Muller(2018)clearlydifferentiatesthedifferencebetweenthe“ocean”and“blue”economy,astheblueeconomyencapsulatesnotonlytheeconomicbenefits,butalsoaddressestheneedsandeffectsontheenvironmentalandsocialaspectsofthesetransactions(Voyeretal.,2017).

Forthepurposesofthisstudy,theStevenHoskingdefinitionoftheOceanEconomyasfollowsisused:‘theoceansector(economy)isonethatincludesalleconomicactivitiescloselylinkedtotheoceanresourcesandenvironmentand/ordependenttosomemeaningfuldegreeontheocean’(Hosking,2017)[Ourboldanditalichighlights]ThisdefinitionhasbeenacceptedinthecompilationofthisreportasthemostappropriateforSouthAfrica,anditisalsodeemedtobesuitablefortheEasternCapeOceanEconomy.

4.2 OPERATION PHAKISA IN SOUTH AFRICA

TheNationalDevelopmentPlan(NDP)isthecountry’ssocio-economicdevelopmentblueprintwhichenjoinsustocreateabetterlifeforallcitizensinaninclusivesociety.TheNDPguidesvarioussectorplansandpolicies,includinghowbudgetandskillsinvestmentandotherresourcesareallocatedtomoveSouthAfricaforward.ItprovidestheframeworkinwhichGovernment,organisedbusiness,labourandcitizenscanworktogethertoaccelerateeconomicgrowthandresolvethetriplechallengeofunemployment,povertyandinequality.

OperationPhakisaisaninitiativeoftheSouthAfricanGovernment,tofasttracktheimplementationofsolutionsoncriticaldevelopmentissues.ThefirstimplementationofOperationPhakisaisledbytheDepartmentofEnvironmentalAffairstofocusontheoceaneconomy.TheinitiativewillfocusonunlockingthepotentialofSouthAfrica’soceanvaluedatanadditionalGDPofR129toR177billionandapproximatelyonemillionjobsby2033(DEDEAT,2014b;OperationPhakisa,2014).

ThemethodologyofOperationPhakisafocusesonbringingkeystakeholderstogethertocollaborateindetailedproblemanalysis,prioritysettingandinterventionplanninganddelivery.ThefirstOceanEconomyLabwasheldinDurbanfromthe8th–15thJuly2014andwasconcludedonthe15thAugust2014.

The workshop identified four priority areas to unlock the economic potential of South Africa’s ocean these were:

• Marinetransportandmarinemanufacturingactivities,• Offshoreoilandgasexploration,• Aquaculture,and• Marineprotectionservicesandoceangovernance(OperationPhakisa,2014)



A further two priority areas were added thereafter with these being:

• Smallharboursdevelopment,and• Coastalandmarinetourism.

Subsequent to this the two cross cutting areas have also been added:

• SkillsDevelopmentandCapacityBuilding• Research,TechnologyandInnovation.

IntheEasternCapethemarinetransportandmanufacturingsectorhasbeenboostedbythelaunchoftheSouthAfricanInternationalMaritimeInstitute(SAIMI)ajointinitiativebetweentheSAMaritimeSafetyAuthority(SAMSA)andtheNelsonMandelaUniversity(NMU).Theinstitutewillpromoteandcoordinatemaritimeeducation,skillsdevelopmentandresearchtosupportSouthAfricainharnessingthepotentialofmaritimeresources.NMUhasrecentlyopenedtheOceanSciencesCampuswhichhousestheInstituteforCoastalandMarineResearch(CMR).

The six laboratory stream and two cross cutting areas of Operation Phakisa are highlighted in the following graphic:

Figure 2: Operation Phakisa Six Focus Areas and Two Enablers

Source: Growing The Ocean Economy Presentation, 2018.



AstudyconductedbytheDEAwhichcommencedin2013ontheunrealisedeconomicpotentialofSouthAfrica’soceansfoundthatjobslinkedtotheoceaneconomycouldrisetobetween800,000and1,000,000by2033,morethandoublethelevelrecordedin2010(316,000).ThefindingsledtothelaunchoftheOceanEconomylegofOperationPhakisa(Tablebelow).

ThestudyidentifiedfournascentoceaneconomysectorswithpotentialfornewgrowththatwerecurrentlynotrealisingtheirfullpotentialtoGDP.TheseincludeMarineTransportandManufacturing;OffshoreOilandGasexploration;Aqua-culture;andMarineprotectionservicesandoceangovernance.ThesegrowthareaspresentneweconomicpotentialinrespectoftheircontributiontoGDPandjobcreationasitisestimatedthattheycouldcontributeuptoapproximately76%(oftheOceanEconomycontribution)toGDPand95%towardsjobcreationby2033.GrowthandjobcreationfortheOceanEconomyiscurrentlydrivenbyeightsectors(withthefoursectorsreferredtoabovebeingthenewpotentialgrowthareas).Thetablebelowdepictstheestimatedgrowthandjobcreationinthoseeightsectors(2010to2033).

Table 11: Projected Growth and Job Creation within the Maritime Sector

Source: DEA, as quoted by HRDC, 2014. Page 27

MarinetransportandmanufacturingisexpectedtobethelargestcontributortoeconomicgrowthintheformofGDPwithfisheriesandaquaculturepotentiallythelargestcontributortojobcreation,ifconstructionisexcluded.ItisestimatedthatmarinetransportcouldcontributebetweenR20billionandR25billiontoGDPand18,000jobsby2033,primarilydrivenbygrowthincargohandling,withcontainervolumesprojectedtoincreaseby6%perannum.Furthermore,thecreationofthenationalshipregistryisexpectedtoassistthegrowthofthissector.MarinemanufacturingisexpectedtocontributebetweenR22billionandR36billiontoGDPand22,000to38,000jobsin2033,mainlydrivenbyrepairsandrefurbishmentthatcouldcontributeapproximately6%growthinbothGDPandjobcreation.

2010 2033 2010 2033Marine transport and manufacturing

16 42 - 61 15 40 - 56

Tourism 15 25 - 35 90 150 - 225 Offshore oil and gas 4 11 - 17 0.4 0.8 - 1.2 Construction 8 20 - 21 162 390 - 407 Renewable enery 0 14 - 17 0 0.9 - 1.1 Fisheries and aquaculture 7 10 - 16 30 170 - 250 Communication 4 7 - 10 19 32 - 52 Desalination 0 0.1 - 0.1 0 1.6 - 1.6 Total 54 129 - 177 316 788 - 1004

GDP Growth (R'bn) Job Creation ('000)Sector



4.2.1 A Summary of its Current State – Operation Phakisa

ThecontributionofthesesectorstowardSouthAfrica’sGDPin2010wasestimatedatR56billion,with316,000employedpeople(RepublicofSouthAfrica,DepartmentofPlanning,MonitoringandEvaluation,2018).ThelongtermforecastsaftertheimplementationofOperationPhakisawerethatthecountry’sGDPwouldgrowbyanadditionalfigureofbetweenR129–R177billionby2033anduptoonemillionjobswouldbecreatedintheprocess(RepublicofSouthAfrica,DepartmentofPlanning,MonitoringandEvaluation,2018).Themediumtermforecastssuggestedthatthecountry’sGDPwouldgrowbyanadditionalR20billion,andanadditional22,000directnewjobswouldbecreatedby2019(Walker,2014).

Thusfar,the2017OperationPhakisaprogressreportstatesthatR24.6billion(R15billionfromthegovernment)hasbeeninvestedintheoceaneconomyintheformofportinfrastructure,marinemanufacturing,aquacultureandoilandgassurveys(DEA,2017;Walker,2018).Thishadresultedinthecreationof6,517jobs,meaningthatapproximately15,000jobswouldhavetobecreatedinordertomeetthe2019targets(DEA,2017;Walker,2018).Itneedstobenotedthatthesearedirectjobsanddonotincludetheindirectandinducedjobswhichwouldbeincludedinthefullvaluechainoftheseeconomicactivities.

Some of the factors that have been listed as potential reasons for the delays in reaching Operation Phakisa’s initial targets are:

1.DELAYSINFINALISINGANDADOPTINGLEGISLATIONThetwopiecesoflegislationwhichcausedthedelayweretheMineralandPetroleumResourcesDevelopmentAct(MPRDA)andtheMarineSpatialPlanning(MSP)Bill.Thesetwopiecesoflegislationswereimportantastheyprovidedmechanismsforequitableandfairdesignationanduseofspaceinthemaritimedomain(Walker,2018).Asthesespacesoftenhaveamaximumcapacity,competingusesresultinlimitationintheavailableareathatcanbeusedforaquaculture,hencethenecessityforlegislationtoregulatethedesignationforusesofthespace(Walker,2018).

2.ADROPINTHEINTERNATIONALOILPRICETherewasadropinthepriceofoilin2014whichresultedinadelayincertainoftheprojects.Inaddition,PetroSA’sProjectIkhweziwasunabletolocatesufficientresourcesinSouthAfricanfields(DepartmentofEnvironmentalAffairs(DEA),2016).ThereiscurrentlynoestimateavailablefortheoilandgasreservesinSouthAfrica,makingthefutureofthisindustrydependentonthediscoveryofcommerciallyviabledeposits(DepartmentofEnvironmentalAffairs(DEA),2016).Inadditiontothisistheriskofthefacilitiesforoilandgasexplorationbeingunderutilised.Furthermore,thedemandtochangetotheuseofrenewableenergysourcesmeansthattheprinciplesoftheblueeconomyandsustainabledevelopmentgoalsdonotalignwiththeneedtodeveloptheoilandgasexplorationsector,puttingitsfutureatevenhigherrisk(Walker,2018).

3.DELAYSINSHIPREGISTRATIONVariousincentiveshavebeenprovidedtoshipownerstoregistertheirshipswiththeSouthAfricanregistryoperatedbySAMSA(Walker,2018).Unfortunately,theshipownershavebeenslowtoregistertheirshipsontheregistry,andaccordinglytoSAMSA,threeshipsarenowregistered(SouthAfricanMaritimeSafetyAuthority(SAMSA),2017).

4.MARINEPROTECTEDAREAS(MPA)SouthAfricahopedtoextendtheamountofEEZprotectedfrom0.4%to5%by2019,andestablishingamarineprotectedareasrepresentativenetwork(WWF-SA,2016).Thisextensionhaslargetourismpotential,aswellasarangeofbenefits,botheconomicandenvironmental(Sink,2016).Theoriginalproposalofanetworkof22MPA’swasreducedto19,whichresultedindropofthecoverageoftheEEZto4.4%,ashortfallof0.6%onthe2019protectiontarget(DepartmentofEnvironmentalAffairs(DEA),2017).TheMPAwasgazettedinMay2019(NationalEnvironmentalManagement:ProtectedAreasAct,2003(ActNo.57of2003)).Asofthe23rdofMay2019,20newMPA’shavebeendeclared,threeofwhichareintheEasternCapeprovince(NationalEnvironmentalManagement:ProtectedAreasAct,2003(ActNo.57of2003)).



MarineprotectioncouldplayasubstantialroleintheexecutionofOperationPhakisa,astheSouthAfricanNavy(SAN)areresponsibleforensuringthattheresourcesalongthecoastlineareprotectedandthatanyillegalactivityisprevented(DepartmentofDefence,2015).Assuch,twoprojectshavebeendevelopedtoensuretheupgradingofequipmentfortheSAN;namelyProjectBiroandProjectHotel(Walker,2018).UnderProjectBiro,sixnewpatrolvesselswillbeacquiredandunderProjectHotel,anewhydrographicsurveyvesselwillbeobtained,replacingtheantiquatedcurrentvessel,Protea(Walker,2018).ProjectHotelwillcostR1.8billion,andthepurchaseoftheoffshorepatrolvesselsforProjectBirohavebeenpostponed,whilstthepurchaseofthreeinshorepatrolvesselshasbeenconfirmed(Walker,2018).

Numerouscompaniesaredependentontheawardingforthevariouscontractsforthemarinetransportandmanufacturingsector(Walker,2018).Theeconomicimpactoftheseprojectsissignificantandassuchthesedelaysshouldbeaddressed.(Walker,2018).

SouthAfricaisamemberoftheIndianOceanRimAssociation(IORA),andassuch,hastriedtoaligntheoutcomesofOperationPhakisa:OceanseconomywithIORA’scoreobjectiveoftheblueeconomy(Walker,2018).ThismeansthatSouthAfricacouldreconcilethegoalsofthedevelopmentofitsoceaneconomy,withthegoalsofablueeconomywhichisanchoredontheprinciplesofsustainabilityandresponsiblestewardshipoftheenvironment(Walker,2018).

OneofthereasonsputforwardforthedelaysinimplementingOperationPhakisaisseenasbeingthatdespiteincreasingtheurgencyforawell-developedandunderstoodoceaneconomy,oneofthemajorhindrancestotheoceaneconomyisthecurrent“silomentality”whichappliestoboththedevelopmentandexecutionofplans(Walker,2018).IntegratedthinkingandimplementationisrequiredinordertoachievethegoalsassetbyOperationPhakisa,aswellasefficiencyandaction(Walker,2018).



4.2.2 Operation Phakisa: DEA Progress Report – May 2019

Theshort,mediumandlong-termgoalsintermsofjobsandeconomicgrowtharerepresentedinthetablebelow,inaccordancewiththelatestprogressreportonOperationPhakisa.

Table 12: Operation Phakisa:- Long-Term Goals – DEA May 2019

SHORT TERM (2016) MEDIUM TERM (2019) LONG TERM (2033)

Jobs 26,000 77,100 1,000,000


R7.5billion R32billion R129–R177billion


ThetablebelowisarepresentationofthemediumtermgoalsforfiveofthesectorsunderOperationPhakisa(Marineprotectionservicesandoceangovernancenotincluded).

Table 13: Operation Phakisa:- Medium-Term Goals – DEA May 2019

MARINE TRANSPORT AND MANUFACTURING

OFFSHORE OIL & GAS EXPLORATION

AQUA-CULTURE SMALL HARBOURS

COASTAL & MARINE TOURISM

Jobs 6,000to40,000–50,000created

- 2,227to15,000jobs(Incl.valuechain)

Potentialjobsof12,100

116,000jobsby2026


R7billion1toR14–R23billion

Promotesexplorationtodrill30newexploration

wells.

R0.7billiontoR3billion

R6billion R21.4billionby2016




Theoceaneconomyhascontributedthefollowingintermsofeconomicgrowthandjobcreationintheperiodbetween2010and2015:

Table 14: Operation Phakisa:- Economic Growth and Job Creation - DEA

2010 2014 2015

Jobs 316000 413356 425 525






Thetableaboveprovidesarepresentationoftheeconomicgrowthandjobcreationresultingfromtheoceaneconomyupto2015.

TheDEAreportsuggeststhatthepercentagedecreaseintheGDPcontributionbetween2010and2015canbeattributedtoadepressionintheglobalandlocaleconomicclimate,globaltradegrowthandcommoditypricesbeingunderdownwardpressure,lowoilpricesimpactingnegativelyontheoilandgassector,aswellasaslowdownininvestments,particularlyfromtheprivatesector(DepartmentofEnvironmentalAffairs(DEA).2019).

Furthermore,inordertoensurethatthehighleveltargetsareachievedfortheoceaneconomy,SouthAfricawillrequirearealgrowthrateof1.82%perannumfrom2015andarealemploymentrategrowthrateofapproximately4.9%perannumfrom2015(DepartmentofEnvironmentalAffairs(DEA).2019).

Thusfar,theSouthAfricanGovernmenthasunlockedR29.4billionininvestmentsfordirectprojectfundingandover7,351jobshavebeencreatedinvarioussectorsupto2019.



Thefollowingtablehighlightsthecurrentstateofeachofthe6sectorsandoneoftheenablersectorsinaccordancewiththeupdatedOperationPhakisareport(DepartmentofEnvironmentalAffairs(DEA).2019).

Table 15: Operation Phakisa Update – May 2019. Investment and Job Creation

Marine transport and

manufacturing

Offshore oil and gas exploration

Aqua-culture

Marine protection

services and ocean

governance

Small harbours

Coastal and marine

tourism

Skills development and capacity

building

Jobs 684–Transnet,4589–Securedinvestments,3705–Private

sector.

234workers–PetroSA

2030 58 240 200 Full data unclear

Investments R2.7billion–Transnet

infrastructure,R429million–DTIIncentives,R9.2billion–Secured

investments,R1.15billion–Private sector investments.

ApproximatelyR7.643billion–Private sector

ApproximatelyR10.806billion–Government

R1.2billionintotal,ofwhichoverR260millionwasfrom

government

R58.55millionbetween2017and2019-

Government

R300million–

Government.Private sector

investmentTBC.

R164 345million–

Governmentinvestmentover the last 3years.

R112 722million–

Projected private sector

investment

R1 275 800–Privatesector.

R196million–Government.

R67 717 471–SAIMI.

R52million–SAOGA.




5 ECONOMIC CONTEXT OF THE OCEANS ECONOMYAsmentionedearlier,globallyandnationally,theOceanEconomyistakingonanincreasingimportanceinthepolicyandeconomicrealmaslandbasedresourcesreachtheirextractiveplateau,andtheoceanisrecognisedasaresourcewhichifresponsiblymanaged,couldprovideasustainableanswertomanyofthepressingissuesfacinghumankindatpresent.

5.1 THE SOUTH AFRICAN OCEAN ECONOMY

TheOceanEconomyhasbecomeimportanttomostnationsbecauseofitseconomicpotentialandthedesiretosimultaneouslyexploittheresourcesandopportunitiesinordertosustainagrowingpopulationandoptimizethelong-termyieldoftheresources.AtthesametimetheOceanEconomymustalsofulfiltheroleofstewardoftheoceanresourcesandenvironmentonbehalfofvariousimportantconstituencies,includingtheinternationalcommunityandfuturegenerations.

ThesizeoftheareawhichpotentiallyconstitutestheOceanEconomyhasbeenframedbyHoskingsasfollows:‘ThesizeofSouthAfrica’sExclusiveEconomicZoneis1553000squarekilometers,greaterthanthelandareaofthecountry(whichis1219090squarekilometers).TheoceanareaisgovernedintermsofSouthAfrica’sMaritimeZonesActof1994andtheUnitedNationsConventionontheLawoftheSea(theLawofSeaTreaty),agreedtoin1982.(Hosking,2013.Page4)

Theoceanenvironmentsustainsandfacilitatesawiderangeofeconomicactivities,notonlyshippingtransport,recreation,fishingbutalsogovernmentones,likenavigationaidsandinformation,weatherforecasting,defence,searescue,policingandcustoms,marineandcoastalmanagementandresearchandeducation,andalsomining,farming(aquaculture),pharmacology,scienceandtechnologyandenergygeneration.TheOceanEconomyhasasignificantimpactonGrossDomesticProduct(GDP).

‘About75%ofallSouthAfrica’stradebyvalue(95%byvolume)istransportedbysea(SANGP100,2013:18).In2012exportsofgoodsmadeup24%ofGDPandimportsofgoodsasaproportionofGDPwere27%(SARB,June2013:S-106).’(Hosking,2013.Page6)

ThehighestcurrentvaluedcontributionoftheoceansectorwithintheSouthAfricaneconomyisfoundtobeintheprimarysector,duemainlytotheinfluenceofthefisheryindustry.Theoceansectorcontributesabout6.3%ofthetotalprimarysectorGDP.Thiscompareswitha2.8%contributiontoGDPinthesecondarysectoranda4.6%contributioninthetertiarysector,thelatterbeingboostedbytheshippingandrecreationindustrialactivity.

Thesecontributionsaverageoutandin2010theoverallcontributionoftheocean-linkedsectortoGDPwasabout4.4percent.

Conservationofmarineecosystemsshouldnotbeseenasseparatefromhumansurvivalanddevelopmentasitisthefoundationofensuringthatouroceansareabletoproducethegoodsandservicesonwhichwerely.Asacountrywithmoreoceanterritorythanland,therichandproductivecoastalwaterssupportthousandsofjobsandcontributebillionsofRandtothenationaleconomyeachyear.Intermsoffisheriesalone,historically,SouthAfricahasharvestedaround600,000tonnesofafishayearwhichprovideslivelihoodstoover127,000peopleandfoodsecuritytomany.Asoneofthemostbiodiversemarinenations,withalmost2,800kilometresofcoastand13,000speciesrecordedinourwaters,SouthAfrica’soceansandbeachesarealsoaglobaltouristattractioncontributingextensivelytotheSouthAfricaneconomy.



5.2 THE OCEAN ECONOMY IN THE CONTEXT OF THE SOUTH AFRICAN ECONOMY.

5.2.1 The South African Economy - Growth and Employment

AfairlydetailedanalysisoftheSouthAfricanandEasternCapeeconomiesandemploymenttrendshasbeenundertakeninordertobeabletocreatethebaselineagainstwhichtheOceanEconomywillbemeasuredandforecast.Inherentinthisexerciseisanunderstandingofthecompositionoftheeconomy,thesectorsthatareingrowthanddecline,andtherelevantannualgrowthordeclinefactors.

InordertogainaclearunderstandingofthedynamicsoftheSouthAfricaneconomyahigh-levelanalysisofthemajoreconomicsectorsandtheirgrowthordeclineoverthepasttenyearshasbeenundertaken.Thesameanalysishasbeencarriedoutforemployment.GrossValueAdded(GVA),asaproxyforGrossDomesticProduct(GDP),andEmploymentpersectorarethemajorindicatorsanalysed.

A ‘Decade of Economic Indicators’ portrays the following:

Table 16: SA Major Economic Sectors - Gross Value Added and Employment South Africa Gross Value Added Per Sector (GVA) Employment Per Sector (Formal Jobs)Economic GVA - Rm GVA - Rm % of Total % ∆ p.a. Jobs Jobs % of Total % ∆ p.a.Sector 2008 2018 2018 2008 - 2018 2008 2018 2018 2008 - 2018A gric ulture, F ores try & F is hing 67,072 74,157 2.6% 1.1% 818,612 845,373 6.9% 0.3%M ining & Q uarry ing 230,663 230,514 8.1% 0.0% 518,716 454,048 3.7% -1.2%M anufac turing 378,963 386,883 13.5% 0.2% 1,297,028 1,214,139 9.9% -0.6%E lec tric ity , G as & W ater 67,522 65,932 2.3% -0.2% 55,598 61,882 0.5% 1.1%Cons truc t ion 87,300 107,665 3.8% 2.3% 480,005 634,149 5.2% 3.2%Trade, Catering & A c c om m . 358,880 431,669 15.1% 2.0% 1,741,245 2,214,578 18.1% 2.7%Trans port , S torage & Com m . 226,135 273,191 9.6% 2.1% 369,321 482,656 3.9% 3.1%F inanc e & B us ines s 511,715 640,365 22.4% 2.5% 1,918,704 2,322,188 19.0% 2.1%G eneral G ovt. & S ervic es 381,768 478,693 16.7% 2.5% 1,704,273 1,954,244 16.0% 1.5%Com m unity , S oc ial & P ers . 149,216 170,530 6.0% 1.4% 1,724,786 2,040,134 16.7% 1.8%Total GVA 2,459,234 2,859,599 100.0% 1.6% 10,628,288 12,223,391 100.0% 1.5%Source: Rand Internat ional Capita l interpretat ion of Q uantec Data, 2019.Note: The G V A figures are in c ons tant 2010 pric es in Rand m illion, Q uantec Data, 2019 data. E m ploy m ent data is for F orm al em ploy m ent only .



5.2.2 Economic and Employment Growth – Manufacturing Sectors - SA

Asimilaranalysisofa‘DecadeofData’hasbeenundertakenfortheManufacturingsectoranditssub-sectors.ThissectorhasunderperformedthegeneraleconomyandhasrecordedaGVAgrowthrateof0.2%overthesameperiodwithanoveralldeclineinemploymentofanaggregate0.6%.Thecombinedagro-processingindustryindicatesGVAgrowthof0.6%andanemploymentdeclineof0.7%.The‘EconomicIndicators’portraysthefollowing:

Table 17: SA Manufacturing Economic Sectors - Gross Value Added and Employment South Africa Gross Value Added Per Sub-Sector (GVA) Employment Per Sub-Sector (Jobs)Manufacturing GVA - Rm GVA - Rm % of Total % ∆ p.a. Jobs Jobs % of Total % ∆ p.a.Sub-Sector 2008 2018 2018 2008 - 2018 2008 2018 2018 2008 - 2018Food, beverages 77,647 85,930 22.2% 1.1% 218,588 246,866 20.3% 1.3%Textiles, clothing 11,151 11,054 2.9% -0.1% 125,067 85,187 7.0% -3.2%Wood & Paper 32,014 30,996 8.0% -0.3% 136,442 133,240 11.0% -0.2%Fuel, petrol, chemical 82,824 91,614 23.7% 1.1% 159,833 173,424 14.3% 0.9%Other non-metallic 19,529 16,467 4.3% -1.6% 77,239 60,713 5.0% -2.1%Metal products, machinery 84,403 74,460 19.2% -1.2% 308,209 275,209 22.7% -1.1%Electrical machinery 8,570 8,992 2.3% 0.5% 40,568 39,895 3.3% -0.2%Electronic, sound 4,856 5,902 1.5% 2.2% 16,624 19,545 1.6% 1.8%Transport equipment 28,792 30,780 8.0% 0.7% 120,523 108,836 9.0% -1.0%Furniture and other 29,178 30,687 7.9% 0.5% 93,935 71,224 5.9% -2.4%Total GVA / Jobs 378,963 386,883 100.0% 0.2% 1,297,028 1,214,139 100.0% -0.6%Total Agro-Proc. GVA / Jobs 149,990 158,668 41.0% 0.6% 574,032 536,517 44.2% -0.7%Source: Rand International Capital interpretation of Quantec Data, 2019.Note: The Agro proceesing sector is comprised of: Food & beverages; Textiles & clothing; Wood and paper; and Furniture and Other.Note: The GVA figures are in constant 2010 prices in Rand mill ion, Quantec Data, 2019 data. Employment data is for Formal employment only.



Economic indicators of relevance are interpreted as follow:

• Overallthemanufacturingsector’sGVAgrewby0.2%p.a.,andemploymentdecreasedby0.6%p.a.• ThecombinedmanufacturingsectorGVAofR386.88billionrealisesanoutputorturnoverofR1.53trillionatafactor

of3.86timesGVA,significantlyhigherthantheaverageforthegeneraleconomy(2.18times).• Theagro-processingindustryGVAofR158.66billionrealisesanoutputorturnoverofR564.83billionatafactorof

3.56timesGVA.• Overalltheagro-processingindustrygrewby0.6%perannum,withemploymentdecreasingby0.7%p.a.aswell,

indicatingthephenomenaknownas‘JoblessGrowth’.• FoodandBeveragesindicatesGVAgrowthof1.1%p.a,andpositiveemploymentgrowth,at1.3%p.a.• TextilesandhasnegativeGVAgrowthof0.1%p.a,andanemploymentdeclineof3.2%p.a.• WoodandPaperhadnegativegrowthof0.3%p.a,withemploymentdeclineof0.2%p.a.• FuelandPetrolisagrowthindustryof1.1%p.a.,withemploymentalsoupwardat0.9%p.a.• ElectronicandSoundEquipmentisthesingleindustryafterFoodandBeverageswhichindicatedapositiveGVA

growthat2.2%p.a.,alsothehighestGVAgrowth,andanincreaseinemploymentat1.8%p.a.• Furnitureandotherhad0.5%GVAgrowthp,a,butadeclineinemploymentof2.4%p.a.• SApolicyhasbeenseekingtopromoteindustrialisationbystimulatingthemanufacturingsectorthroughanumberof

policyinitiativessuchasDTIincentives,IDZs,SEZs,exportpromotionandanumberofgrantsandsubsidies.

The relationship between GVA and employment is indicated graphically in the figure below:

Figure 4: SA Manufacturing Economic Sectors – GVA & Employment Growth Rates

Source: Rand International Capital interpretation of Quantec Data, 2019.



5.2.3 The South African Ocean Economy in Context & Looking Forward

ThevariousstudiesreferredtoaboveadequatelydemonstratethattheOceanEconomyisasignificantstrategicandeconomicassettoanycountry.

InastudyundertakenbyHoskingin2017theOceanEconomyhasbeenprofiledbyitscontributiontoGrossDomesticProductinthevariouseconomicsectorsandsub-sectorswithanoveralleconomicinfluencebeingestablishedacrossthesectors.Thetotalinfluencein2015wasestimatedtobeR128billionor4.4percentofthetotaleconomyofR2,947billionin2010terms.TheHoskingmetricshavebeenappliedtotheDerekZimmermanmacro-economicforecastingmodelinordertodeterminetheOceanEconomypotentiallookingforward.

Themethodologyandescalationfactorsusedpereconomicsectorareprovidedinappendix12.3hereafter,withtheestimationsusedfortheeconomicforecastasfollows:

Table 18: South African GDP Past Profile – Informing Forecast Rate Per Annum

Source: This reports author’s interpretation of the sectoral economic data provided by Quantec Data.

TheNationalTreasurymacroeconomicdataandprojectionshavebeenreadinthecontextoftheStandardIndustrialClassification(SIC)sectorsperformanceandtrendsoverthepastfiveyears,andaseriesofmetricsforforwardprojectionsofthesesectorsformulated.

Actual Year 1-5 Year 6-10 Year 11-15 Year 16-20Real Gross Value Added (GVA) at basic prices, R millions, constant 2010 prices. 2013 - 2018 2019 - 2023 2024 - 2028 2029 - 2033 2034 - 2038South Africa GVA in R millions, Constant 2010 Prices % % ∆ p.a. % ∆ p.a. % ∆ p.a. % ∆ p.a. % ∆ p.a.

Total - Economic Sectors 100% 0.92% 1.00% 1.20% 1.50% 2.00%A gric ulture, fores try and fis hing 2.6% 0.85% 1.25% 1.25% 1.50% 2.00%M ining and quarry ing 8.1% -0.02% 0.00% 0.50% 1.00% 1.75%M anufac turing 13.5% 0.30% 0.75% 1.00% 1.00% 1.50%E lec tric ity , gas and water 2.3% -0.69% 0.75% 1.00% 1.00% 1.75%Cons truc t ion 3.8% 0.94% 0.50% 0.75% 1.00% 2.00%W holes ale and retail t rade, c atering and ac c om m odation 15.1% 1.11% 1.00% 1.00% 1.50% 2.00%Trans port , s torage and c om m unic at ion 9.6% 1.84% 1.50% 1.75% 2.00% 2.50%F inanc e, ins uranc e, real es tate and bus ines s s ervic es 22.4% 2.21% 2.25% 2.50% 3.00% 3.00%G eneral governm ent 16.7% 1.26% 1.00% 1.00% 1.50% 1.50%Com m unity , s oc ial and pers onal s ervic es 6.0% 1.38% 1.00% 1.25% 1.50% 2.00%

Regional Output and GVA at Basic Prices by Industry



Table 19: Ocean Economy in the Context of the SA Major Economic Sectors - GDP

ItisevidentthattheOceanEconomyGDPisanticipatedtogrowfromthecurrentR128billion(2018)toR207billionintwentyyears’time(2038),anincreaseofR79billionor61.7percentintotal,oranaverageof3.13percentperannum.

GDP (R m, Constant 2010 Prices) Year 0 Year 6 Year 10 Year 15 Year 20Sectors for Ocean Economy:- 2018 2024 2028 2033 2038

SA Total Economy [Rm] 2,859,599 3,181,255 3,463,015 3,807,275 4,367,467 P rim ary S ec tor 304,671 324,535 340,814 361,454 393,187 S ec ondary S ec tor 560,480 615,337 664,824 721,462 812,277 Tert iary S ec tor 1,994,448 2,241,383 2,457,377 2,724,359 3,162,003 - A v erage Grow th Per A nnum - % : 1.9% 2.2% 2.0% 2.9%

SA Total Economy [GDP %] 100.0% 100.0% 100.0% 100.0% 100.0%P rim ary S ec tor [% ] 10.7% 10.2% 9.8% 9.5% 9.0%S ec ondary S ec tor [% ] 19.6% 19.3% 19.2% 18.9% 18.6%Tert iary S ec tor [% ] 69.7% 70.5% 71.0% 71.6% 72.4%

SA Total Ocean Economy [Rm] 127,784 144,783 159,708 178,326 207,971 P rim ary S ec tor 8,368 9,138 9,752 10,563 11,668 S ec ondary S ec tor 18,754 20,951 22,928 25,268 29,304 Tert iary S ec tor 100,663 114,694 127,028 142,496 167,000 - Oc ean Ec onomy as a % of Tota l Ec onomy 4.5% 4.6% 4.6% 4.7% 4.8%

SA Total Ocean Economy [GDP %] 100.0% 100.0% 100.0% 100.0% 100.0%P rim ary S ec tor [% ] 6.5% 6.3% 6.1% 5.9% 5.6%S ec ondary S ec tor [% ] 14.7% 14.5% 14.4% 14.2% 14.1%Tert iary S ec tor [% ] 78.8% 79.2% 79.5% 79.9% 80.3%Source: Hos k ing, 2017 and Zim m erm an ex trapolat ion for the y ears ahead bas ed on the Hos k ing m etric s for the 'O c ean E c onom y '.



The Ocean Economy GDP according to the internationally recognised Standard Industrial Classification (SIC) for economic sectors is calculated as follows:

Table 20: SA Ocean Economy – GDP for the Standard Industrial Classification (SIC)

ThisdatahasbeenallocatedtotheOperationPhakisaframeworkasdeterminedbythevariouslaboratoriesin2014,withthe‘DirectGDP’beingthatnationalratioofOperationPhakisaGDPthatcouldbeaccountedfor,withthebalancebeingthe‘UnaccountedforGDP’whichisrequiredinordertomakeupthebalanceintermsoftheStandardIndustrialClassification(SIC)tables,andbasedupontheHoskingmethodologywhichhasbeenadoptedforthiseconomicmodel.

Ocean GDP (R m, Constant 2010 Prices) Year 0 Year 6 Year 10 Year 15 Year 20Economic Sectors:- 2018 2024 2028 2033 2038

1 A gric ulture, F ores try and F is hing 3,708 4,327 4,805 5,465 6,244 2 M ining and Q uarry ing 4,660 4,811 4,947 5,097 5,424 3 M anufac turing [28 S ub-S ec tors ] 7,823 8,596 9,305 10,093 11,308 4 E lec tric ity , G as and W ater 164 170 175 180 187 5 Cons truc t ion & E ngineering 10,767 12,184 13,449 14,995 17,809 6 W holes ale & Retail Trade, Catering & A c c om . 11,683 12,837 13,895 15,117 17,524 7 Trans port , S torage and Com m unic at ion 12,719 14,394 15,888 17,714 21,038 8 F inanc e, Ins uranc e, Real es tate & B us . S er. 55,919 65,165 73,343 83,791 99,517 9 G overnm ent 18,990 20,815 22,311 24,154 26,996

10 Com m unity , S oc ial & P ers onal S ervic es 1,353 1,483 1,590 1,721 1,923 Total Gross Domestic Product (GDP) 127,784 144,783 159,708 178,326 207,971 - Ave ra g e P e rce n ta g e C h a n g e Ye a r On Ye a r 2 .4 7 % 2 .4 9 % 2 .9 3 % 3 .1 3 %Source: Derek Zim m erm an and Nels on M andela Univers ity (NM U), bas ed upon Q uantec Data, 2019, and S tephen Hos k ing defin it ion of the 'O c ean E c onom y ', 2017.



Table 21: South African Ocean Economy – GDP – Operation Phakisa Sectors

ThesamesetofeconomicdataandmetricsasformulatedbytheHoskingstudyhasbeenappliedtothenationalem-ploymentprofileandhasresultedinthefollowinghighlevelOceanEconomyprofileinthecontextoftheSouthAfricanemploymentprofileforthemajoreconomicsectors.

National GDP - Direct Year 0 Year 6 Year 10 Year 15 Year 20Sectors for Ocean Economy:- 2018 2024 2028 2033 2038

Total Economy GDP - Rand Million 2,859,599 3,181,255 3,463,015 3,807,275 4,367,467


2 Touris m 11,683 12,837 13,895 15,117 17,524 3 O ffs hore O il & G as 4,660 4,811 4,947 5,097 5,424 4 Cons truc t ion 10,767 12,184 13,449 14,995 17,809 5 Renewable E nergy 164 2,920 5,175 10,180 15,187 6 F is heries and A quac ulture 3,708 4,327 4,805 5,465 6,244 7 Com m unic at ion 3,917 4,433 4,893 5,456 6,480 8 Des alinat ion 500 7,000 10,000 13,000 16,000 9 O ther 'O c ean E c onom y ' 4,000 6,500 10,000 20,000 30,000

Operation Phakisa - Direct GDP: 56,023 73,570 87,464 111,661 140,534 Operation Phakisa - Indirect & Other: 71,761 71,213 72,244 66,666 67,437 Ocean Economy - Total GDP (SIC): 127,784 144,783 159,708 178,326 207,971 - % of Total G DP in S A : 4.5% 4.6% 4.6% 4.7% 4.8%




Table 22: Ocean Economy in the Context of the SA Major Economic Sectors - Jobs

ItcanbeseenthattheOceanEconomyemploymentor‘Jobs’isanticipatedtogrowfromthecurrent518,408(2018)to833,549intwentyyears’time(2038),anincreaseof315,141or60.79percentintotal,oranaverageof3.04percentperannum.

TheOperationPhakisafigureswouldseejobsgrowfrom316,000to1,000,000whichwouldbegrowthof684,000jobsover23years,or216.46percentintotal,or9.41percentperannum.Itissubmittedthattheseareoverlyambitioustargets.ItisalsosubmittedthattheinitialestimateofOceanEconomyjobsin2010at316,000istoolow,andtheseshouldhavebeencalculatedtobecloserto400,000jobsin2010baseduponStephenHosking’smetricsandmethodology.

National Employment - FTE - Jobs Year 0 Year 6 Year 10 Year 15 Year 20Sectors for Ocean Economy:- 2018 2024 2028 2033 2038

SA Total Economy [Jobs] 12,223,391 13,728,772 14,894,394 16,649,922 18,514,407 P rim ary S ec tor 1,299,421 1,404,781 1,491,803 1,627,043 1,751,600 S ec ondary S ec tor 1,910,170 2,144,199 2,359,395 2,730,664 3,054,560 Tert iary S ec tor 9,013,800 10,179,791 11,043,196 12,292,215 13,708,247 - A v erage Grow th Per A nnum - % : 2.0% 2.1% 2.4% 2.2%

SA Total Economy [Jobs %] 100.0% 100.0% 100.0% 100.0% 100.0%P rim ary S ec tor [% ] 10.6% 10.2% 10.0% 9.8% 9.5%S ec ondary S ec tor [% ] 15.6% 15.6% 15.8% 16.4% 16.5%Tert iary S ec tor [% ] 73.7% 74.1% 74.1% 73.8% 74.0%

SA Total Ocean Economy [Jobs] 518,408 594,120 651,083 737,081 833,549 P rim ary S ec tor 51,390 56,413 60,481 66,701 72,627 S ec ondary S ec tor 88,121 104,685 119,603 145,062 169,698 Tert iary S ec tor 378,897 433,023 470,998 525,319 591,224 - Oc ean Ec onomy as a % of Tota l Ec onomy 4.2% 4.3% 4.4% 4.4% 4.5%

SA Total Ocean Economy [Jobs %] 100.0% 100.0% 100.0% 100.0% 100.0%P rim ary S ec tor [% ] 9.9% 9.5% 9.3% 9.0% 8.7%S ec ondary S ec tor [% ] 17.0% 17.6% 18.4% 19.7% 20.4%Tert iary S ec tor [% ] 73.1% 72.9% 72.3% 71.3% 70.9%Source: Hos k ing, 2017 and Zim m erm an ex trapolat ion for the y ears ahead bas ed on the Hos k ing m etric s for 'O c ean E c onom y '.



The detail for the Employment within the economic sectors according to the internationally recognised Standard Industrial Classification (SIC) economic sectors is as follows:

Table 23: SA Ocean Economy – Employment - Standard Industrial Classification (SIC)

Ocean National Employment - FTE Year 0 Year 6 Year 10 Year 15 Year 20Economic Sectors:- 2018 2024 2028 2033 2038

1 A gric ulture, F ores try and F is hing 42,211 47,072 50,952 56,809 62,536 2 M ining and Q uarry ing 9,179 9,341 9,529 9,892 10,091 3 M anufac turing [28 S ub-S ec tors ] 24,550 26,190 27,797 30,690 32,575 4 E lec tric ity , G as and W ater 154 164 170 177 185 5 Cons truc t ion & E ngineering 63,415 78,330 91,635 114,193 136,936 6 W holes ale & Retail Trade, Catering & A c c om . 59,934 70,700 79,574 93,373 107,718 7 Trans port , S torage and Com m unic at ion 22,471 23,972 25,443 27,748 29,452 8 F inanc e, Ins uranc e, Real es tate & B us . S er. 202,780 240,955 265,969 300,919 347,155 9 G overnm ent 77,525 79,167 80,282 81,493 82,847

10 Com m unity , S oc ial & P ers onal S ervic es 16,186 18,229 19,731 21,785 24,052 Total Employment in the Ocean Economy 518,406 594,119 651,081 737,079 833,547 - Ave ra g e P e rce n ta g e C h a n g e Ye a r On Ye a r 2 .2 9 % 2 .3 3 % 2 .5 4 % 2 .6 5 %Source: Derek Zim m erm an and Nels on M andela Univers ity (NM U), bas ed upon Q uantec Data, 2019, and S tephen Hos k ing defin it ion of the 'O c ean E c onom y ', 2017.



5.3 THE OCEAN ECONOMY IN THE CONTEXT OF THE EASTERN CAPE ECONOMY.

5.3.1 The Eastern Cape Economy

InordertogainanoverviewofthedynamicsoftheEasternCapeeconomy,ahigh-levelanalysisofthemajoreconomicsectorsandtheirgrowthordeclineoverthepasttenyearshasbeenundertaken.Thesameanalysishasbeencarriedoutforemployment.GrossValueAdded(GVA)andEmploymentpersectorarethemajorindicatorsanalysed.GVAisnettoftaxesandsubsidiesandisusedasaproxyforGrossDomesticProduct(GDP)inthenationalcontextandinordertobeabletorelatenationalaccountstoprovincialaccounts.

A‘DecadeofEconomicIndicators’portraysthefollowing:

Table 24: Eastern Cape Major Economic Sectors - Gross Value Added and Employment

Eastern Cape Gross Value Added Per Sector (GVA) Employment Per Sector (Jobs)Economic GVA - Rm GVA - Rm % of Total % ∆ p.a. Jobs Jobs % of Total % ∆ p.a.Sector 2008 2018 2018 2008 - 2018 2008 2018 2018 2008 - 2018Agriculture & Fishing 3,125 3,454 1.6% 1.1% 67,593 73,883 8.1% 0.9%Mining 598 638 0.3% 0.7% 2,207 1,723 0.2% -2.2%Manufacturing 28,198 29,121 13.6% 0.3% 92,337 78,744 8.7% -1.5%Electricity, Gas & Water 2,574 2,500 1.2% -0.3% 2,848 3,191 0.4% 1.2%Construction 6,843 8,190 3.8% 2.0% 33,265 43,257 4.8% 3.0%Trade & Accommodation 36,654 41,870 19.5% 1.4% 128,320 164,946 18.2% 2.9%Transport & Coms. 16,272 19,083 8.9% 1.7% 21,588 27,436 3.0% 2.7%Finance & Business 37,589 44,204 20.6% 1.8% 105,052 121,394 13.4% 1.6%General Govt. 42,738 49,148 22.9% 1.5% 187,354 208,785 23.0% 1.1%Community, Social & Pers 14,477 16,175 7.5% 1.2% 155,291 183,653 20.2% 1.8%

Total GGP 189,068 214,383 100% 1.3% 795,855 907,012 100% 1.4%Source: Rand International Capital interpretation of Quantec Data, 2019.

Note: The GVA figures are in constant 2010 prices in Rand mill ion, Quantec Data, 2019 data. Employment data is for Formal employment only.



Economic items of relevance for the Eastern Cape are as follow:

• Overalltheeconomy,asmeasuredbyGVA,grewby1.3%p.a.,andemploymentby1.4%p.a.• TheGVAofR214billionrealisesanoutputorturnoverofR462billionatafactorof2.16timesGVA.• Agriculture,ForestryandFishing’sGVAincreasedby1.1%p.a.,andemploymentgrew0.9%.• Manufacturinghasgrownslightly,butthishasbeen‘JoblessGrowth’ata1.5%declineinemployment.• Trade,whichincludestourism,GVAhasgrownby1.4%p.a.,andemploymentby2.9%.• ConstructionGVAandemploymenthasgrownsignificantlyby2.0%and3.0%respectively.• ThetertiarysectorsofGeneralGovernmentandServices,andCommunityandSocialServiceshavebothseenpositive

economicgrowth,withemploymentgrowthat1.1%and1.8%respectively.• Generallytheprimarysectorsarestaticorinlowgrowthandsheddingjobs,withthetertiarysectorsascendingfaster

andcreatingemploymentopportunities.

The relationship between GVA and employment for the primary economic sectors is indicated graphically in the figure below, with the low growth trajectory clearly indicated:

Figure 5:Eastern Cape Major Economic Sectors – GVA & Employment Growth Rates




5.3.2 Economic and Employment Growth – Manufacturing Sectors

Asimilaranalysisofa‘DecadeofData’hasbeenundertakenfortheManufacturingsectoranditssub-sectors.ThissectorhasunderperformedthegeneraleconomyandhasrecordedaGVAgrowthrateof0.3%overthesameperiodwithasignif-icantdeclineinemploymentofanaggregate1.5%.Thecombinedagro-processingindustryindicatesGVAgrowthof1.3%andanemploymentdeclineof1.0%.The‘EconomicIndicators’portraysthefollowing:

Table 25: EC Manufacturing Economic Sectors - Gross Value Added and Employment

Eastern Cape Gross Value Added Per Sub-Sector (GVA) Employment Per Sub-Sector (Jobs)Manufacturing GVA - Rm GVA - Rm % of Total % ∆ p.a. Jobs Jobs % of Total % ∆ p.a.Sub-Sector 2008 2018 2018 2008 - 2018 2008 2018 2018 2008 - 2018Food, beverages 6,037 7,291 25.0% 2.1% 15,040 16,552 21.0% 1.0%Textiles, clothing 994 920 3.2% -0.7% 9,013 5,488 7.0% -3.9%Wood & Paper 1,779 1,981 6.8% 1.1% 6,739 6,750 8.6% 0.0%Fuel, petrol, chemical 5,122 4,936 16.9% -0.4% 9,820 9,417 12.0% -0.4%Other non-metallic 1,582 1,374 4.7% -1.3% 4,950 3,640 4.6% -2.6%Metal products, machinery 3,315 3,380 11.6% 0.2% 12,848 11,182 14.2% -1.3%Electrical machinery 974 802 2.8% -1.8% 4,088 2,657 3.4% -3.5%Electronic, sound 240 257 0.9% 0.7% 761 761 1.0% 0.0%Transport equipment 6,168 6,157 21.1% 0.0% 23,981 18,851 23.9% -2.1%Furniture and other 1,987 2,024 6.9% 0.2% 5,097 3,446 4.4% -3.2%

Total GVA / Jobs 28,198 29,121 100.0% 0.3% 92,337 78,744 100.0% -1.5%Total Agro-Proc. GVA / Jobs 10,797 12,215 41.9% 1.3% 35,889 32,236 40.9% -1.0%Source: Rand International Capital interpretation of Quantec Data, 2019.

Note: The Agro proceesing sector is comprised of: Food & beverages; Textiles & clothing; Wood and paper; and Furniture and Other.

Note: The GVA figures are in constant 2010 prices in Rand mill ion, Quantec Data, 2019 data. Employment data is for Formal employment only.



Economic items of relevance are as follow:

• Overallthemanufacturingsector’sGVAgrewby0.3%p.a.,andemploymentdecreased1.5%perannum.• ThecombinedmanufacturingsectorGVAofR29.1billionrealisesanoutputorturnoverofR108.0billionatafactorof

3.71timesGVA,significantlyhigherthantheaverageforthegeneraleconomy(2.16times).• Theagro-processingindustryGVAofR12.22billionrealisesanoutputorturnoverofR41.16billionatafactorof3.37

timesGVA.• Overalltheagro-processingindustrygrewby1.3%perannum,withemploymentdecreasingby1.0%p.a.aswell,indi-

catingthephenomenaknownas‘JoblessGrowth’.• FoodandBeveragesindicatesGVAgrowthof2.1%perannum,andpositiveemploymentgrowth,at1.0%perannum.• TextilesandhasnegativeGVAgrowthof0.7%perannum,andalargeemploymentdeclineof3.9%p.a.• WoodandPaperhadpositivegrowthof1.1%perannum,withemploymentstatic.• ElectricalmachineryhadalargedeclineinGVAof1.8%perannum,andanemploymentdecreaseof3.5%perannum.• FurnitureGVAhasbeenessentiallystatic,witharelativelylargeemploymentdeclinedof3.2%perannum.

The relationship between GVA and employment is indicated graphically in the figure below:

Figure 6: EC Manufacturing Economic Sectors – GVA & Employment Growth Rates


Itiscleartoseethatthetrendoverthepastdecadehasbeenmostlynegative,withonlyFoodandBeveragesindicatingapositiveemploymentandGrossValueAddedtrend.



5.3.3 The Eastern Cape Ocean Economy in Context & Looking Forward

ThevariousstudiesreferredtoaboveadequatelydemonstratethattheOceanEconomyisasignificantstrategicandeconomicassettoanycountry.

InthestudyundertakenbyHoskingin2017theSouthAfricannationalOceanEconomyhasbeenprofiledbyitscontri-butiontoGrossDomesticProductinthevariouseconomicsectorsandsub-sectorswithanoveralleconomicinfluencebeingestablishedacrossthesectors.TheHoskingmetricshavebeenappliedtothenationalandEasternCapeprovincialmacro-economicforecastingmodelinordertodeterminetheOceanEconomypotentiallookingforward.NodistinctionhasbeenmadeatthisjuncturetodistinguishthenationalfromtheprovincialOceanEconomy,withitbeingassumedthatthemetricsandratiosremainthesame.

TheEasternCapeeconomyandsocio-demographicprofileasat2018isanalysedinsomedetailinsection13.1hereafterandananalysisofthepastdecadeofeconomicperformancehasbeenundertakeninsection5.2above.Togetherthesetwosetsofeconomicdataprovideausefulinsightintothecurrentsituationandthetrendsupto2018.

Table 26: Eastern Cape GDP Past Profile – Informing Forecast Rate Per Annum


Thesameexercisehasbeenundertakenwiththeemploymentprofilesoverthepastfiveyears,withthemajorsectoraltrendsestablishedandthenforecastmetricsestablishedbaseduponthesetrendsinthecontextofcurrentsentimentandpolicyinitiatives.

Actual Year 1-5 Year 6-10 Year 11-15 Year 16-20Real Gross Value Added (GVA) at basic prices, R millions, constant 2010 prices. 2013 - 2018 2019 - 2023 2024 - 2028 2029 - 2033 2034 - 2038Eastern Cape GVA in R millions, Constant 2010 Prices % % ∆ p.a. % ∆ p.a. % ∆ p.a. % ∆ p.a. % ∆ p.a.

Total - Economic Sectors 7.5% 0.87% 0.85% 1.13% 1.63% 2.00%A gric ulture, fores try and fis hing 1.6% -1.56% 0.00% 0.50% 1.00% 1.50%M ining and quarry ing 0.3% -0.26% 0.00% 0.30% 0.50% 0.75%M anufac turing 13.6% 0.10% 0.50% 0.75% 1.25% 1.50%E lec tric ity , gas and water 1.2% -0.49% 0.00% 0.50% 1.00% 1.25%Cons truc t ion 3.8% 0.39% 1.00% 1.50% 2.00% 2.50%W holes ale and retail t rade, c atering and ac c om m odation 19.5% 0.58% 1.00% 1.50% 2.00% 2.50%Trans port , s torage and c om m unic at ion 8.9% 1.57% 2.00% 2.00% 2.50% 3.00%F inanc e, ins uranc e, real es tate and bus ines s s ervic es 20.6% 1.58% 2.00% 2.00% 3.00% 3.00%G eneral governm ent 22.9% 1.10% 1.00% 1.00% 1.50% 2.00%Com m unity , s oc ial and pers onal s ervic es 7.5% 0.87% 1.00% 1.20% 1.50% 2.00%



These growth assumptions have been applied to the Eastern Cape economic baseline as at 2018 and based upon information supplied by Quantec Data, with the twenty-year projections producing the following high-level results:

Table 27: Ocean Economy in the Context of the EC Major Economic Sectors - GDP

Thetrendsindicatesthatthemajorityoftheoceaneconomysectoractivitytakesplaceinthetertiarysectorsat83.5%,beingtheaveragecontributionovertwentyyears.

Thistertiarysectorweightingisapparentfromthetablebelowandthelargestsinglesectorisfinance,insuranceandrealestateat45.2%ofthetotal.

GDP (R m, Constant 2010 Prices) Year 0 Year 6 Year 10 Year 15 Year 20Sectors for Ocean Economy:- 2018 2024 2028 2033 2038

Provincial Total Economy [Rm] 214,384 231,385 246,108 263,827 298,702 P rim ary S ec tor 4,092 4,207 4,317 4,430 4,729 S ec ondary S ec tor 39,812 42,195 44,410 46,902 52,839 Tert iary S ec tor 170,480 184,984 197,380 212,495 241,134 - Ave ra g e Gro w th P e r An n u m - % : 1 .3 % 1 .6 % 1 .4 % 2 .6 %

Provincial Total Economy [GDP %] 100.0% 100.0% 100.0% 100.0% 100.0%P rim ary S ec tor [% ] 1.9% 1.8% 1.8% 1.7% 1.6%S ec ondary S ec tor [% ] 18.6% 18.2% 18.0% 17.8% 17.7%Tert iary S ec tor [% ] 79.5% 79.9% 80.2% 80.5% 80.7%

Provincial Total Ocean Economy [Rm] 9,559 10,488 11,302 12,285 14,129 P rim ary S ec tor 186 191 197 202 217 S ec ondary S ec tor 1,414 1,539 1,659 1,791 2,064 Tert iary S ec tor 7,960 8,757 9,446 10,291 11,849 - Oce a n E co n o m y a s a % o f To ta l E co n o m y 4 .5 % 4 .5 % 4 .6 % 4 .7 % 4 .7 %

Provincial Total Ocean Economy [GDP %] 100.0% 100.0% 100.0% 100.0% 100.0%P rim ary S ec tor [% ] 1.9% 1.8% 1.7% 1.6% 1.5%S ec ondary S ec tor [% ] 14.8% 14.7% 14.7% 14.6% 14.6%Tert iary S ec tor [% ] 83.3% 83.5% 83.6% 83.8% 83.9%Source: Hos k ing, 2017 and Zim m erm an ex trapolat ion for the y ears ahead bas ed on the Hos k ing m etric s for the 'O c ean E c onom y '.



Thenextlargestsectoristhatofgovernmentat17.8%.

ThedetailfortheGDPoftheeconomicsectorsaccordingtotheinternationallyrecognisedStandardIndustrialClassification(SIC)foreconomicsectorsisasfollows:

Table 28: Eastern Cape Ocean Economy – GDP for the SIC

Finance,insuranceandrealestateisthesectorwiththelargestcontributiontotheEasternCapeOceanEconomyatR6.4billionin2038or45.2percent.GovernmentisthenextlargestsectoratR2.5billionin2038,or17.8percent.

ThisdatahasbeenallocatedtotheOperationPhakisaframeworkasdeterminedbythevariouslaboratoriesin2014,withthe‘DirectGDP’beingthatnationalratioofOperationPhakisaGDPthatcouldbeaccountedfor,withthebalancebeingthe‘UnaccountedforGDP’whichisrequiredinordertomakeupthebalanceintermsoftheStandardIndustrialClassification(SIC)tables,andbasedupontheHoskingmethodologywhichhasbeenadoptedforthiseconomicmodel.

Ocean GDP (R m, Constant 2010 Prices) Year 0 Year 6 Year 10 Year 15 Year 20Provincial Economic Sectors:- 2018 2024 2028 2033 2038

1 A gric ulture, F ores try and F is hing 173 178 184 189 204 2 M ining and Q uarry ing 13 13 13 13 13 3 M anufac turing [28 S ub-S ec tors ] 589 617 642 672 751 4 E lec tric ity , G as and W ater 6 6 6 6 7 5 Cons truc t ion & E ngineering 819 916 1,011 1,113 1,306 6 W holes ale & Retail Trade, Catering & A c c om . 1,133 1,209 1,283 1,362 1,541 7 Trans port , S torage and Com m unic at ion 888 974 1,044 1,127 1,245 8 F inanc e, Ins uranc e, Real es tate & B us . S er. 3,860 4,368 4,822 5,376 6,385 9 G overnm ent 1,950 2,070 2,154 2,275 2,512

10 Com m unity , S oc ial & P ers onal S ervic es 128 136 143 151 167 Total Gross Domestic Product (GDP) 9,559 10,488 11,302 12,285 14,129 - Ave ra g e P e rce n ta g e C h a n g e Ye a r On Ye a r 1 .8 8 % 1 .8 9 % 2 .3 3 % 2 .8 5 %Source: Derek Zim m erm an and Nels on M andela Univers ity (NM U), bas ed upon Q uantec Data, 2019, and S tephen Hos k ing defin it ion of the 'O c ean E c onom y ', 2017.



Table 29: Eastern Cape Ocean Economy – GDP – Operation Phakisa Sectors

MarinetransportandmanufacturingisthelargestsectorintheEasternCapeOceanEconomyatR1.6billion,andwithanaverageannualgrowthrateof1.62percent.OceanbasedtourismisthenextlargestsectoratR1.5billionin2038withanannualgrowthrateof1.73percent.

ThesamesetofeconomicdataandmetricsasformulatedbytheHoskingstudyhasbeenappliedtotheprovincialemploymentprofileandhasresultedinthefollowinghighlevelOceanEconomyprofileinthecontextoftheSouthAfricanemploymentprofileforthemajoreconomicsectors.

Provincial GDP - Direct Year 0 Year 6 Year 10 Year 15 Year 20Sectors for Ocean Economy:- 2018 2024 2028 2033 2038

Total Economy GDP - Rand Million 214,384 231,385 246,108 263,827 298,702

1 M arine Trans port and M anufac turing 1,204 1,291 1,365 1,452 1,612 - M arine Trans port 615 674 722 780 861 - M arine M anufac turing 589 617 642 672 751

2 Touris m 1,133 1,209 1,283 1,362 1,541 3 O ffs hore O il & G as 13 13 13 13 13 4 Cons truc t ion 819 916 1,011 1,113 1,306 5 Renewable E nergy 6 6 6 6 7 6 F is heries and A quac ulture 173 178 184 189 204 7 Com m unic at ion 274 300 321 347 383 8 Des alinat ion 38 525 750 975 1,200 9 O ther 'O c ean E c onom y ' - - - - -

Operation Phakisa - Direct GDP: 3,659 4,438 4,933 5,458 6,266 Operation Phakisa - Indirect & Other: 5,901 6,050 6,369 6,827 7,863 Operation Phakisa - Total GDP: 9,559 10,488 11,302 12,285 14,129 - % of Total G DP in S A : 4.5% 4.5% 4.6% 4.7% 4.7%




Table 30: Ocean Economy in the Context of the EC Major Economic Sectors - Jobs

Thisdataclearlyindicatesthatthetertiarysectorat73percentisthemajorcontributorinitially,withaslightdeclineto70percentoverthetwentyyearforecast.Thesecondarysectorindicatesstronggrowthfrom16.6percentin2018to20.2percentoverthetwentyyearforecast.

Provincial Employment - FTE - Jobs Year 0 Year 6 Year 10 Year 15 Year 20Sectors for Ocean Economy:- 2018 2024 2028 2033 2038

SA Total Economy [Jobs] 907,012 1,031,341 1,136,043 1,300,130 1,477,608 P rim ary S ec tor 75,606 85,344 94,059 108,826 121,133 S ec ondary S ec tor 125,192 140,096 154,724 177,947 200,538 Tert iary S ec tor 706,214 805,901 887,261 1,013,358 1,155,937 - A v erage Grow th Per A nnum - % : 2.3% 2.6% 2.9% 2.7%

SA Total Economy [Jobs %] 100.0% 100.0% 100.0% 100.0% 100.0%P rim ary S ec tor [% ] 8.3% 8.3% 8.3% 8.4% 8.2%S ec ondary S ec tor [% ] 13.8% 13.6% 13.6% 13.7% 13.6%Tert iary S ec tor [% ] 77.9% 78.1% 78.1% 77.9% 78.2%

SA Total Ocean Economy [Jobs] 35,731 41,145 45,894 53,418 61,133 P rim ary S ec tor 3,724 4,210 4,644 5,379 5,993 S ec ondary S ec tor 5,926 7,180 8,421 10,364 12,377 Tert iary S ec tor 26,081 29,756 32,829 37,675 42,763 - Oc ean Ec onomy as a % of Tota l Ec onomy 3.9% 4.0% 4.0% 4.1% 4.1%

SA Total Ocean Economy [Jobs %] 100.0% 100.0% 100.0% 100.0% 100.0%P rim ary S ec tor [% ] 10.4% 10.2% 10.1% 10.1% 9.8%S ec ondary S ec tor [% ] 16.6% 17.4% 18.3% 19.4% 20.2%Tert iary S ec tor [% ] 73.0% 72.3% 71.5% 70.5% 70.0%Source: Hos k ing, 2017 and RIC ex trapolat ion for the y ears ahead bas ed on the Hos k ing m etric s for 'O c ean E c onom y '.



The detail for the Employment within the economic sectors according to the internationally recognised Standard Industrial Classification (SIC) economic sectors is as follows:

Table 31: Eastern Cape Ocean Economy – Employment for the SIC

SimilartotheGDPdata,thelargesteconomicsectorforemploymentisFinance,insuranceandrealestateat17,115em-ploymentopportunitiesat28.0percent.TheWholesale,retailandtradesectoristhenextlargestatR11.84billionor19.4percentoftheeconomy.Thissectoriswherethebulkoftourismorientatedactivityisrecorded,whichislogicalhere.

ThisdatahasbeenallocatedtotheOperationPhakisaframework,withthe‘DirectEmployment’beingthatnationalratioofOperationPhakisaEmploymentthatcouldbeaccountedfor,withthebalancebeingthe‘UnaccountedforEmployment’whichisrequiredinordertomakeupthebalanceintermsoftheStandardIndustrialClassification(SIC)tables,andbasedupontheHoskingmethodologywhichhasbeenadoptedforthiseconomicmodel.

Ocean Provincial Employment - FTE Year 0 Year 6 Year 10 Year 15 Year 20Provincial Economic Sectors:- 2018 2024 2028 2033 2038

1 A gric ulture, F ores try and F is hing 3,689 4,175 4,608 5,342 5,956 2 M ining and Q uarry ing 35 35 36 37 37 3 M anufac turing [28 S ub-S ec tors ] 1,592 1,645 1,695 1,781 1,835 4 E lec tric ity , G as and W ater 8 9 9 10 11 5 Cons truc t ion & E ngineering 4,326 5,526 6,717 8,573 10,530 6 W holes ale & Retail Trade, Catering & A c c om . 4,464 5,982 7,271 9,280 11,844 7 Trans port , S torage and Com m unic at ion 1,277 1,438 1,557 1,719 1,898 8 F inanc e, Ins uranc e, Real es tate & B us . S er. 10,600 11,996 13,242 15,351 17,115 9 G overnm ent 8,283 8,792 9,149 9,616 10,106

10 Com m unity , S oc ial & P ers onal S ervic es 1,457 1,547 1,610 1,708 1,799 Total Employment in the Ocean Economy 35,731 41,145 45,894 53,418 61,133 - Ave ra g e P e rce n ta g e C h a n g e Ye a r On Ye a r 2 .7 1 % 2 .8 0 % 3 .1 3 % 3 .2 3 %Source: Derek Zim m erm an and Nels on M andela Univers ity (NM U), bas ed upon Q uantec Data, 2019, and S tephen Hos k ing defin it ion of the 'O c ean E c onom y ', 2017.



Table 32: Eastern Cape Ocean Economy – Employment – Operation Phakisa Sectors

ThelargesteconomicsectorinthisanalysisistourismatR11.84billion,withanannualgrowthrateof7.63.Thisisfol-lowedbyconstructionatR10.53billion,withanannualgrowthrateof6.7percent.

5.4 THE OCEAN ECONOMY LOOKING FORWARDThisanalysishasprovedtobeusefulinthatithasprovidedaframeworkintermsofthetraditionalandinternationallyusedeconomicframeworkaspertheStandardIndustrialClassificationcategories,aswellasinthecontextoftheoriginalOperationPhakisaframeworkandestimates.Thedatacorrelatesinafashionthatisdeemedtobesignificantandrelevantforthepurposesofthisstudy.

BothsetsofdataforGrossDomesticProductandemploymentfortheOceanEconomyintheEasternCapesupportoneanotherinhighlightingMarineTransportandManufacturing,Oceanbasedtourism,andFinance,insuranceandrealestateasthesectorswhichindicatethestrongestgrowthwiththemostpotentialformeaningfulandsustainableeconomicgrowthfortheOceanEconomy.

Provincial Employment - Direct Jobs Year 0 Year 6 Year 10 Year 15 Year 20Sectors for Ocean Economy:- 2018 2024 2028 2033 2038

Total Economy - Jobs (FTE) 907,012 1,031,341 1,136,043 1,300,130 1,477,608

1 M arine Trans port and M anufac turing 2,476 2,640 2,772 2,971 3,149 - M arine Trans port 884 995 1,078 1,190 1,313 - M arine M anufac turing 1,592 1,645 1,695 1,781 1,835

2 Touris m 4,464 5,982 7,271 9,280 11,844 3 O ffs hore O il & G as 35 35 36 37 37 4 Cons truc t ion 4,326 5,526 6,717 8,573 10,530 5 Renewable E nergy 8 9 9 10 11 6 F is heries and A quac ulture 3,689 4,175 4,608 5,342 5,956 7 Com m unic at ion 393 443 480 529 585 8 Des alinat ion 37 325 612 900 1,187 9 A ll O ther (Non O ps . P hak .] - - - - -

Operation Phakisa - Direct Jobs 15,428 19,135 22,506 27,643 33,300 Operation Phakisa - Indirect & Other Jobs 20,303 22,011 23,388 25,775 27,833 Operation Phakisa - Total Jobs 35,731 41,145 45,894 53,418 61,133 - % of Total Jobs in S A : 3.9% 4.0% 4.0% 4.1% 4.1%




6 OPERATION PHAKISA – EASTERN CAPE PROJECTS AND POTENTIAL

6.1 SOUTH AFRICA’S OCEAN DOMAIN

TheSouthAfricancoastlinestretchesfromtheNamibianborderonthewestcoasttotheMozambiqueborderontheeastcoast.Thiscoastlineisapproximately3,000kilometreslongandtraversesfourprovincialadministrations.

South Africa exercises jurisdiction over:

• Itsinternalwaters,whichincludeallharbours;• Itsterritorialwaterswhichincludetheseawithinadistanceof12nauticalmilesfromthebaselineestablishedinterms

oftheMaritimeZonesAct15,of1994;• Itscontiguouszone,includingitsmarineculturalzonewhichincludestheseabeyondtheterritorialwatersbutwithin

adistanceof24nauticalmilesfromthebaseline;• ItsExclusiveEconomicZone(EEZ)whichincludestheseabeyondtheterritorialwatersbutwithinadistanceof200

nauticalmiles(370kilometres)fromthebaseline;• MarineProtectedAreas(MPAs)andtheirsignificanceforoceanbasedtourism;and• Itscontinentalshelfasdefinedinarticle76oftheUnitedNationsconventiononthelawofthesea.

There are many descriptions used to describe a MPAs, however, the following International Union for Conservation of Nature (IUCN) definition seems to be the most popular:

“Aclearlydefinedgeographicalspace,recognised,dedicatedandmanaged,throughlegalorothereffectivemeans,toachievethelong-termconservationofnaturewithassociatedecosystemservicesandculturalvalues”(IUCN,2019)InSouthAfricaallMPA’sareultimatelymanagedbytheSouthAfricanGovernmentwhohaveagreementswithvariousMPAManagementAuthoritieslikeSouthAfricanNationalParks(SANParks),CapeNature,EasternCapeParksandTourismAgency(ECPTA),KZNWildlife,NelsonMandelaBayMetro(NMBM)andtheCityofCapeTown(CoCT).

MostSouthAfricanMPA’sareattachedtoaNationalParkorNatureReserveandthatManagementAuthoritythenalsomanagestheattachedMPAwithfundingfromtheSAGovernmentchannelledthroughitsDepartmentofEnvironmentalAffairs(DEA)givingtheManagementAuthoritiesthemandatetomanagethedaytodayrunningoftheMPAanditsstaff.Marineprotectedareasaimtoconservemarinelifeandpromotetheconservationandeffectivemanagementofbiodiversemarineareas.Theyareanexampleofsuccessfulcollaborationbetweencivilsociety,communitiesandgovernmenttotakecareofournaturalresources,particularlyourmarineresources.(MPAForum.http://mpaforum.org.za/marine-protected-areas/Websiteaccessedon7July2019)

WithintheEEZ,stateshavetherighttoexploit,develop,manageandconserveallresourcestobefoundinthewater,ontheoceanfloorandthesubsoil,includingfish,minerals,oilandgas.

ThephysicalenvironmentofthecurrentsystemsadjacenttoSouthAfricapresentsitwithseveraleconomicopportunitiessuchasmining,fishing,shippingandtourism,collectivelycalledtheOceanEconomy.



ThenationalandglobalsignificanceofthesouthernAfricanoceaneconomyfurtherservesasafocusfornationalandinternationalscientificresearchprogrammes,whichprovidesanopportunityforSouthAfricatoincreasenationalcompetenciesinarangeofspecialisedoceanandcoastalresearchandmanagementapplications.

SouthAfricahasninecommercialports,whichhandlescargosuchasbulkminerals,break-bulkcargo,liquidcargo,agricultural,containers,automotiveandoilandgas.Theportsareconstantlyundergoinginfrastructureupgradesandconsideringandimplementingportandequipmentupgradestoretainoperatingcompetitivenessandsecurenewmarkets.Fromwesttoeastthecommercialportsare:PortNolloth,SaldanhaBay,CapeTown,MosselBay,PortElizabeth,Ngqura,EastLondon,DurbanandRichardsBay.

6.2 MARINE TRANSPORT & MANUFACTURING (MTM)

SouthAfricaisideallypositionedtoservetheabundantandincreasingeast-westcargotrafficandAfricanoffshoreoilandgasindustry,throughmarinemanufacturing,whichincludesshipandrigrepair,refurbishmentandboatbuilding.ThetownsandcitiesofCapeTown,Knysna,StFrancisandDurbanhaveestablishedcrediblesmallboatandyachtbuildingclusters,andCapeTownhasafewlargerengineeringworkswhichareengagedinsmalltomedium-sizedshipbuilding.

Marine Transport and Manufacturing Plans have been announced for unlocking economic potential and include:

• Oil&gasportinfrastructure;• Maintainingandrefurbishingexistingportandshiprepairfacilities;• Fast-trackingdecisionsonissuingoflicences;• Reformingtheporttariffstructure;• Portfacilitiesforboat,shiprepairandrigrepair;and• Establishingasupportingfundingmodelforinfrastructuredevelopmentinports.

6.2.1 The Current Status of the OP Sector - MTM

Nationally:-SouthAfricaisideallypositionedtoservetheeast-westcargotrafficandAfricanoffshoreoilandgasindustry,throughmarineengineeringandmanufacturingwhichincludesshipandrigrepair,refurbishmentandboatbuilding.

Provincially:-TheEasternCapeishometothreeoftheninemajorcommercialports,withworldclasslogisticsfacilities,dry-dockandslipwayfacilitiesandaskilledandexperiencedworkforce.1. Planstounlockeconomicpotential:- Oilandgasportinfrastructure, Maintainingandrefurbishingexistingportandshiprepairfacilities, Fasttrackingofdecisionsfortheissuingoftradinglicenses, Skillsandcapacitybuilding.2. NextSteps:- LiaisewithTransnetandevaluatetheirPortDevelopmentFramework(PDF)Plansfortransport&manufacturing

opportunities.



6.2.2 Projects and Initiatives of Relevance to the Eastern Cape

Anumberofprojectsandinitiativeshavebeenidentifiedafterengagementwithvariousstakeholdersandacomprehensivescanofallavailableliterature,withfurtherprojectsandinformationstillanticipated.1. EnablingProgrammes,ProjectsandLocation:- ThetwoSpecialEconomicZones(SEZs)atEastLondonandCoega, ThenewliquidfuelterminalatthePortofNgqura–valuechainopportunities, Unlockinvestmentinnewandexistingportfacilities, SupportalocalregistryofvesselstoencourageSAFlaggedShips&construction, EncourageTransnetlocalprocurement, EstablishanewmanganeseterminalatthePortofNgqura,Section79approvalgranted, Encouragethe‘CompositesCluster’inPortElizabeth, FacilitatespecialistboatbuildinginthePoPE(SailingCatamarans,Buttcatsetc.) TugboatmanufactureinPoPE,and FishingfleetrecapitalisationinPoPE.2. DriversorChampions:- CollaboratewithTransnet&SEZs, WorkwithfishingindustryandMaritimeClusters,and Collaboratewithtertiarylearninginstitutionsforresearchandinnovationopportunities.

TheseprojectsandinitiativeshavebeencollatedandplacedintotheEasternCapeOceanEconomydatabaseinafashionthatallowsfortheprojectstobeeconomicallymodelledoveratwentyyeartimeframeandforthisdatatobejuxtaposedagainstthenationalandprovincialmaineconomiesandoceaneconomiesrespectively.

Theprojectdetailsforeachofthesesectorprojectshasbeenrecordedandextrapolatedoveratwentyyeartimeframe,withprojectcommencementdates,projectcapitalexpenditurevaluestoimplement,thecommencementdateforoperations,thevalueofoperationsorbenefitsuponcommencement,andthedirectformalemploymentopportunitiescreatedfromoperations.ThisdatasetfortheeconomicsectorconsideredhasallowedaGrossDomesticProductanddirectformalemploymentcreationprofileoverthetwenty-yeartimeframetobeformulated.Therelevantprojectsaretabulatedbelow:

Table 33: Ocean Sector: Marine Transport and Manufacturing

Source: Eastern Cape ocean economy research and stakeholder engagement for this report. 2019.

1 Location Project Commence Yr 2020 - 29

Capital Value (Rm)

Operating Jobs p.a.

Turnover or GDP Value p.a. (Rm)

1 Com pos ites C lus ter es tablis hed in P oP E P oP E 2021 200 50 40 2 Tugboat m anufac turing for S A DC - per y ear Ngqura 2020 150 60 50 3 S A fis hing fleet rec apita lis at ion - per y ear E L & P oP E 2023 350 100 150 4 A ttrac t one lux ury c ruis e boat / c atam aran m anufac turer P oP E 2022 400 45 90 5 E s tablis h a s pec ialis t 'O il R ig ' m aintenanc e & refurbis hm ent Ngqura 2024 500 45 150 6 S pec ialis t s and blas t ing fac ility E L 2021 220 15 30 7 Dry Doc k s pec ialis t m aintenanc e c om pany E L 2021 150 30 75 8 M arine B oat B uild ing C lus ter E L 2022 500 100 250 9

10Totals 8 2,470 445 835

Marine Transport & Manufacturing Projects:Project Name.



6.2.3 High Level Economic Impact Assessment

TheeconomicmodellingundertakenforeachofthesectorsintermsoftheprojectslistedinthetableabovehasallowedforanEconomicImpactAssessmenttobeundertakenfortherelevanteconomicsectorintermsoftheIndustrialDevelopmentCorporation(IDC)Input-Outputanalysismultipliersasestablishedin2016,andbasedtotheyear2015.TheGDPor‘turnovervalue’aboverepresentsthefirstfullyearofoperationsproductionorturnoverinthesenseoftheeconomicimpactassessmentmethodologyemployedtogeneratethefollowingtable.

Table 34: Economic Impact Assessment - Marine Transport and Manufacturing

6.2.4 Synthesis and Next Steps

ThisOceansEconomysectorhasstrongpotentialtobecomeameaningfulcontributortotheEasternCapeeconomyandneedstobeconcentrateduponinordertorealisethefullpotential.

Next steps that could be considered include:

• FurtherengagementswiththeNationalPortAuthority(NPA)fortheportsofEastLondon,NgquraandPortElizabeth.• FurtherengagementwiththetwoprovincialSpecialEconomicZones(SEZs),theEastLondonIndustrialDevelopment

Zone(ELIDZ)andtheCoegaDevelopmentCorporation(CDC).• Afollow-updiscussionwithprovincialDEDEATinordertoestablishtheirprogressonacurrentstudybeingundertaken

onmaritimeboatandshipbuildingintheprovince.• AninvestigationintotheboatandshipbuildingclustersinCapeTown,KnysnaandeThekwini.

Marine Transport & Manufacturing (Rand Millions) - Year 20 [R e a l va lu e , 'D e fla te d ' b a ck - Jo b s ]

Economic Activity & Employment Direct Indirect Induced TotalP roduc t ion / Turnover [R m ] R 1,560 R 224 R 643 R 2,427G ros s Dom es t ic P roduc t (G DP ) R 588 R 246 R 705 R 1,539Inc om e (W ages & P rofits ) R 247 R 103 R 296 R 646E m ploy m ent (Job Y ears ) 1,037 313 1,027 2,377

Source: R a n d In te rn a tio n a l C a p ita l C a lcu la tio n s (2 0 1 9 ) [IDC Sec tor : Manuf ac tur ing, 'Other Trans por t Equip ' (30) ]



6.3 OFFSHORE OIL AND GAS (OOG)

Africa,andparticularlysouthernAfrica,iswellpositionedtorealisesignificantopportunitiesacrosstheoilandgasvaluechainasthisindustrydevelopstowardsitsfullpotential.Africa’seconomiesaresomeofthefastestgrowingeconomiesintheworld,andwhileoilandgasactivitywillinitiallyfocusonexploration,astheindustrymaturesotherareasofthevaluechainwilldevelopandplayagreaterroleasdomesticmarketsforoilandgasproductsdevelop.

DuetotheestablishedmidstreamanddownstreamactivitiesinSouthAfricaasaresultofamaturedownstreamindustry(refiningandprocessingofoil,coalandgas),SouthAfricahasdevelopedasakeylocationformanylocal,regionalandmultinationaloilandgascompaniesactiveinthevaluechain.

Recently,thesuccessfulexplorationinSub-SaharanAfricahasresultedinincreasedactivityinoilandgasintheregion,andSouthAfricaiswellplacedtoserveasapermanenthubprovidingservicesandexpertiseforoilandgasinAfrica.Particularexpertiseandcriticalmasshasbeenreachedinseveralsubsectorsoftheoverallupstreamandmidstreamvaluechains:FabricationandConstruction;Ship/RigRepairandMaintenance;DistributionandLogistics;andExplorationand Production Services are certain of these industries.

6.3.1 The Current Status of the Offshore Oil and Gas Sector - OOG

Onanationallevel,theIntegratedResourcePlan(IRP)providestheplanningforthesupplyanddemandoftheenergymixinSouthAfrica.Intermsofinvestment,approximatelyR7,643billionhasbeeninvestedbytheprivatesectorandapproximatelyR10,806billionhasbeeninvestedbygovernment.

On a provincial scale, the Port of Ngqura has the advantage of readiness for the creation of the 1,000 Megawatt (MW) gas-to-power project, The development of the strategic framework has been directed to formulate an important set of actions to enable the development in each of the subsectors as follows:

• Triggerkeyinfrastructureprocesseswhichwillinturnhaveacatalyticeffectontheprovincialpetrochemical,chemicalandenergyindustry

• Attractkeyinvestmenttosupportorunlockupstream,midstreamanddownstreamvaluechains,and• AttractanchorprojectstotheEasternCape.Thiswillrequirefocusedpoliticallobbyingandinterventions.

6.3.2 Projects, Initiatives and Opportunities of Relevance to the Eastern Cape

The Eastern Cape and Southern Coastline have the highest potential reserves of natural gas in South Africa. As such, the following projects have been proposed in the hopes of creating a gas economy in the province:

1. OilrefineryatthePortofNgqura2. FuelstoragefacilityatthePortofNgqura3. OffshorebunkeringatAlgoaBay4. Fuelbunkering“valuechain”facility5. Liquidnaturalgas(LNG)terminalatthePortofNgqura,and6. 1,000Megawatt(MW)gas-to-powerprojectatthePortofNgqura



TheseprojectsarecurrentlybeingsteeredbytheDepartmentofEconomicDevelopment,EnvironmentalAffairsandTour-ism(DEDEAT),EasternCape.Presently,thecommencementoftheseprojectsisdependentongovernment’sdecisiontoinvestin“OilandGas”inKwa-ZuluNatal(whichisdeemedtobethebetterdecisionintheshortterm),ortheEasternCape(whichisseenasthebetterdecisioninthelongtermduetothehigherpotentialreservesintheprovince).Thediscussionanddebateisstillcurrent.

6.3.2.1OilandGasProjectValueChain–PortofNgqura&CoegaSEZ

Shortterm(1–3years)TheCoegaSEZvaluechainfocusesonimportingliquidnaturalgas(LNG)insmallquantitiesincryogenicISOintermodalcontainers,whichwillbeusedtoinitiatetheconversionofindustrialusersofenergytonaturalgas.Thisstageoftheproj-ectwillmakeuseofexistinginfrastructure,currentlypresentatthePortofNgquraandtheexistingcapabilitiesinroadandrailtransport.However,significanteffortwillberequiredtoovercomethebarriersofconversionforendusers.Thisisbecausetheywillneedtodevelopconfidenceinthesecurityofthesupply,andassessthecostinvolvedwithlongtermuseaswellasinitialconversioninordertodeterminethefeasibilityofitslongtermuse.

Mediumterm(3–5years)Thebulkliquidnaturalgas(LNG)importandexportfacilityneedstobeestablishedinordertosupplythepowergenera-tionfacilitiesintheCoegaIDZ.TheLNGfacilitywillalsohavetoincludeeitheranoffshoreorfloatingstorageandregasifi-cationfacility.AnonshoreLNGofftakepointwillberequiredtosupplyLNGthroughcryogenicISOintermodalcontainerstoindustrialandcommercialusersbyroadorrail,andanonshoreNGpipelinewillsupplygastothepowergenerationfacilitiesintheIDZ.

Longterm(>5years)ThefocusofthissectionofthevaluechainwillbetoreplacetheimportedLNGwiththedomesticsupplywhichwillorig-inatefromeithertheshalegasresourcesintheKaroo,offshoreresourcesorpipedgasfromMozambique,andusingthattosupplylocalpowergenerationforindustrial/commercial/householduseandforpipingtoMossgasforconversiontoliquidfuels.

CertainoftheOffshoreOilandGasprojectsconsideredareasfollows:

Table 35: Ocean Sector: Offshore Oil and Gas



Capital Value (Rm)

Operating Jobs p.a.


1 O il refinery at Coega S E Z [P rojec t M thom bo] Coega S E Z 2024 30,000 1,000 4,500 2 F uel s torage fac ility at Coega (G rindrod O TG ) Ngqura 2021 3,000 300 300 3 O ffs hore bunk ering & Related (Chandling etc ) Ngqura 2020 150 45 50 4 M arine S ervic e Centre - B unk ering C lients & V alue Chain Coega S E Z 2021 150 55 100 5 Liquid Natural G as (LNG ) im port and ex port fac ility Coega S E Z 2025 1,000 65 350 6 G as -to-P ower P lant (1,000 M W ) Coega S E Z 2023 25,000 850 8,213 7 W as te Rec ept ion F ac ility (O ily S lops ) Ngqura 2022 3,000 200 450 8 DE DIS A P eak ing P lant (500 M W ) - Convert from dies el to gas . Coega S E Z 2024 1,000 25 250 9

10Totals 8 63,300 2,540 14,213

Offshore Oil & Gas Projects:Project Name.




TheGDPor‘turnovervalue’aboverepresentsthefirstfullyearofoperationsproductionorturnoverinthesenseoftheeconomicimpactassessmentmethodologyemployedtogeneratethefollowingtable.

Table 36: Economic Impact Assessment – Offshore Oil and Gas


ThisOceansEconomysectorhasvastpotentialandcoulddefinetheeconomyoftheEasternCapeoverthenexttwentyyearsandcreateaninternationallyrecognisedoilandgashubaroundthePortofNgqura.


• DrafthighlevelProjectInformationMemoranda(PIMs)orInvestmentMemoranda(IMs)forthetopthreeprojects,toclearlyindicatethemarketdemandandconnections,theviabilityofthebusinesscase,thekeystakeholdersandpartiestothevariousprojects,aclearprojectstructure,therespectiverolesofthestateandtheprivatesector,andthefundingrequired.AmoredetailedEconomicImpactAssessmentalsoneedstobeundertakenforeachproject.

• AllowtheprojectstobecomestrategicprovincialprojectsandnotremainvestedinStateOwnedEntitiesorquasi-governmententitieswhicharecurrentlystiflingthepotentialoftheseprojects.

Offshore Oil & Gas (Rand Millions) - Year 20 [R e a l va lu e , 'D e fla te d ' b a ck - Jo b s ]

Economic Activity & Employment Direct Indirect Induced TotalP roduc t ion / Turnover [R m ] R 25,895 R 4,070 R 5,673 R 35,638G ros s Dom es t ic P roduc t (G DP ) R 10,269 R 3,346 R 4,664 R 18,278Inc om e (W ages & P rofits ) R 4,107 R 1,338 R 1,865 R 7,311E m ploy m ent (Job Y ears ) 6,907 3,648 6,793 17,348

Source: R a n d In te rn a tio n a l C a p ita l C a lcu la tio n s (2 0 1 9 ) [ IDC S ec tor: P etroleum P roduc ts (15)]



6.4 AQUA-CULTURE

Fishandfisheryproductsareamongthemosttradedfoodcommoditiesworldwide,withtradevolumesandvaluesreachingnewhighsin2011andexpectedtocarryonrising,withdevelopingcountriescontinuingtoaccountforthebulkofworldexports.Whilecapturefisheriesproductionremainsstable,aquacultureproductionkeepsonexpanding.Aquacultureissettoremainoneofthefastest-growinganimalfood-producingsectorsand,inthenextdecade,totalproductionfrombothcaptureandaquaculturewillexceedthatofbeef,porkorpoultry.(FOAUnitedNations,2012.)

Aquacultureisdefinedasthepropagation,improvement,tradeorrearingofaquaticorganisms(i.e.plantandanimal)incontrolledorselectedaquaticenvironments(i.e.fresh,seaorbrackishwaters)foranycommercial,subsistence,recreationalorotherpublicorprivatepurpose.

Aquaculturedoesnotincludecapturefisheries,whichentailstheharvestingofaquaticorganismsfromanenvironmentinwhichnoattempthasbeenmadetomanageorotherwiseinfluenceanyorganismsbycontainment,feedingorapplicationofanyhusbandrytechniques.

SouthAfricahasawell-establishedfisherysector,comprisingoftwocomponents,wildcapturefisherieswhichrangefromhighlyindustrialisedcapitalintensivefishingsectorstomoreaccessiblefishingsectors,includingsubsistencefisheriesandanaquaculturecomponentwhichisstillundergoingdevelopment.

6.4.1 The Current Status of the OP Sector - Aqua-culture

Withglobalpressurebeingexertedonwildfishstocksandoverexploitationofallmarineresourcestakingplace,afundamentalmovetoaquaculturebasedproductionhastakenplace.Currently,2030jobshavebeencreatedintheSouthAfricanaquacultureindustrythroughOperationPhakisa.Financially,R1.2billionhasbeeninvestedintheindustry,ofwhichR260millionwasfromgovernment.

Onaprovincialscale,theEasternCapehasbeenattheforefrontofcertainaquacultureinitiatives,withmixedresultsoflargefailuresincertainsegmentsandpocketsofexcellenceinothers.TwoSpecialEconomicZones(SEZs)atEastLondonandCoegahavefocusedaquacultureprogrammesandinitiativesinplace.


The following projects have been proposed for the Eastern Cape:-

1. FourAquacultureDevelopmentZones(ADZs)intheEasternCape2. WildCoastAbaloneranchingclusterinPortElizabethandEastLondon3. NewKobfarminHamburg4. KarooCatch:Catfishfarming5. AlgoaBayFinfishAquacultureDevelopmentZone(ADZ)6. CoegaIDZaquaculturezone7. QoloraAquacultureDevelopmentZone(ADZ)

TheseprojectsarebeingdrivenbyvariousstakeholdersincludingtheDepartmentofAgriculture,ForestryandFisheries(DAFF),DepartmentofRuralDevelopmentandLandReform(DRDLR),withinternationaltechnicalsupportbeingprovidedbytheNationalDevelopmentandReformCommission(NDRC)andtheChinaDevelopmentBank(CDB).



A list and the economic dynamics of the aquaculture projects considered for the Eastern Cape is as follows:

Table 37: Ocean Sector: Aquaculture




Table 38: Economic Impact Assessment – Aquaculture


Capital Value (Rm)

Operating Jobs p.a.


1 Haga Haga A balone farm s - E x pans ion or Duplic at ion Haga Haga 2021 75 40 55 2 Ham burg O y s ter F arm - E x pans ion or Duplic at ion Ham burg 2022 50 30 35 3 Ham burg: K ob F infis h farm ing Ham burg 2022 40 25 30 4 K aroo Catc h: Catfis h farm ing - E x pans ion (S uc c es s ???) G raaf Reinet 2020 60 60 100 5 A lgoa B ay F infis h A quac ulture Developm ent Zone (A DZ) NM B 2021 300 150 200 6 Coega A quac ulture Developm ent Zone (A DZ) NM B 2022 300 150 200 7 Q olora A quac ulture Developm ent Zone (A DZ) Q olora 2022 300 150 200 8 M arine Tilapia Indus try Inc ubator (M TII) - F is h P roc es s ing Q olora & E C 2023 1,000 470 500 9 M TII - Rural s m all s c ale agric ulture - feeds toc k raw m ateria l Q olora & E C 2023 500 3,000 350

10 Coega F is h F arm s (Three of) [?] NM B11 E LIDZ A quac ulture P rojec ts [?] B M C

Totals 9 2,625 4,075 1,670 Note: M arine Tilapia has inc rem ental growth bey ond thes e s tart ing m etric s .

Aquaculture Projects:Project Name.

Aquaculture & Food Processing (Rand Millions) - Year 20 [R e a l va lu e , 'D e fla te d ' b a ck - Jo b s ]


Source: R a n d In te rn a tio n a l C a p ita l C a lcu la tio n s (2 0 1 9 ) [ IDC S ec tor: F ood and B everages ]




ThisOceansEconomysectorofaquacultureholdsvastpotentialfortheEasternCapeduetothenaturalendowmentofnaturaloceanassetsandarangeofsuitablesitesforcommercialexploitation.Certainoftheprojectsbeingconsideredarelabourintensiveandhavedeepvaluechainswhichextendintoruralareas,potentiallyprovidingmuchneededem-ploymentopportunitiesinthesemarginalisedareas.


• EngagingwiththetwoprovincialSEZsforafullandfrankdisclosureofalloftheirpotentialaquacultureprojects,andtheformulationofPIMsand/orIMsforfurtherconsideration.

• EngagingwithprovincialDEDEATinordertobetterunderstandtheworkthattheyarecurrentlyundertakinginthisarena,togetherwiththeformulationofPIMsorIMs.

• Engagingwithacademiawithintheprovince,specificallyforundertakingfurtherresearchincertainoftheprojectsidentifiedabove.

6.5 MARINE PROTECTION SERVICES & OCEAN GOVERNANCE (MP & OG)

Internationaloceangovernanceincludestheprocesses,agreements,rules,institutions,andsuchwhichhavebeendevelopedtoorganisethewayinwhichhumansusetheoceananditsresources.Notincludingtheterritorialwatersofcountries,oceangovernancerelatestotheHighSeasandinternationalseabed“Area”whichsupportvitalbiologicalresources.

TheMarineProtectionServicesandOceanGovernancefocusareaofOperationPhakisalookedatSouthAfrica’sjurisdictionoveraverylargeexclusiveeconomiczone(EEZ),withanextentofoneandahalfmillionsquarekilometresofoceanterrain.Withsuchalargeoceanjurisdiction,effectivegovernanceiscriticalbutwillbechallenginggiventhesizeandcomplexityofSouthAfrica’soceans.

6.5.1 The Current Status of the MP & OG Sector

Thereisaglobalandnationalneedtoprovidemorecertaintyandsecuritytooceanterritories,tocurbillegalactivitiesandundertakemonitoringandevaluationtothebenefitofall.Currently,58jobshavebeencreatedasaresultofOperationPhakisa,andthegovernmenthasinvestedbetweenR58.55millionintothissectorbetween2017and2019.(DEA,2019)Onthe23rdofMay,agovernmentgazettewasreleasedwiththedeclarationof20newMarineProtectedAreasundertheNationalEnvironmentalManagement:ProtectedAreasAct,2003(ActNo.57of2003).ThedeclarationoftheseMarineProtectedAreaswillincreasethespatialprotectionforSouthAfrica’scurrentoceanenvironmentfrom0.4%to5.4%,providingatleastsomeprotectionto90%ofthehabitattypesandcontributetoglobalprotectioninlinewithSouthAfrica’scommitmenttotheConventiononBiologicalDiversity.

The newly declared MPA’s in the Eastern Cape are:

1. Addo Elephant MPA2. AmatholeOffshoreMPA3. PortElizabethCoralsMPA




ThefollowingisashortsummaryofthevariousprojectsunderthissectorofOperationPhakisa,theirpurposeandtheircurrent status.

6.5.2.1Oceaneconomysecretariat

ThepurposeofthissecretariatistoprovidesupporttoallOperationPhakisa:OceanEconomyfocusarea/deliveryunitsresponsiblefortheimplementationoftheOperationPhakisa:OceanEconomyinitiatives.Ithasbeenestablishedandiscurrentlyfunctional.Itfacilitatesinterdepartmentalcohesionandco-operationinmakingsureprojectdeliveryisnotimpeded.Furthermore,itco-ordinatesreportingandconsolidatesOperationPhakisa:OceanEconomyreportsfortheDirectorGeneralLabCoordinatingCommittee(LCC)andtheMinisterialManagementCommittee(MINMANCO).Andfinally,itprovidessecretariatdutiestoboththeDG-LCCandMinisterialMANCO.6.5.2.2 NationalOceanandCoastalInformationSystem(OCIMS)andextendingEarthobservationcapacity

TheproductofthisprojectistheZA-cube2cubesatellitewhichwaslaunchedon28thofDecember2018.Thelaunchwassuccessfulandcommunicationestablishmentwasthereceiptofdata.ThedatareceivedrevealedvessellocationsandshallbeutilisedtofurtherenhancetheIntegratedVesselTracking(IVT)bycomplimentingtheAISandVMSdata.ThisinnovationisaproductofaprojectbyyoungandpreviouslydisadvantagedstudentsfromtheCapePeninsulaUniversityofTechnology(CPUT),andsponsoredbytheDepartmentofScienceandTechnology.

6.5.2.3Nationaloceansandcoastwaterqualitymanagement

TheNationalPollutionLaboratory(NPL)hasbeenestablishedandiscurrentlyhostedandoperatedbytheWalterSisuluUniversity(WSU)MthathaCampus.High-techequipmenthasbeeninstalledinordertocollectandanalysesamplesatse-lectedsitesfromthreecoastalprovinces(namelyKwa-ZuluNatal,EasternCapeandtheNorthernCape,withtheWesternCapemaintainingtheirownprovincialprogram).

The projects and programs identified for implementation in the Eastern Cape are as follows:

Table 39: Ocean Sector: Marine Protection and Ocean Governance



Capital Value (Rm)

Operating Jobs p.a.


1 O c ean ec onom y s ec retariat E C 2021 30 15 20 2 Nat ional oc ean and c oas tal inform ation s y s tem (NO CIM S ) E C 2022 40 20 25 3 NO CIM S ex tending earth obs ervat ion c apac ity E C 2023 40 20 25 4 Nat ional oc eans and c oas t water quality m anagem ent E C 2024 50 25 30 56789

10Totals 4 160 80 100

Marine Protection Services and Ocean GovernanceProject Name.





Table 40: Economic Impact Assessment – Marine Protection & Ocean Governance


ThisOceansEconomysectorofMarineProtectionandOceanGovernanceisvitallyimportantinordertosafeguardthefu-tureoftheoceanresourcesfromdestructionordegradationbybothinternationalandlocalpartiesandentities.ThereisaglobalbodyofrulesthatisevolvingandSouthAfricaneedstobeattheforefrontofthistrendandensurethatouroceanassetsareadequatelymonitoredandprotected.


• MoreefficientmonitoringofillegalfishingactivitieswithinSouthAfrica’sterritorialwaters,particularlyofthecoastofthe eastern section of the Eastern Cape.

• Theestablishmentofapublicprivateentitytomonitorandadviseonoceanpollutionprevention.• ConductaformalinvestigationintothedangersandrisksposedbytheOffshoreFuelBunkeringoperationcurrently

beingoperatedinAlgoaBay.

Marine Protection Services & Governance (Rand Millions). [R e a l va lu e , 'D e fla te d ' b a ck - Jo b s ]

Economic Activity & Employment Direct Indirect Induced TotalP roduc t ion / Turnover R 185 R 10 R 82 R 277G ros s Dom es t ic P roduc t (G DP ) R 120 R 17 R 138 R 274Inc om e (W ages & P rofits ) R 66 R 9 R 76 R 151E m ploy m ent (Job Y ears ) 245 22 201 468

Source: R a n d In te rn a tio n a l C a p ita l C a lcu la tio n s (2 0 1 9 ) [ IDC S ec tor: G eneral G overnm ent (46)]



6.6 SMALL HARBOUR DEVELOPMENT

SouthAfricaneedstoleverageitsstrategiclocation,infrastructureandskillsbasetoacceleratethegrowthofmarinetransport,stimulatesustainablewildfishcaptureandaquaculture,improveoceanrelatedtourismopportunitiesandstimulateabroadrangeofeconomicactivitieswhichcanbelocatedinandalongsidesmallharbours.Thisrequiresthataconduciveregulatoryframeworkbeprovidedaswellasunlockingfundingopportunitiesthroughadministrativecertaintywithregardtostateownedproperties.Thefasttrackingofprioritymaritimeinfrastructureprojectswillassistinthisprocess.

TheSouthAfricansmallharbours,bothproclaimedandunproclaimedhaveasignificantroletoplayinthesocio-economicdevelopmentofthecommunitieswheretheyarelocated,togetherwithgrowingthelargeroceaneconomy.OpportunitiesexistforfosteringSouthAfrica’sindigenousshippingindustry,providingsmallharboursasdomesticharboursundercabotage(reservingoftransportationofgoodsdomesticallytoindigenousshipowners)inseatransport,andcreatingorstimulatingashipbuildingandrepairindustry,particularlytargetingfishingvessels.

Smallharboursarealsocriticalinmaintainingsecurityandterritorialintegrityofthecountry,astheseharboursconstitutepartofthebordersoftheRepublicofSouthAfrica.

6.6.1 The Current Status of the OP Sector – Small Harbours

1. Nationally:- SAhasapproximately2,800kilometresofcoastlinewithapproximately50potentialandexistingunproclaimedsmall

harbours, TheDepartmentofPublicWorks(DPW)hasheldextensiveconsultationwithprovincesandmunicipalities,and

identifiedinitialdevelopmentprojects, Investorconferencesneedtobeheldtostimulateprivatesectorinterest,withcogentProjectInformationMemoranda

(PIMs)havingbeenpreparedinadvance. Atotalofseventycoastalprojectshavebeenidentifiedacrossthefourcoastalprovinces.2. Smallharbourswhichhavebeenprioritised:- PortEdward/Hibberdene(KZN) PortStJohns(EasternCape) PortNolloth/Boegoebaai(NorthernCape)3. Thepotentialforsmallharboursisasfollows:- Safety,security&territorialintegrity, LocalEconomicDevelopmentpotential, Fishingindustryenabler, Tourismenabler,and Communityempowerment&socialinfrastructuresolutions.




The Department of Public Works (DPW) has moved ahead with this initiative:

• AconferencewasorganisedbynationalDPW,initscapacityastheDeliveryUnitandtheSecretariatoftheSmallHar-bours&StateCoastalPropertiesDevelopmentLabofOperationPhakisa:OceansEconomy.

• ThemandateoftheLabwastofacilitatethedevelopmentofnewharbours,themanagementofexistingharboursandthefurtherdevelopmentofcoastalstateownedpropertytocreateathrivingoceanseconomy.

• TowardstheofficiallaunchoftheDeliveryLab,thenationalDPWembarkedonaseriesofstakeholderengagementswithallCoastalLocalMunicipalities,fourCoastalDistrictMunicipalities,twoMetros,OfficeofthePremier(OTP)andotherstakeholdersintheEasternCape.

• TheseengagementsweretoculminateintoaProvincialInvestorConference,withoutputstobepresentedattheofficiallaunchoftheDeliveryUnit.

The desired outputs of this process were as follows:

• Apackageofpre-approvedprojectsforpresentationanddiscussionatOperationPhakisaOceanEconomy:SmallHar-boursandStateCoastalPropertiesDevelopmentDeliverylab;

• Theestablishmentofcommunicationandrelationshipsbetweenmatchedmunicipalitiesandinvestors,and• Theestablishmentofworkingteamsperprojectinpreparationforthedeliverylab.

These were the process steps leading up to the conference:-

• ThenationalDPWworkingwithCoastalMunicipalities,weretoconfirmavailablecoastallandandownershipthereof–whoownstheland–themunicipalityorNDPW?

• NDPWinpartnershipwithOTPandECSECCheldroundofworkshopswithindividualCoastalDistrictMunicipalitiesandtheMetrostofirm-upprojectprofiles,

• MunicipalitiespreparedtheirInvestmentBrochure/Booklet,• TasksTeamscomprisedofrepresentativesfromcoastalmunicipalitiesandprovincialgovernmentwereset-uptopre-

parethelogisticsoftheConference,andidentifyinvestors.



The final list of screened projects from municipalities were clustered into the following project priority areas for allmunicipalities.TheseclustersrepresentedthestrategicprioritiesforsmallharboursintheEasternCapeaswhole:

Strategic

Priorities

01SmallCraftHarbours

02Small-scaleFishing&Aquaculture

03Waterfront & BeachfrontDev.

04Coastal & Marine Tourism

05SmallTownRevitalisation

Description

Infrastructuredevelopmentforsmall-scalefishingand recreational activities (boat-launchingsites,lead-injetties,slipways,etc).

Buildfishstorageandprocessingfacilities,marineaquacultureinfrastructure,protection of estuaries,etc.

Encouragerealestateandmarinadevelopmentalongcoastaltownareasoftheprovince.

Promotecoastalandmarinetourismandbuildthetourisminfrastructure

Putinplaceenablingpublicinfrastructure,i.e.ablutionfacilities,accessroads,boardwalks,etc.

Source:DPW,2018.LessonslearntfromEasternCapesmallharboursinvestorssummit.(Apresentationdated8August2018)

6.6.3 Opportunities for Eastern Cape:-

1. Projectsidentifiedandlocation:- PortStJohns, PortAlfred,and PortStFrancis.2. DriversorChampions:- DAFF&DPW,EasternCapeDEDEAT3. Establisha‘SmallHarboursDevelopment’campaign:- IdentificationofpotentialharbourdevelopmentprojectsalongtheEasternCapecoast, Canvasscurrentlocalindustry&community, Establishlocal‘SteeringCommittees’, ‘SustainableDevelopment’approach,and InvolvePublicstakeholders.4. InitialProjects:- LocalEconomicDevelopmentand‘MarketDemand’studies, DepartmentofPublicWorks(DPW)toprovidepropertyinformation, Harbourorwaterfront‘MasterPlans’tobedeveloped,and Promote‘Plans’andProjectInformationMemorandaataninvestorconference.5. NextSteps:- Establisha‘Team’or‘Champion’toproceed.

WiththeEasternCapehavingsuchalongsectionofcoastlineandanumberoftownsandlocationswheresmallharbourscanbeestablished,itisimperativethatabetterunderstandingoftheharbouropportunitiesisgained,togetherwithdetailedmarketresearchtoestablishdemandandpotentialeconomicopportunities.



CertainprojectssuchastheproposedsmallharbourdevelopmentatPortStJohnswerefirstmootedmorethanadecadeagoandlittleornoprogresshasbeenmadetodate.Asmalltaskteamshouldbeassembledwiththerequisiteskillstoundertakeameaningfulevaluationofthisandtheotherprojectsformulatedfortheprecinctinordertoestablishtheirviabilityandreadinessforimplementation.Projectsidentifiedforinvestigationare:

Table 41: Ocean Sector: Small Harbour Development




Table 42:


Capital Value (Rm)

Operating Jobs p.a.


1 P ort S t Johns S m all Harbour Developm ent - New P S J 2024 500 50 150 2 P ort A lfred S m all Harbour Developm ent - Upgrade Ndlam be 2023 300 40 120 3 P ort S t F ranc is S m all Harbour Developm ent - Upgrade K ouga 2022 250 30 100 4 Inves t igate Dept of P ublic W ork s land for s uitability E C 2020 10 2 5 P rom ote c oas tal & m arine touris m & build touris m infras . E C 2021 200 50 50 6 Develop enabling public infra: ablut ions , ac c es s , boardwalk s E C 2022 300 75 75 7 Develop s m all c raft harbours - fis hing & rec reat ion E C 2023 400 100 100 8 S m all s c ale fis hing & aquac ulture developm ent E C 2024 500 120 110 9 G onubie S m all Craft Harbour B CM 2025 500 120 110

10 Coffee B ay S m all Craft Harbour K S D 2026 400 100 90 11 P ort G rovenor S m all Craft Harbour Ngquz a LM 2027 350 75 85 12 M z am ba S m all Craft Harbour M biz ana LM 2028 350 75 85 13

Totals 12 4,050 845 1,077

Small Harbour Development Project Name.

Small Harbour Development (Rand Millions). - Year 20 [R e a l va lu e , 'D e fla te d ' b a ck - Jo b s ]

Economic Activity & Employment Direct Indirect Induced TotalP roduc t ion / Turnover R 1,924 R 288 R 576 R 2,787G ros s Dom es t ic P roduc t (G DP ) R 1,203 R 323 R 647 R 2,173Inc om e (W ages & P rofits ) R 421 R 113 R 226 R 761E m ploy m ent (Job Y ears ) 2,061 408 942 3,411

Source: R a n d In te rn a tio n a l C a p ita l C a lcu la tio n s (2 0 1 9 ) [ IDC S ec tor: C ivil engineering (36)]




ThisOceansEconomysectorofsmallharbourrevivalanddevelopmenthassignificanteconomicpotentialduetotheharbourspotentialcentralrolewithincommunitiesandtheabilitytostimulateorsupportotheroceaneconomyactivities.AnetworkofsmallharbourdevelopmentswithintheEasternCapecouldprovideimportantinfrastructurelinkageswiththethreenationalportsownedandoperatedbyTransnet’sNationalPortAuthority.

Opportunitiesforpublicprivatepartnershipsorthepotentialtosecureworldclassdevelopersandoperatorsforharbourdevelopmentswiththecorrectcommercialincentivesshouldbeexplored.


• EstablishaskilledtaskteamtoinvestigatethepotentialandsustainabilityofthesmallharbourdevelopmentpotentialwithintheEasternCape,

• Evaluatetheexistingsmallharboursandpotential,developmentsitesthroughouttheprovince,particularlyonlandthatisownedbystateormunicipalentities,

• CompileProjectInformationMemoranda(PIM’s)forallofthesmallharbourdevelopmentswithpotential,and• Promotethesepotentialdevelopmentsataninvestorsconference.

6.7 COASTAL & MARINE TOURISM

Tourismisincreasinglybeingrecognisedasanimportanteconomicsectorwithdeepvaluechainsandsectorallinkageswhichhasthepotentialtoplayasignificantroleinacountrieseconomicstimulationandemploymentcreation,particularlycountrieswhicharewellendowedwithnaturalassetsandbiodiversity.

‘Coastaltourismreferstoland-basedtourismactivitiesincludingswimming,surfing,sunbathingandothercoastalrecreationactivitiestakingplaceonthecoastforwhichtheproximitytotheseaisaconditionincludingalsotheirrespectiveservices.Maritimetourismreferstosea-basedactivitiessuchasboating,yachting,cruising,nauticalsportsaswellastheirland-basedservicesandinfrastructures’(Med-IAMER,2013).

TheEasternCapeisparticularlywellendowedwithanextensivecoastline,richbiodiversity,allofthesevenSouthAfricanbiomes,internationallyacclaimedgamereservesandwildlifeconservancies,arichanddiverseculture,supportinfrastructureandthepoliticalwilltoensurethesuccessofthesector.ThegraphicbelowbasedupontheWorldTravelandTourismCouncil(WTTC)viewoftourisminSouthAfricain2015providesacomprehensiveoverviewofthecurrentstatusofthetourismmarketinSouthAfricaanditsfuturepotential.



Figure 7: World Travel & Tourism Council – South African Tourism in 2015

Source: Rand International Capital interpretation of WTTC data, 2018.

ThepotentialforthetourismindustryinSouthAfricain2025isGrossDomesticProductofR184.7billionwithaneconomicmultiplierofthreetimesforthetotaltourismeconomy,andemploymentof948,000withaneconomicmultiplieroftwotimesleadingtoatotalvaluechainemploymentpotentialoftwomillionjobsin2025.



6.7.1 The Current Status of the OP Sector – Coastal and Marine Tourism

1. Nationally:-• TourismisrecognisedasaprioritysectorinSAtobepursuedasanindustrywithdeepvaluechainsandthepotential

forSMMEdevelopmentandruralcommunityenhancement.2. Provincially:- TheEasternCapehasrichbiodiversityandsomeofthemostpopulargamereservesandbeacheswhichneedtobe

promotedwithasoundstrategyinplace. Certain of the key initiative required could be as follows:-

• Infrastructuredevelopmentandupgradingofbeachfronts/waterfrontsandmarinas;• EnhancementofCoastalNatureReservesownedandmanagedbytheECPTA;• TouristsSafety,Waterquality,securityofdangerousspecies&roughseas;• Eventsfocusingonthosewithapotentialofbeingelevatedtonationalandinternationallevelbutalsoreflectingon

marinecomponent;• CoastalandMarineTourismOverarchingPlanfortheWildCoastTourismCorridorfocusingonPortStJohnstoCoffee

Bay;and• Enterpriseandskillsdevelopmentaligningwithothertourismdevelopmentinitiativesimplemented.

TheOperationPhakisaLaboratorieshaveidentifiedtwokeytourismnodesintheEasternCapeoutoffour,foraconcen-trationofresourcesandeffort.ThesenodesarethePortStJohnstoCoffeeBaynodeaswellastheEastLondontoPortElizabethandsurroundsasindicatedinthefigurebelow.



Figure 8:South African Coastal and Marine Tourism Nodes

Source: Operation Phakisa Tourism Laboratory, 2017.




1. Projects&Location:-• ‘Indi-AtlanticRoute’tobedeveloped,• CruiseShipTourismneedstobepursued,• WaterfrontDevelopmentsinEL&PoPE,• Linkageswiththe‘Big7’andgamereserves,• Annual‘SardineRun’asan‘Event’,• Celebraterichbio-diversitywithculture,• PromotetheN2WildCoasttourismroute,• ConnecttheWildCoasttourismresortstotheN2,• PortStJohnsasasmallharbourandtouristdestination,• Infrastructureupgrades-selectedbeaches,• PromoteBlueFlagBeaches,• PromotegamefarmsandAENP,• Capacitatemunicipal&provincial‘Tourism’Departments,• DevelopmentofthePortStJohns–CoffeeBayMasterPlan,

2. DriversorChampions:-• RegionalTourismDepartments,• Projectspecificchampions.

ThisanalysishasindicatedthattheEasternCapehasanabundanceofpotentialtourismprojects,butthatthemajorityoftheseremainmarginallyviableandnotyetreadyforanumberofreasons.Withthemajoronesbeingunsubstantiatedmarketdemand,poorsupportinghardandsoftinfrastructure,andalackofprojectdriversorchampions.Theprojectsidentifiedatthisearlystageandtheireconomicpotentialisindicatedinthefollowingtable:

Table 43: Ocean Sector: Coastal and Marine Tourism



Capital Value (Rm)

Operating Jobs p.a.


1 W ild Coas t Touris m Corridor (P S J to Coffee B ay ) O RT DM 2021 100 15 15 2 N2 W ild Coas t Toll Road E C 2022 2,000 150 200 3 Upgrading all beac hfronts , waterfronts and m arinas E C 2021 300 35 150 4 E nhanc ing Coas tal Nature Res erves m anaged by E CP TA E C 2020 400 50 100 5 B ay world A quarium & M us eum Developm ent NM B 2021 350 75 150 6 W aterfront Developm ent - P oP E NM B 2023 9,000 3,000 900 7 W aterfront Developm ent - E as t London E L 2025 3,500 800 300 8 NM B as a 'W aters port Capita l' [ Ironm an, Y ac ht ing, D iving] NM B 2021 200 50 100 9 "Trans k ei G ap" Coas tal Infra. Devel (C ID) P re-F eas ibility S tudy E C 2022 500 120 250

10Totals 9 16,350 4,295 2,165

Coastal and Marine Tourism Project Name.





Table 44: Economic Impact Assessment – Coastal and Marine Tourism


ThisOceansEconomysectorofcoastalormarinetourismispotentiallyoneofthemostdiverseandubiquitouswithrealpotentialtoattainlargemeaningfuldevelopmentandpositiveeconomicbenefitsatscale.Inordertoachievethisafocusedandmulti-tieredapproachwillberequiredinordertoharnessalloftherelevantroleplayersfromboththepublicandprivatesector,andproduceanacceptableroadmapandstrategywhichhasuniversalacceptance.


• Compilingamoredetailedandrepresentativedatabaseofallofthetourismprojectsthatarecurrentlyintheprovince,andassignarankinginordertoprioritisethesebaseduponanacceptableranking,

• Identifythemaininstitutionalentitiesfortheauctioningofa‘ProvincialTourismMasterplan’.• DraftProjectInformationMemoranda(PIMs)forthetop-tenprojects,clearlyindicatingtheirappealandstateofreadi-

nessforprivatesectorparticipationandinvestment.• PresenttheEasternCapetourismopportunitiesataninvestorconference.

Coastal & Marine Tourism (Rand Millions). [R e a l va lu e , 'D e fla te d ' b a ck - Jo b s ]

Economic Activity & Employment Direct Indirect Induced TotalP roduc t ion / Turnover R 4,016 R 663 R 1,225 R 5,904G ros s Dom es t ic P roduc t (G DP ) R 2,085 R 839 R 1,552 R 4,476Inc om e (W ages & P rofits ) R 1,043 R 420 R 776 R 2,238E m ploy m ent (Job Y ears ) 7,579 1,232 2,259 11,070

Source: R a n d In te rn a tio n a l C a p ita l C a lcu la tio n s (2 0 1 9 ) [ IDC S ec tor: Catering & ac c om m odation (38)]



6.8 SKILLS AND CAPACITY BUILDING

1. Nationally:- TheOceansEconomyissupportedbyaco-ordinated,nationalmaritimeskillsdevelopmentplan.TheSouthAfrican

InternationalMaritimeInstitute(SAIMI)managesandco-ordinatesfiveworkinggroups,bringingtogethereducationandtrainingproviders;OceansEconomyDeliveryUnits;industryrepresentatives,andacademicspecialistsinordertodevelopanintegratednationalplan.

2. Provincially:-• TheEChasabroadrangeoffinetertiaryeducationinstitutionssuchasWalterSisuluUniversity(WSU),RhodesUniver-

sityandtheNelsonMandelaUniversity(NMU),whichneedtobeengagedwithina‘QuadrupleHelix’forumtoenhanceskillsandtrainingintheOceanandMaritimeSector.

• MaritimeClustersshouldbeengagedwithtoenhanceawarenessandtheneedsandopportunitiesinthemaritimesectors.

6.8.1 The Current Status of the OP Sector – Skills Development & Capacity Building

Moreresearchneedstobeundertakentohighlighttheareaswhichareinshortsupply.

The Eastern Cape Office of the Premier (OTP) has identified the following initiatives:

• ThefirstcohortofmatriculantsatthetwopilotHighSchoolsinEastLondonsatformatricexamsin2018.• DiscussionwithBoatbuildingcompaniestoplaceTVETexperiencedlearnersandapprenticeshighlightedtheneedfor

somepreparatorytrainingbeforelearnersareplacedinacapitalintensiveindustry.• MarineManufacturingTaskTeamisdevelopingajointproposalforTVETCollegestoimplementspecialisedpreparatory

coursesandprogrammestomakelearnersreadyforplacementintheBoatbuildingsector.• ThreeTVETCollegesinterestedinofferingtheBoatbuildingQualificationarebeingpilotedinKwa-ZuluNatal

Skills development partnerships are to be formed, and could be based upon the following principles:

• SAIMIassistingtheOfficeofthePremiertoplacelearnersinrelevantworkplacesandtocustomiseprogrammes.• Provincetofinalisetrainingmodelandtheroleofeachintervention,forexample:• TVETCollegesandTransnetEngineeringWorkshopsdothebasicartisantrainingwithworkshoptrainingincluded;

• Privateprovidersandindustrytrainingcentresaddonthespecialisedskillsneedede.g.:compositetraining,cabi-netmakingetc.

• Workplaceexperienceandtrainingforindustryspecificcustomisationofskills.• Universitiestodevelophighlyspecialisedskills• PortofEastLondonsupportingtheMaritimeHighSchools




Itisseenasbeingimperativethataskillsauditbeundertakeninordertoestablishthenatureandextentofskillsthatarerequiredwithintheoceaneconomyandmaritimesector,andthataneffectivesuiteofprogrammesbeimplementedinordertoeffectivelyclosethesegaps.Itisasimportanttoprovideskillswhichareactuallyneededbyboththepublicandprivatesectors,amatchbetweensupplyanddemand.

1. Projects&Location:- MakeuseofthecomprehensiveaquacultureskillsneedsauditwhichwascompletedbyDAFFin2017, Enhancethecapacityofthe‘MaritimeHighSchools’intheEasternCape, MakeuseoftheSAIMIroadmapforcrosssectormaritimeresearch,innovationandknowledgemanagement, EngagewiththeNMUOceanSciencesCampus, EngagewiththeInstituteforCoastalandMarineSciences(CMR).2. LeverageSAIMISkillsPrograms:- Fisheriesandaquaculturedevelopmentinstitute(FADI), SkillstrainingintheSquidIndustry(SEASI), SmallBusinessSupport-TETA(Transport&EducationTrainingAuth.), CompetencyBasedModularTraining(CBMT)forartisans,and MentorshipTraining–Artisans.3. Leversto‘Unlock’theOpportunity:- ‘QuadrupleHelix’modeltobepursued.

ItisundoubtedlytruethatskillsandtraininglieattheheartofanydevelopingindustryandthatinordertobeabletomakemeaningfulprogressinthepursuitoftheOceanEconomyasamajorcontributortotheeconomyoftheEasternCape,significantskill,careandresourcesneedtobeappliedtothisimportantaspectofthesector.Theprojectswhichhavebeenidentifiedforskillsandtrainingatthisstageareasfollow:

Table 45: Ocean Sector: Skills Development and Capacity Building



Capital Value (Rm)

Operating Jobs p.a.


1 F is heries and A quac ulture Developm ent Ins t itute (F A DI) NM B 2020 1.49 20 1.49 2 S k ills t ra in ing in the S quid Indus try (S E A S I) P A to Ts its 2020 8.95 20 1.79 3 S m all B us ines s S upport - TE TA (Trans port & E duc at ion Training A uth.) E C 2020 1.80 20 0.90 4 Com petenc y B as ed M odular Training (CB M T) for art is ans E C 2020 0.77 15 0.77 5 M entors hip Training - A rt is ans E C 2020 0.09 8 0.09 6 M arit im e Training College (E L TNP A ) E L 2021 10.00 20 25.00 7 Ins t itute for Coas tal & M arine Res earc h (CM R) c ours es NM B 2020 20.00 25 30.00 89

10Totals 7 43 128 60

Skill Development Projects:Project Name.





Table 46: Economic Impact Assessment – Skills Development & Capacity Building


ThisOceansEconomysectorisseenasbeingfoundationaltothesuccessfulpursuitoftheOceanEconomywithintheprovinceoftheEasternCape,andnationally.TheeffortsofnationalentitiessuchasSAIMIneedtobesupportedandcollaborativearrangementsshouldbesoughtandstructuredinordertoremainrelevantinthenationalcontextanddiscourse,aswellasbeabletoenhancetheperformanceofregionalskillsandtraininginstitutions.

ThestrongemphasisontheOceanEconomyandOceanSciencesbytheprovincialtertiaryinstitutionsneedstoharnessedinordertoestablishandmaintain‘first-mover-advantage’andcreateaclusterofexcellencewithintheprovince.


• EstablishaprovincialtaskteamorentitytoengagewithSAIMIandtherelevantprovincialtertiaryinstitutionstocoordinateabold,clearandcoordinatedskillsprogram.

• Developa‘RoadMap’andhighleveloverviewoftheprovincialOceanEconomyskillsenhancementframeworkinordertobeabletocontextualisethisinthenationalandinternationaldomain.

Skills Development (Rand Millions). [R e a l va lu e , 'D e fla te d ' b a ck - Jo b s ]


Source: R a n d In te rn a tio n a l C a p ita l C a lcu la tio n s (2 0 1 9 ) [ IDC S ec tor: O ther s ervic es (44)]



6.9 RESEARCH, TECHNOLOGY AND INNOVATION (RTI)

Ithaslongbeenrecognisedthatinnovationisastrongdriverofeconomicgrowth,andthatwheninnovationtakesplacewithinaregionallocationitcanalsorealisethebenefitsofagglomerationandclustering.Researchandinnovationwithinparticularspheresofcommercialactivityleadtocompetitiveadvantagebeingdevelopedinthatindustrytogetherwithaskilledworkforcewhichsupportanddeveloptheindustrytothemutualbenefitofall.

6.9.1 The Current Status of the OP Sector – RTI

TheDepartmentofScienceandTechnology(DST),nowknownastheDepartmentofScienceandInnovation,hasassistedinenablingresearchinmaritimeenvironmentalstudies.TheSouthAfricanMarineResearchandExplorationForum(SAMREF)hasbeenestablishedtofacilitatenewcollaborativeoffshorestudiestoincreaseknowledgeoftheoffshoremarineenvironmentrelatingtorenewableenergypotential,marinebiodiversityandecology,climatechangeandecosystemfunctioning,aswellasmitigatingthepolicyconflictbetweendevelopinganoilandgaseconomyandalowcarboneconomy.Fundinghasbeenprovidedtovariousresearchandacademicinstitutionsinordertoconductresearchtocontributetothebodyofknowledgeandassistthedevelopmentofthesixmainoceansectors.

CertainoftheProvincesHigherEducationInstitutions(HEIs)havebeenhighlyinvolvedandinvestedintheoceanscienceandmarinesectorofferingarangeofcoursesandproducinghighlevelsofresearchoutputinthesespheres.

Rhodes University currently has various departments working on marine related research. These departments include:

• DepartmentofZoologyandEntomology• DepartmentofIchthyologyandFisheriesScience• DepartmentofBiochemistryandMicrobiology

TheOceanSciencesCampuswasopenedinSeptemberof2017withtheaimofbeingahubforpostgraduateoceansciencesresearch,teachingandinnovation.Furthermore,themissionofthecampusistopromotesustainablelivelihoodsforcoastalcommunitiesthroughadequatelyresearchingthemarineenvironmentspotentialandstrikingabalancebetweenmarineresourcepreservationandresourceutilisation.

Duetotheirgeographiclocationandinstitutionalfocus,theUniversityofFortHareandWalterSisuluUniversitydonothavestrongfocusonmarinerelatedresearch,andthisisanareathatcouldpossiblybeinvestigatedforpotentialexpansioninfuture.

Seeappendix12.7foranoverviewoftheEasternCapeHigherEducationInstitutions(HEIs)whichareinvolvedinresearchandinnovationfortheoceaneconomy.


TheSouthAfricanMarineResearchandExplorationForum(SAMREF)wastoestablishaunitdedicatedtounderstandingandtakingadvantageoftheopportunitiesprovidedbyoilandgasexplorationactivitiesandplatforms.Furthermore,theprojectaimstofacilitateoffshorestudiesthatwouldincreaseSouthAfrica’sknowledgeoftheoffshoremarineenvironmentrelatedtorenewableenergypotential,marinebiodiversityandecology,climatechangeandecosystemfunctioning.



TheNationalResearchFoundation(NRF)hasalsobeeninvolvedinthepromotionandsupportofknowledgecreationforallofthesectorsthroughfunding,humanresourcedevelopmentandtheprovisionofthenecessaryresearchfacilitiesinordertofacilitatethecreationofknowledge,innovationanddevelopmentinallfieldsofscienceandtechnology.


DuetotherelativelateadditionofRITtotheOperationPhakisafortheOceanEconomyinSouthAfrica,thereisapaucityofspecificprojectswhichlinkdirectlytothesector.Itisanticipatedthatthiswillimproveinthenearfuture.CurrentlytheeconomicdetailsfortheSAMREFprojectarelistedasperthefollowingtable:

Table 47: Ocean Sector: Research, Technology and Innovation




Table 48: Economic Impact Assessment – Research, Technology & Innovation


Capital Value (Rm)

Operating Jobs p.a.


1 S . A . M arine Res earc h and E x plorat ion F orum (S A M RE F ) E C 2021 35 15 20 2 Rhodes Univers ity - O c ean & M arit im e Res earc h M ak handa O ngoing3 Nels on M andela Univers ity (NM U) - O c ean & M arit im e Res earc h NM B M O ngoing4 W alter S is ulu Univers ity (W S U) - O c ean & M arit im e Res earc h E L O ngoing5 F ort Hare Univers ity - O c ean & M arit im e Res earc h F ort Hare O ngoing6789

10Totals 1 35 15 20

Research, Development and Innovation Project Name.

Research, Development & Innovation (Rand Millions). [R e a l va lu e , 'D e fla te d ' b a ck - Jo b s ]


Source: R a n d In te rn a tio n a l C a p ita l C a lcu la tio n s (2 0 1 9 ) [ IDC S ec tor: B us ines s s ervic es (42)]




ByrecognisingthatthisOceansEconomysectorhasthepotentialtoprovideanextremelystrongstimulustotheentireprovincialeconomicinitiative,dueattentionneedstobepaidtoensuringthattractionisgainedinitsimplementation


• EnsuringthattheprovinceisrepresentedatthenationalforumsofDST,SAMREFandtheNRF,• Encouragingtheprovincialtertiaryinstitutionstofocusonproducingacademicresearchwhichfocusesonandad-

dressesmeaningfulissueswhicharearisinginthedialoguearoundtheOceanEconomy,• EnsuringthatcommunityissuesaroundtheoceaneconomyareaddressedandthatwaysofincludingSMMEsand

previouslymarginalisedcommunitiesintotheoceaneconomyareexploredandimplemented.



6.10 SUMMARY OF EASTERN CAPE OCEAN ECONOMY BASELINE PROJECTS

TheseeightpriorityprojectareasasdefinedbytheoriginalOperationPhakisaLabshaverenderedasetofcurrentandcredibleEasternCapeOceanEconomyprojectswhichcannowbeanalysedinmoredetailifthisisdeemednecessary,andbeusedintheprocesstodevelopanindustry‘RoadMap’andcoherentstrategywhichcanbeusedformeaningfulimplementationagainstdemonstrableandmeasurablegoals.

Thestakeholderengagementprocessresultedinimportantinformationbeingcollectedandcollated,certainoftheseintheformofa‘ProjectBook’aspertheexamplesinchapter8hereafter.TheseprojectshavebeenanalysedatahighlevelintheprecedingsectionsandtheprojectdetailsincorporatedintoaprojectdatabasewhichrecordstheprojectdetailsoveratwentyyeartimeframetomatchtheEasternCapeOceanEconomybaseline,andcurrentlyhasrecordedfifty-nineprojectswithintheeightOperationPhakisaeconomicsectorsandenablersasfollows:

Table 49: Priority Projects Identified for the Eastern Cape Ocean Economy

TheearliersectionsofthisreporthighlightedtheprocesswhichhasbeenfollowedtoproduceatwentyyeareconomicforecastofthemajoreconomicsectorsaccordingtotheinternationallyrecognisedStandardIndustrialClassification(SIC)codes,forboththeSouthAfricannationaleconomyandtheEasternCapeprovincialeconomy,togetherwiththeHoskingbasedmethodologyinordertodefinetheOceanEconomyinthecontextofthesetwoeconomicforecasts.



New EC Ocean Projects - % 100.0% 100.0% 100.0% 100.0%1. M arine Trans port & M anu. 2.77% 2.98% 1.54% 13.56%2. O ffs hore O il & G as 71.10% 52.06% 8.54% 13.56%3. A quac ulture 2.95% 27.26% 71.99% 15.25%4. M arine P rotec t ion & G ovt. 0.18% 0.61% 0.27% 6.78%5. S m all Harbour Developm ent 4.55% 6.10% 2.76% 20.34%6. Coas tal & M arine Touris m 18.36% 10.57% 14.39% 15.25%7. S k ills Developm ent 0.05% 0.31% 0.46% 11.86%8. Res earc h & Innovat ion 0.04% 0.11% 0.05% 1.69%9. O ther O c ean E c onom y 0.00% 0.01% 0.00% 1.69%




Inadditiontothisprocess,theOperationPhakisaLabsworkof2014and2015culminatedinaschedulewhichforecastthenationalOceanEconomyintermsofbothGrossDomesticProductandemploymentcreationoveratwentyyeartimeframetotheyear2033.ThisdatahasdifferedsubstantiallyfromtheoutsetwiththeHoskingbasedeconomicmodel,andthusbyimplicationwiththedatarecordedinthisreport.Uponfurtherinvestigationithasbeendeterminedthatthesevariancescanbereconciledas‘Unaccountedfordata’whichisdueeithertocertaineconomicareasordomainsnothavebeenincludedorstudiedinsufficientdetail,andthattheindirectandinducedeconomicimpactsofthefullvaluechainforvariouseconomicactivitieshadnotbeenconsidered.

ThisprocessculminatedintheestablishmentofanOceanEconomybaselinefortheEasternCapewhichisthetheoreticaltrajectorythatthissectorshouldfollowwithallthingsbeingequal,ora‘BusinessAsUsual’situation. TheevaluationofthecurrentprojectswithintheeightOperationPhakisaeconomicsectorshasbeeninordertodeterminewhetherthecurrentpipelineofprojectsissufficienttomeetandmaintaintheseeconomicexpectations,andifnot,whatthemarginofsurplusofdeficitisforbothGrossDomesticProductandemploymentopportunities.Thehasrequiredthattheprojectdetailsforeachofthesefifty-nineprojectsberecordedandextrapolatedoveratwentyyeartimeframe,withprojectcommencementdates,projectcapitalexpenditurevaluestoimplement,thecommencementdateforoperations,thevalueofoperationsorbenefitsuponcommencement,andthedirectformalemploymentopportunitiescreatedfromoperations.

ThisdatasetfortheeighteconomicsectorsconsideredhasallowedaGrossDomesticProductanddirectformalemploymentcreationprofileoverthetwenty-yeartimeframetobeformulated,whichcannowbejuxtaposedagainstthebaselineestablished.

The results of this process are indicated in the figures below:

Figure 9: Eastern Cape Ocean Economy – GDP and Employment Projection

Source: Economic Model developed for the Eastern Cape Ocean Economy study, 2019.



ThisdatahasbeenmatchedtotheSouthAfricanGovernmentMediumTermExpenditureFrameworkwiththecurrentfive-yearreportingperiodendingin2024,hencethefirstbatchofdatabeingindexedtoyearsix,2024.

Important issues to take note of from the data portrayed are as follows:

• TheEasternCapeOperationPhakisaBaselinedata(Blueline)forbothGDPandEmploymentcommencesfromthe2019baselinepositionandincreasessteadilyoverthetwentyyearforecast.

• TheEasternCapeOceanEconomyprojectscommencefromazerobasein2019,whichisnotstrictlycorrectanda‘stocktake’ofexistingprojects,orprojectscurrentlyintheimplementationphaseshouldbeundertakentocorrectthis.

• TheEasternCapeOceanEconomyGDPandCapitalExpenditure(CAPEX)profilerisesdramaticallyoverthefirstfiveyearsastheparcelofprojectsbeingcontemplatedis‘implemented’,withhighstart-upcostsintheinitialinfrastruc-tureexpenditurestage,beforethisdatasettlesdownintooperatingrevenueandGDPfromyeartenonwards.TheprojectGDPdataremainsabovetheEasternCapeOperationPhakisaBaselinethroughoutonceithasmovedpastthisbaselineinyeartwotothree.

• TheEasternCapeOceanEconomyEmploymentprofilerisesslowlyoverthefirstfiveyearsastheparcelofprojectsbe-ingcontemplatedis‘implemented’,withlowoperatingemploymentatthisstage.[Constructionemploymenthasnotbeenconsideredinthisanalysisasthesearenotseenassustainableemploymentopportunities,andaretemporaryinnature.]Duringyearssixtotentheoperatingemploymentjobsincreaseswiftlyasthesuiteofprojectscontemplatedareconstructedandbecomeoperational.Fromyeartenonwardstherearegradualincreasesinemploymentinlinewithinflationbasedgrowthasemploymenttracksoperationalincreasesthroughinflation.

• TheOceanEconomyemploymentanalysisundertakenherefortheseprojectshasonlytakencognisanceofthedirectemploymentopportunitiesinmostinstances,withonlyafewoftheprojectsfullvaluechainimpactsevaluatedand•ConstructionimpactsfortheimplementationofthesecapitalexpenditureprojectsisreporteduponinthefollowingsectionunderEconomicImpactAssessment.

ThesetwodatasetsprovideanimportantandholisticoverviewoftheEasternCapeOceanEconomybothfromtheposi-tionofitspuretheoreticalcontextaspertheHoskingbasedeconomicforecast,aswellasfromtheperspectiveofamoretangiblerecordingoftheactualprojectswhicharecurrentlybeingconsideredintheprovince.



7 PORTS & TRANSNET AS AN ECONOMIC ROLE-PLAYER ThissectionexplorestheimportantrolethatTransnetNationalPortsAuthorityplaysintheOceanEconomyspaceinSouthAfricaandtheEasternCapewithitsthreecommercialports.

7.1 TRANSNET AND FREIGHT LOGISTICS IN SOUTH AFRICA

TransnetisthecustodianofSouthAfrica’sports,railandpipelines,witharangeofsupportingservices,withtheirobjectivebeingtoensureagloballycompetitivefreightsystemthatenablessustainedgrowthanddiversificationofthecountry’seconomy.

TransnetNationalPortsAuthority(TNPA)isresponsibleforthesafe,efficientandeffectiveeconomicfunctioningofthenationalportssystem,whichitmanages,controlsandadministersonbehalfofthestate,itssoleshareholder,theSouthAfricanGovernment.TransnetPortTerminals(TPT)isresponsibleforcargohandlingandlogisticsmanagementsolutions,togetherwithTransnetFreightRail(TFR)whichoperatesfreighttrainsservingcustomersinmining,manufacturing,agriculture,forestry,containersandautomotiveproducts,amongstothers.TransnetPipelinesensuresthesecurityofsupplyofenergyproductsthroughitsnetworkofundergroundpipelines.

ThecentralportsofSouthAfricaplayauniqueroleinservingtheEasternCapehinterland.Traditionally,thePortofPortElizabethhandledmostofthecargointheregion.

WiththePortofNgqurabecomingoperational,theroleofPortElizabethischangingfrombeingtheprimarycentralporttooneprovidingcomplementaryservicestoNgqura. Intheshortterm,rationalisationofactivitieswillseemanganeseexportsandliquidbulkimportsmovedtothePortofNgqura,whilethePortofPortElizabethandEastLondonwillcontinuetohandlesignificantvolumesofcontainersandvehicles.

Thiscreatesopportunitiesforboththepublicandprivatesectortoembarkuponprojectswhichareeitherrelatedordependentuponthissuiteoflogisticalservices.TheEasternCapenetworkofportsisillustratedinthefigurealongside.



Figure 10: Eastern Cape Ports in a National Context

Source: Transnet, 2017. National Ports Plan. 2017 Update.



Theportsandfreightlogisticsvaluechainisknowntoberelativelydiverseandcomplicated,withanumberofrelated,interlinked,supportive,backwardandforwardlinkagesforbothprivatesectorservicesandstateoperatedservices.

These services and their relevance to the general flow of cargo both inwards and outwards of a country through its port system are illustrated in the following figure:

Figure 11: Ports Service Value Chain – Import and Export Cargo



7.2 TRANSNET PORT DEVELOPMENT FRAMEWORK PLANS (PDFP)

TheSouthAfricanports,underthejurisdictionofTransnetNationalPortAuthority(TNPA),formanintegratednationaltransportationfreightinterfaceforregionalandinternationalmaritimetrade.Quaysidefreightmovementsaresupportedbyarangeofothertransportationsectoreconomicactivitiesfromwarehousing,insurance,landsidetransportation,supportingsupplierretailandrepairamongothers,allformcriticalcomponentsofthecomplicatedvalue-chainofmaritimecommercialactivities.

TheSouthAfricanportshavethroughdetailedplanningprocessesliketheNationalPortsPlan(NPP)andthePortDevelopmentFrameworkPlans(PDFPs)allfocusedonmaximisingfreighthandlingcapacity,andretainedpocketsofmaritimecommercialzonedlandwithinportboundariesinordertoretaincontroloverthisland.

WSPpreparedapositionpaperin2015forTransnetinordertoidentifysuitablemaritimecommercialopportunitiesthataligntoeachPort’suniquefreightfootprintandlocaleconomichinterlandcurrentactivitiesandopportunitiesthatcouldberealisedonthesesites.

They have explained their methodological approach in the Maritime Commercial Position Paper (MCPP) as follows:

‘Economicgrowthisafunctionoftheoptimaluseofscarceresources,inthisinstance,portland.ThefuturecompetitivenessoftheSAPortsystemandinfrastructurewillbeinfluencedbyoptimisinglanduseswithineachPort,andaligningmaritimecommercialactivitiestofreightandoperationalefficiencies.ThustheMCPPaimstoassistidentifypotentialportactivitiesthatmakethemostefficientlanduseforeachindividualport’smaritimecommercialzonedareas;andthatbestalignstotheuniquecommercialmarketinfluencesfacingeachport.’(WSP,2015)

The MCPP has considered six key informants drawn from national maritime and economic policy that guide future maritime commercial planning as follows:-

1. Coherentlandusesupportingportoperationalefficiency,2. Supportmaritimejobcreation,3. Deepeningofthe‘MaritimeEconomy’,4. Portandporthinterlandenhancedlinkages,5. Maritimetourism.Infrastructureandservicedevelopment,and6. ‘PeoplesPort’accessibility.



The specific port related activities which were identified for each port are as follows:

Table 50: Port Based Activities Identified for the Eastern Cape Ocean Economy

PORT OPPORTUNITIES

PortElizabeth• Marine/WaterfrontlinkedtotherelocationoftheManganeseOreTerminalandTankFarm• Casino/Retail/Entertainmentwillhelptoencouragesustainabletourism• AutomotiveLogisticsParkdrivenbyVolkswagenSouthAfrica

Ngqura

• LinkagestoIDZ/SEZspecialistclearingfacilities• Containercleaningandstorage• Oil&GasHub,PowerGeneration,Valuechainopportunities• Distributioncenters• Coldstorageandpackhousefacilitiesformeatproductexports

EastLondon

• Shipbuilding/Repair• Marina/Waterfront• Casino/Retail/Entertainment• AutomotiveLogisticsPark• MaritimeSchool/Institution

Source: WSP, 2015. Maritime Commercial Position Paper



7.3 THE 2017 PORT DEVELOPMENT FRAMEWORK PLAN (PDFP)

TheNationalPortsAct(2005)prescribesthattheNationalPortsAuthorityistoprepareandperiodicallyupdateaPortDe-velopmentFrameworkPlan(PDFP)foreachport.Thisprocessensuresthatthedevelopmentplansremaincurrent,remainalignedwithnationalpoliciesandremaininclusiveofchangesintheports’environment.Thecreationofnewcapacityintheports’systemresultsfromtheimplementationofthePortDevelopmentFrameworkPlans.

ThePDFPswerereviewedwithinthecontextofthelatestcargodemandforecasts.Asaresultofthisreviewthegazettedportlimits,berthsandprecinctslayouts,capacityassessmentandfinallythePDFPswereupdated.WhilstthePDFPshaveremainedlargelyunchangedfromthe2017Update,notablechangesthatweremademaybesummarizedasfollows:

• TheprovisionofLNGimportfacilities,aspartoftheDepartmentofEnergy(DoE)gas-to-powerprogramme,forRichardsBay,NgquraandSaldanhaBayarenewdevelopments.TheRichardsBayfacilityisplannedfortheshort-term,whilsttheSaldanhaBayandNgqurafacilitiesareplannedforthemedium-term.

• TheMaritimeEngineeringandMaritimeCommercialactivitieswereupdatedaspartofOperationPhakisa.NewplansforMaritimeEngineeringincludeafloatingdrydockfacilityinRichardsBayandincreasedlanduseinSaldanhaBay,PortElizabeth,EastLondon,NgquraandCapeTown.NewplansforMaritimeCommercialfacilitiesincludeexpansionuptheBuffaloRiverinEastLondon,newwaterfrontdevelopmentinMosselBayandimprovementstocruiselinerfacilitiesatDurbanandPortElizabeth.

• Thelatestdemandforecastsindicatethatcargodemandhasgenerallydeclinedsincethe2017update.Thishasre-sultedinnon-criticalprojectsbeingdeferred.NotableprojectsthatweredeferredincludetheLiquidBulkexpansioninDurbanandaportionofthemanganeseexpansionatNgqura.



7.4 TRANSNET AND FREIGHT LOGISTICS IN THE EASTERN CAPE

IntermsofthePortDevelopmentFrameworkPlansfortheEasternCapeallthreeportshavebeenconsideredforexpansionopportunitiesandthecurrentlayoutandlong-termlayoutsforthirtyyearshenceareillustratedinthefigurebelow.

Figure 12: Ports Development Framework Plan (PDFP) for the Eastern Cape



Thecargoflowswhichareexpectedtodrivetheseexpansionplanshavebeenformulatedinthirtyyearforecastsforeachportandarebaseduponthefollowingportinfrastructuredriversandcapacities.

Table 51: Eastern Cape Ports Infrastructure and Capacity

PORT CARGO TYPE NUMBER OF BERTHS

ACTUAL VOLUME

2016/2017

INSTALLED BERTH

CAPACITY

THEORETICAL BERTH

CAPACITY

LATENT BERTH

CAPACITYUNIT

Port Elizabeth

Containers 2 159241* 400000 600000 440759 TEUs/year

BreakBulk 3 601814 1600000 1600000 998186 Tons/year

Automotive 1 115627 240000 410000 294373 Units/year

LiquidBulk 1 939771 3000000 3000000 2060229 Kilolitres/year

Manganese 1 7446310 6000000 6000000 -1446310** Tons/year

NgquraContainers 4 605406 1500000 2000000 1394594 TEUs/year

MPT 3 72139 2750000 6000000 5927861 Tons/year

East London

Containers*** 2 67895 100000 200000 132105 TEUs/year

BreakBulk 4 14954 570000 570000 555046 Tons/year

Automotive 2 109020 130000 790000 680980 Units/year

LiquidBulk 1 916678 3000000 3000000 2083322 Kilolitres/year

DryBulk 2 306885 984000 2000000 1693115 Tons/year

Source: Transnet, 2017. National Ports Plan. 2017 Update

*Atotalof44206skiptainers(manganese)wereadditionallyhandled.

**Excessmanganesevolumeswerehandledinskiptainers.

***ContainersarehandledattheBreakBulk/Multi-PurposeTerminal(MPT)berths

TheprojectedcargovolumesforthethreeEasternCapeportsforthetopcargotypesareillustratedinthecombinedgraphicsbelow,indicatingthecapacityceilingswhichhavebeenconsideredwhendesigningtheportlayouts.



Table 52: Eastern Cape Ports Cargo Volumes and Capacity



Table 52: Eastern Cape Ports Cargo Volumes and Capacity continued



7.5 EASTERN CAPE PORTS AND OPERATION PHAKISA

TransnetandTransnetNationalPortsAuthorityforthethreeregionalportsbasedintheEasternCapeareconstantlyevaluatingandimplementinginfrastructureprojectsofacapitalnature,operationalimprovementsandskills,trainingandcapacitybuildingexercisesinordertoimprovetheirefficienciesandmaximisetheuseoftheiroperatingassetsandprofitability.

ThismeansthattheseprojectswouldhaveoccurredwhetherOperationPhakisawasestablishedornot.Whatisimportantforthesakeofthisstudyistodeterminewhichoftheseprojectsofferopportunitiesfurtheralongthevaluechain,eitherforotherorrelatedstateownedentities,offortheprivatesectortoundertaketheseprojects,eitherontheirownorintheformofapublicprivatepartnership.



8 A ‘PROJECT BOOK’ OF PRIME EC OE PROJECTSInordertobeabletoprepareforaninvestorsconference,provisionallybeingconsideredforSeptember2019,itispreferabletohavepreparedasuite‘InformationMemorandum’or‘BidBooks’forevaluationbypotentialinvestors,projectpartners,stakeholdersorfundersofthevariousEasternCapeOceanEconomyprojects.Theseprojectsshouldbe‘investmentready’andmerelyneedthecorrectstakeholdersandfundinginordertoformtherequiredpartnershipsorinstitutionalarrangementstomovetowardsimplementation

8.1 THE ‘BID BOOK’ STRUCTURE AND CONTENT ADOPTED FOR TOP-TEN’ EC OE PROJECTS

Thefollowingbroadstructurewasadoptedtoformulatethe‘BidBook’structureandcontent.

Table 53: Bid Book - Ocean Economy Project Description & Key Metrics

# LABEL NARRATIVE

1 ProjectName

2 ProjectLocation

3 ProjectOwner/Driver Whoispromotingtheproject.

4 BriefProjectOverview[Natureorfunction,primarypurpose,serviceorclients,rationale]

Whatistheprimaryobjectiveoftheproject?Whoaretheultimateclients,usersorbeneficiaries?Whatgoodsorservicesisitseenasproviding?Whyistherethisneed,andwhatwilltheprojectultimatelyachieve?Whatisthebenefittosociety,oraparticularuserorgroup?Anyotherrelevantinformation…

5 CapitalValue[Rm] Thetotalvaluefortheimplementationoverthewholeprojecthorizonuntileffectivecommissioningoropeningoftheprojectorfacility.

6 Construction Start Date

7 ConstructionsJobsp.a. FullTimeEquivalent(FTE)jobs,inotherwords,anemploymentpositionforthedurationofayear.Ifthatpersondoesthesamejobfortwoyears,thenitisrecordedas‘TwoFTE’.

8 Operation Start Date

9 OperatingCostsp.a. Whattheoperatingcostsfortheprojectareperyear,onceitisoperationalandinnormalsteadystate.

10 OperatingJobsp.a. TheFTEoperatingjobsthatarerequiredtooperatetheprojectorfacilityinanyonenormalyearofoperations.



# LABEL NARRATIVE

11 TurnoverorValue(GVA) Thevaluethattheprojectgeneratesinanyonenormalandstabilisedyear.Thiswouldbetheturnoverinthecaseofabusiness,thegatefeesforamuseum,themarketingrights,thefreightcharges,orthetourismpotentialthatitunlocks.Aroadmayhavemanyindirectbenefitswhichneedtobeconsidered.

12 EconomicLinkages Toanyotherindustries.Supplierinputs,supportindustries,enablingindustries

13 ‘Lever’to‘Unlock’ Hastheprojectorinitiativebecomeblockedorstuckinsomeformofbureaucratic,legislativeorpoliticalimpasse.Who,whatorhowcanthisimpasseberesolved.Whatsortofaninterventionisrequired.

14 AnyOtherPoints

15 ProjectMaporImage,orboth.

Ideallyamaptoindicatewhereitislocatedwithreferencetoatown,featureinthetown,roadnetworkorthelike.

Animageofthecompletedproject.Ideallyitshouldindicateitsfunctionorpurpose.



8.1.1 Bid Book – Bayworld Oceanarium & Museum Complex

TheEasternCapeOceanEconomyhighlevelprofileandeconomicsummaryofthisprojectiscontainedinthetablehereafter

Table 54: Bid Book – Bayworld Project Description - NMB

# LABEL NARRATIVE

1 ProjectName BayworldPrecinct2020

2 ProjectLocation NelsonMandelaBayMunicipality(NMBM),Humewoodbeachfront.

3 ProjectOwner/Driver TheMandelaBayDevelopmentAgency(MBDA)MsDorelleSapere(ProjectManager)andMrAshrafAdam(CEO)


TheMBDAhasbeenmandatedbytheNelsonMandelaBayMetropolitanMunicipal-ityasatransdisciplinaryimplementingagentforprogrammes,projectsandeventswithin its6mandatedareas,whicharetobealignedtothevariousplansoftheNMBM.

TheHappyValleyProgrammewhichincludesTelkomPark,BayworldandthegreenlungofHappyValleyitself,isonesuchprogrammewhichislocatedwithinthePECENTRAL/BAAKENS/HAPPYVALLEYmandatearea.

TheMBDAhasrecognisedthattheHappyValleyPrecinct,whenlinkedtotheBaak-ensValleyDevelopmentandProposedWaterfront,isuniquelypositionedtobecomeanew,inclusiveheartforNelsonMandelaBayandhasapproachedtheredevelop-mentwiththatobjective.The intent isthattheprecinctshouldbesocially,spa-tiallyandeconomicallytransformedintoaninclusive,post-apartheidprecinctthatenablesmulti-generational,multi-cultural andmixed incomeusages. It isenvis-agedthatauniquetourismopportunitywillbecreatedthroughtheactivationofthegreenlung,anICCdevelopedwithintheprecinct,Bayworldberepurposedandthataninclusivehousingdevelopmentbepartofanewmodelfortheprecinct.Theopportunityofdevelopingtheprecinctasagreen,smartandoffthegriddestina-tionwillbepursued.

5 CapitalValue[Rm] AwaitingestimatesfromMsDorelleSapere

6 Construction Start Date AwaitingestimatesfromMsDorelleSapere

7 ConstructionsJobsp.a. AwaitingestimatesfromMsDorelleSapere

8 Operation Start Date AwaitingestimatesfromMsDorelleSapere

9 OperatingCostsp.a. AwaitingestimatesfromMsDorelleSapere

10 OperatingJobsp.a. AwaitingestimatesfromMsDorelleSapere

11 TurnoverorValue(GVA) AwaitingestimatesfromMsDorelleSapere



# LABEL NARRATIVE

12 EconomicLinkages Acriticaleconomicandsocialtransformationassetasanintegralpartofthetouristexperience:• OnemoredayfromADDOInternationalVisitors• CurrentinternationalvisitorstoAddo=216 000visitors/annum• Averagespendpervisitor=R5000.(conservatively)• Totaldirectspend=R1,080billion• Usingalowfactorof3Xdirectspend=R3,240billion• Usingahighfactorof7xdirectspend=R7,560billion

13 ‘Lever’to‘Unlock’ • Aco-operativegovernanceagreementwassignedinJune2016betweenEPDS-RACandNMBMuntilMarch2021;

• InordertofacilitateaWorldClassTouristAttractionandFlagshipHeritageInsti-tution;

• “Project”means the redevelopment andmanagement of the Oceanarium andSnakepark;EPSRACwillcontinuetofundexistingpersonnelwithintheapprovedorganisationalstructureofBayworld;

• NMBMtorecommendasustainableoperatingmodelandprovideadditionalfund-ingforBayworld’sinfrastructure;

• Asteering committeewas establishedon 11 September 2018:-SRACnNMBM,MBDA,NMUDoE,DST,ECDC,NMBBC,DEDEAT

• FundinghasbeensecuredinanamountofR____14 AnyOtherPoints Vision:BayworldasaWorldClassYouristAttractionandFlagshipHeritageInsitu-

tion;

Mission: Create a spectacular, iconic place that is the headquarters of aNelsonMandela Bay EcoTourism experience, rooted in the heritage and culture of theEasternProvincethatwilldriveconservationandeconomicdevelopment.

Objectives:1.DriveeconomicdevelopmentandwidespreadjobcreationfortheNelsonmandelaBayandtheprovincethroughtourism,scienceandopportunitieswithintheoceanseconomy;2.Unlockthegreen,built andculturalheritageof theprovinceandmake itworkspatially,sociallyandeconomically;3.Packagethewealthoftoursimofferingsoftheprovinceandprovideaccesstothembyprovidingadigitalexperienceofeachandfollowupwithexperiencesinthewild;4.Conservetheterrestrialandoceansdio-diversity;5.Driveupeducation,knowledge,disseminationandresearchprogrammethatwillsimulateminds;6.Enablesocialcohesionthroughaccesstotheexperiencebymultiage,multi-cul-turalandmulti-economicgroupsfromtheNMBMandEasternCapeProvince;7.Focusonlocalandattractinternational.



8.1.1 Bid Book – Gas-To- Power Project for Coega SEZ

TheEasternCapeOceanEconomyhighlevelprofileandeconomicsummaryofthisprojectiscontainedinthetablehereafter.

Table 55: Bid Book – Gas-To-Power Project Description

# LABEL NARRATIVE

1 ProjectName 1,000Megawatt(MW)Gas-to-Power(GTP)project

2 ProjectLocation CoegaSpecialEconomicZone(SEZ),nearthePortofNgqura

3 ProjectOwner/Driver DepartmentofEconomicDevelopment,EnvironmentalAffairs andTourism (DEDEAT),Eastern Cape


TheEasternCapeandtheSouthernCoastlinecurrentlyhasthehighestpotentialreservesofnaturalgasinSouthAfrica.Themostdesiredoutcomewouldbetobeneficiatethegaslocallybeforeexportingitelsewhere.LargereserveshavebeenfoundatBrulpaddaofthesouthern coast.

Coega/Ngquracurrentlyhastheadvantageofhavingtechnicalreadinessforthecreationof a 1,000 MW gas-to-power project, however national decision making seems to bealignedtowardsRichardsBayfora3,000MWpowerplantandmulti-purposegashub.

5 CapitalValue[Rm] R25billioninvestmentvalue


AwaitinginformationfromDEDEAT

7 ConstructionsJobsp.a. 8,500jobsatconstruction(Durationnotspecified)

8 Operation Start Date AwaitinginformationfromDEDEAT

9 OperatingCostsp.a. AwaitinginformationfromDEDEAT

10 OperatingJobsp.a. AwaitinginformationfromDEDEAT

11 TurnoverorValue(GVA) AwaitinginformationfromDEDEAT

12 EconomicLinkages Theestablishmentofthe1,000MWGas-to-Powerplantwill leadtosecurityofpowersupplybothlocallyandnationally.Theprojectwillhaveapositiveimpactontheeconomiccontributionoftheregion.

13 ‘Lever’to‘Unlock’ ThekeytounlockingtheprojectwouldbetocreateagashubatCoega/Ngqurawhichwouldbeanchoredaroundthe1,000MWGas-to-Powerproject.Thiswouldalsoinvolvetheshort-termimportsofLNG.



8.1.2 Bid Book – Tilapia Aquaculture


Table 56: Bid Book – Marine Tilapia Aquaculture

# LABEL NARRATIVE

1 ProjectName MarineTilapiaIndustryIncubator(MTII)

2 ProjectLocation EasternCapeandKZN,trialinQholothaADZ

3 ProjectOwner/Driver THAPIAquaKulcha(Pty)Ltd


Theraisond’êtreoftheMTIIistopromoteandsupportthedevelopmentofalarge-scale and inclusive marine tilapia farming industry rurally-anchored along thesub-tropicalcoastaleasternseaboardofSouthAfrica.

Thereisanincreaseintheconsumptionof“whitefish”inSAandtheaquacultureindustryisabletomakeuptheshortfallsinaffordablewhitefishsupply.IncreasedexportsofcertifiedCapehakehasprecipitatedincreasedpricepressureonourfinite marine fisheries resources in recent years, resulting in imports of sub-standardChinesepondfarmedtilapiaandPangasiusspp. (tra/basa) intoSouthAfricatofillthegrowingsupply-demandgapforamoreaffordable(R20-30/kgatretail)whitefishspeciesalternatives.

MarinecultivatedtilapiaalongtheEasternCapecoastlineusingBioflocTechnology(BFT)–seeimagebelow-isaimedatimportreplacementtargetingtheaffordablewhitefishcategoryinSouthernAfricawhereprojectedsupplyshortfallsareintherange29,000to42,000tonnesperannumbytheearly2020’s

5 CapitalValue[Rm] TobedeterminedbytheProjectSponsor

6 Construction Start Date TobedeterminedbytheProjectSponsor

7 ConstructionsJobsp.a. TobedeterminedbytheProjectSponsor

8 Operation Start Date 2020

9 OperatingCostsp.a. ApproximatelyR3billionperannumbytheyear2032

10 OperatingJobsp.a. Approximately4,700jobsbytheyear2032

11 TurnoverorValue(GVA) Approximately R 3.4 billion per annum by the year 2032 (100,000 tons of liveweightmarinetilapia)

12 EconomicLinkages Anextensivevaluechainbasedonproductflowfrom rural farmersthroughtoprocessing,packagingandexport.

13 ‘Lever’to‘Unlock’

14 AnyOtherPoints



8.1.4 Bid Book – Freshwater Catfish (Barble) – Karoo Catch


Table 57: Bid Book – Freshwater Catfish – Karoo Catch

# LABEL NARRATIVE

1 ProjectName FreshwaterCatfishFarming[KarooCatch(Pty)Ltd]

2 ProjectLocation Graaff-Reinet,EasternCape,SouthAfrica

3 ProjectOwner/Driver DepartmentofEnvironmentalAffairs(DEA)


KarooCatchisafreshwatercatfishaquaculturefarmsituatedinGraafReinettinthe Eastern Cape.

Following10yearsofresearch,developmentandpiloting,thecurrentinterventionfocusesontheestablishmentofacommerciallyviablebusinessunit(incubator)andlong-termsupportfordevelopment,expansionandreplication,aimingtosupplementstaplediets,decreaseimportrequirementsandsimultaneouslycreateemploymentopportunities.Todatetheprojecthasgrowntocommercialisationphasewith102full-timeemployeesfromthelocalcommunity.Ithascompletedthebuildingofthreenewtunnels,bringingthetotalproductioncapacityto120tonspermonth;newfarmandhatcherymanagementwereappointedandtheconstructionofalargeprocessingfactoryonsitewillbecompletedinJanuary2019.

KarooCatchhasdevelopedarangeofconsumerproductswhicharenutritiousfishbasedproductsforeverydayconsumptionthatareeasytoprepare,theseinclude‘fishwors’,‘braaiwors’and‘fishburgers’madefromcatfishmince(clarias).Thecatfishisprocessed,packagedandsoldtoarangeofcustomers,inclusiveofretail,wholesale,traders,andbulkmarkets.

5 CapitalValue[Rm] Foronecommerciallyviableunit:Investmentrequired–R180millionCapitalbudget–R131millionperproductionunit


7 ConstructionsJobsp.a. TobesuppliedbytheProjectSponsor,

8 Operation Start Date TobesuppliedbytheProjectSponsor,

9 OperatingCostsp.a. TobesuppliedbytheProjectSponsor,

10 OperatingJobsp.a. 2,358total(direct,indirectandinduced)

11 TurnoverorValue(GVA) Foronecommerciallyviableunit:Annualturnover:R277million



# LABEL NARRATIVE

12 EconomicLinkages The primary aim of the project is to create sustainable self-employment ofruralwomenandfacilitateeconomicgrowth.Thiswillbeachievedthroughtheestablishmentofaquacultureclusters,eachconsistingofacentralmanagementfarmandanetworkofsatellitefarmingsystems.

13 ‘Lever’to‘Unlock’

14 AnyOtherPoints The project places high emphasis on the empowerment of rural communities,specificallywomenandyouthandpreviouslydisadvantaged

15 Allimagessourcedfrom:https://www.karoo-catch.co.za



8.1.3 N2 Wild Coast Biodiversity Offset Project

# LABEL NARRATIVE

1 ProjectName N2WildCoastBiodiversityOffset

2 ProjectLocation WildCoastregion(fromuMtamvunatouMzimvubuRivers)

3 ProjectOwner/Driver EasternCapeParksandTourismAgency

4 BriefProjectOverview(natureofthefunction,primarypurpose,serviceorclient’srationale)

AsrequiredbytheEnvironmentalAuthorisation,intermsoftheenvironmentconservationact,1989,TheprojectaimstocounterbalanceanyresidualbiodiversitylossassociatedtotheN2WildCoastHighwayafterappropriatepreventionandmitigationmeasureshavebeentaken.

5 CapitalValue(Rm) R373,881,852-00investmentvalueover10years.

6 Construction Start Date 01June2018

7 ConstructionJobs(PerAnnum) Tobedeterminedaftertheprojectmanagementhavebeencompleted,approximatelyintheyear2021.

8 Operational Start Date Tobedeterminedaftertheprojectmanagementhavebeencompleted,approximatelyintheyear2021.

9 OperatingCost(PerAnnum) ApproximatelyR15,000,00-00

10 OperatingJob(PerAnnum) Tobedeterminedaftertheprojectmanagementhavebeencompleted,approximatelyintheyear2021.

11 TurnoverorValue(GrossValueAdd)

Tobedeterminedaftertheprojectmanagementhavebeencompleted,approximatelyintheyear2021.

12 EconomicLinkages Determinesmallbusinessesforsocio-economicbeneficiationopportunitieslinkedtotherehabilitationprogramme.HighnaturalendowmentoftheMsikaba&MthentuGorges,VultureColonyandMagwaFallslinkedwiththeN2WildCoastHighwayfortourismopportunities.

13 “Lever”to“Unlock Facilitatepartnershipsandinvestmentsrequiredtoachievelong-termsustainabilityoftheoffset-receivingsitesbydevelopingappropriatebusinessplanswheretheapplicableinstitutionalandgovernanceframeworkswillsupportthesustainableoperations.



8.1.4 Mkambati Community Project Nature Reserve

# LABEL NARRATIVE

1 ProjectName MkambatiCommunityPublicPrivatePartnership

2 ProjectLocation MkambatiNatureReserve

3 ProjectOwner/Driver ColinBell(MkambatiMatters)

4 BriefProjectOverview(natureoffunction,primarypurpose,serviceorclient’srationale)

TheprojectisapartnershipbetweenCommunity(MkambatiLandTrust),Government(ECPTA)andInvestor(MkambatiMatters)&isa49yearlease.Thepurposeoftheprojectforthelocaleconomicdevelopmentwhichwillprovidejobs,capacitybuildingandbetterlivelihoodthroughadditionalprojectsontheprojectrentals.ThiswillbethroughTourismfacilitiestobebuiltwhicharethelodgesandvillas

5 CapitalValue(Rm) R200m

6 Construction Start Date August2019

7 ConstructionJobs(p.a.) 110jobs

8 Operational Start Date December2020

9 OperatingCost(p.a.) ±R5million

10 OperatingJob(p.a.) 65jobs


±R10million

12 EconomicLinkages N2TollRoad,WildCoastDevelopmentInitiatives,OperationPhakisa–OceansEconomy

13 “Lever”to“Unlock Additionalfundingcommitment.Improvementofaccessroadstothereserve.Unlockingofothercomplimentaryfacilitiesandactivities



8.1.5 Coastal Infrastructure Development on Selected Beaches

# LABEL NARRATIVE

1 ProjectName CoastalInfrastructureDevelopmentonselectedbeaches

2 ProjectLocation Selectedbeaches,mainlyontheeasternsectionofEC.

3 ProjectOwner/Driver LocalMunicipalitiesatKSD,NgquzaHill,PortStJohnsandNdlamberespectively.

4 BriefProjectOverview(natureoffunction,primarypurpose,serviceorclient’srationale)

Theprojectseektodevelopandupgradethecoastalinfrastructureforselectedbeachesinordertoenhancethetourismpotentialfortheselectedbeachesaspartofthelegacyprojectswithinthejurisdictionofthelocalmunicipalities(namelyMbizana,PortStJohns,Nyandeni&NdlambeLocalMunicipalitiesrespectively).Theproposedinfrastructuredevelopmentprojectsincludes:• 6dayEasternCapehikingtraildevelopmentproject(hikersfacilitiesat

Hluleka,Mpande,Mngazana&Mngcibesites)• InfrastructuredevelopmentatselectedbeachesinPortAlfred(i.e.Krantz

recreationalarea,Middlebeachfacilities&Kowieriverembarkment)PlanningforbeachesatMbizana(i.e.MzambaandMthentubeaches)

5 CapitalValue(Rm) R21million

6 Construction Start Date TheprojectisawaitingtheapprovalofprojectplansbyNationalDepartmentofTourism.

7 ConstructionJobs(PerAnnum) Approximately50jobs

8 Operational Start Date Pendingapprovalofprojectplans

9 OperatingCost(PerAnnum) Notyetdetermined

10 OperatingJob(PerAnnum) Approximately10jobs


Notyetdetermined

12 EconomicLinkages Theproposedtourisminfrastructuredevelopmentattheselectedbeacheswillenhancethetourismpotentialoftheselectedsitesandwhichwillinturnresultsineconomicspinoffsforthesesites.TheconstructionphaseoftheseprojectswillresultsincreationoftemporaryjobopportunitiesforlocalsandSMMEsdevelopmentintheseareas.

13 “Lever”to“Unlock Tourismpotentialofthecoastaltourisminfrastructureontheselectedsites.



8.1.6 N2 Wild Coast Toll Road (N2WCR)

# LABEL NARRATIVE

1 ProjectName N2WildCoastRoad(N2WCR)

2 ProjectLocation BetweenEastLondonandPortEdward–410km

3 ProjectOwner/Driver SouthAfricanNationalRoadsAgencyLtd(SANRAL)


TheN2WCRformspartoftheGovernmentsStrategicIntegratedProjects(SIP-3:South-EasternnodeandCorridorDevelopment),whosekeypurposeistoserveasacatalystfortheeconomicgrowthoftheEasternCapeandKwaZulu-Natal.

ThebrownfieldsportionentailsmultipleupgradesoftheN2betweenEastLondonandMtathathroughtoPortStJohns.Thegreenfieldportionentails112kilometresofnewalignmentbetweenNdwalane(nearPSJ)andtheMtamvunaRiver(nearMzamba),includingtwomega-bridgestructuresontheMsikabaandMtentuRivers,sevenadditionalmajorriverbridgesandthreeinterchangebridges,approximately96kmofnewclass1roadand17kmofbrownfieldsclass1 road.

Oncecompleted,theroutewillbeapproximately85kmshorterthanthecurrentoneandcouldbeuptothreehoursfaster–particularlyforheavyfreightvehicles.

5 CapitalValue[Rm] Ongoing,estimatedinexcessofR2billion

6 Construction Start Date 2016

7 ConstructionsJobsp.a. OngoingwithSMMElinkages.

8 Operation Start Date 2023

9 OperatingCostsp.a. Tobedetermined

10 OperatingJobsp.a. Tobedetermined

11 TurnoverorValue(GVA)

12 EconomicLinkages Bothroadandnon-roaduserswillbenefitfordecadestocomefromthisprojectinanumberofways,including:theestablishmentofroadsideenterprisessuchasservicestations,foodoutlets,accommodationandtouristattractions;anincreaseinthevalueofrealestate,expansionofwater,electricityandtelecommunications;savingsoftimeandlogisticscosts;accesstomarketsforagriculturalproducers,andahostoftourismopportunities.

13 ‘Lever’to‘Unlock’ SANRALcurrentlyimplementingtheproject.

14 AnyOtherPoints Alargesavinginroadaccidentsandfatalities.Extensivetourismopportunitiesthroughprovidingsafeaccesstopristinenatu-ral areas.



9 CONCLUSIONS AND RECOMMENDATIONSFollowingonfromthisbaselinestudyisaseriesofstakeholderengagementsessionstoshowcasethepreliminaryfindingsandstartpreparingtheimplementationplanintheformofaProjectBidBook,RoadMapandstrategy,tobepresentedataninvestor’sconferenceinSeptember2019.

Thisreportalsoneedstoidentifyaseriesofissuesforfurtherresearch.



10 REFERENCES1. Barbesgaard,M.,2018.Bluegrowth:saviororoceangrabbing?TheJournalofPeasantStudies,45(1),pp.130–149.2. DAFF,July2018.OperationPhakisa,UnlockingtheOceanEconomythroughAquaculture.Threeyearreview.

October2014toOctober20173. DepartmentofDefence,2015.SouthAfricanDefenceReview.pp.2–27.4. DepartmentofEnvironmentalAffairs(DEA),2016.OperationPhakisaOceansEconomyProgressReport.Pretoria,

SouthAfrica:DepartmentofEnvironmentalAffairs.p.21.5. DepartmentofEnvironmentalAffairs(DEA),2017.NationalProtectedAreasExpansionStrategy(NPAES).

[online]DepartmentofEnvironmentalAffairs(DEA).Availableat:<www.environment.gov.za/documents/strategicdocuments/npaes>.

6. DTI:InvestSAOneStopShop,2016.SouthAfrica’sOceanEconomy.AguidethatoutlinesthecapabilitiesofSouthAfrica’soceaneconomy.

7. Findlay,K.andBohler-Muller,N.,2018.SouthAfrica’soceaneconomyandOperationPhakisa.In:V.N.AttriandN.Bohler-Muller,eds.,TheBlueEconomyhandbookoftheIndianOceanregion.Pretoria,SouthAfrica:AfricaInstituteofSouthAfrica,pp.231–255.

8. FoodandAgricultureOrganisation(FAO)divisionoftheUnitedNations,2012.Thestateofworldfisheriesandaquaculture2012.FAOFisheriesandAquacultureDepartment,Rome,2012.

9. Med-IAMER,2013.AdriaticIonianecoregion(AIE).CoastalandMarineTourism.10. Hosking,S.,2017.ProgressoverviewonthecontributionoftheSouthAfricanOceanSector.CapeTown,South

Africa:CapePeninsulaUniversityofTechnology.11. NationalEnvironmentalManagement:ProtectedAreasAct,2003(ActNo.57of2003).647.12. DepartmentofEnvironmentalAffairs(DEA),OperationPhakisa,2016.Variousarticles,presentations,documents

andopinionsassuppliedbyDEA.13. OrganisationforEconomicCooperationandDevelopment(OECD),2016.TheOceanEconomyin2030,OECD

Publishing,Paris.14. Park,D.K.S.andKildow,D.J.T.,2015.RebuildingtheClassificationSystemoftheOceanEconomy.JournalofOcean

andCoastalEconomics,[online]2014(1).Availableat:<https://cbe.miis.edu/joce/vol2014/iss1/4>[Accessed12Apr.2019].

15. RepublicofSouthAfrica,2017.OperationPhakisa:Oceanseconomysummaryreport.Pretoria,SouthAfrica:Oceanseconomysecretariat.

16. RepublicofSouthAfrica,DepartmentofPlanning,MonitoringandEvaluation,2018.Pages-Home.[online]OperationPhakisa.Availableat:<https://www.operationphakisa.gov.za/operations/oel/pages/default.aspx>[Accessed18Apr.2019].

17. SANationalGovernment/OceansLaboratory,2014.OperationPhakisa,MarineTransport&Manufacturing(MTM).18. SAIMI,2017.SAMaritimeSectorRoadmap.19. SAMSAandDeloitte,2011.MaritimeSectorSkillsDevelopmentStudy.20. SouthAfricanMaritimeSafetyAuthority(SAMSA),2017.SouthAfricanshipregistrybagsonemorevessel-a

furtherboosttoseafarerstraining.The10thProvinceBlog.[online]19Mar.Availableat:<https://blog.samsa.org.za/2017/03/19/south-africa-ship-registry-bags-one-more-vessel-afurther-boost-to-seafarers-training>.

21. Sink,K.,2016.TheMarineProtectedAreasdebate:ImplicationsfortheproposedPhakisaMarineProtectedAreasNetwork.SouthAfricanJournalofScience,112(9/10),pp.1–4.

22. StarkP.,2015.ConceptualFramework:TheBaakensRiverValleylinkedtothePortMarinaPrecinctandCBD.CulturesinRegeneration(CIR)togetherwithIsisekoSekonjale.

23. Transnet,2008.ProjectLifecycleProcess(PLP)StudyPhase(FEL-2)Manual.24. Transnet,2009.NationalInfrastructurePlan.StakeholderEngagement.



25. Transnet,2014.PortofPortElizabethStrategy.[PortDevelopmentFrameworkPlan–PDFP]26. Transnet,2017.MarinaandMaritimeDevelopmentProject.OwnerRequirementSpecification.ForPortofPort

Elizabeth.27. VoyerM.etal,2017.(CommonwealthofAustralia)TheBlueEconomyinAustralia.28. Voyer,M.&vanLeeuwenJ.(2018).SocialLicensetoOperateandtheBlueEconomy.ReporttoWorldOcean

Council.AustralianNationalCentreforOceanResourcesandSecurity,Wollongong,Australia.29. Voyer,M.,Quirk,G.,McIlgorm,A.,Azmi,K.,Kaye,S.andMcArthur,M.,2017.TheblueeconomyinAustralia:

conceptualisingtheblueeconomy,itsrelationshipwithmaritimesecurity,anditsroleinAustralianoceansgovernance.Australia:AustralianNationalCentreforOceanResourcesandSecurity,andSeaPowerCentre.

30. Walker,T.,2018.Securingasustainableoceanseconomy:SouthAfrica’sapproach.ISSSouthernAfricaReport,2018(14),pp.1–24.

31. WSP,2015.MaritimeCommercialPositionPaper.32. WWF-SA,2016.Oceanfactsandfutures:ValuingSouthAfrica’soceaneconomy.CapeTown,SouthAfrica:WWF-

SA.p.6.



11 STAKEHOLDER ENGAGEMENT11.1 EASTERN CAPE OCEAN ECONOMY STAKEHOLDERS FOR INTERVIEWS

NO. NAME OF PERSON ORGANISATION INVITATION EMAIL ADDRESSPHONE NUMBER MOBILE NO.

1 Theo Sethsotha Transnet–TNPA,PoPE

11.04.19 [email protected] (041)5071760 08356707960823934432

2 Rajesh Dana Transnet–TNPA,PoPE

11.04.19 [email protected] (041)5071710 0832874386

3 SiyaMhlaluka Transnet–TPT,Ngqura

11.04.19 [email protected]

(041)5078201 0832829790

4 AkhoSkenjana DEDEAT 11.04.19 [email protected] 0605646232

5 Alistair McMaster DEDEAT 11.04.19 [email protected] (043)7374887 0728130063

6 MariusCoetzee DEDEAT 11.04.19 [email protected]

7 Dorelle Sapere MBDA–BayworldProject

11.04.19 [email protected] (041)8118210 0834476380

8 AneleQaba NMBM–EconomicDevel.

11.04.19 [email protected] (041)5037500 0827806912

9 AmeliaBuchner NMBM–EconomicDevel.

11.04.19 [email protected]

(041)5037529 0794900748

10 GrahamTaylor CoegaSEZ,CDC–GIS

11.04.19 [email protected] (041)4030454 0832283055

11 Keith du Plessis CDC,Agro&Aquaculture

11.04.19 [email protected] (041)4030400 0827407654

12 JohanFourie CDC,Property&Strategy

11.04.19 [email protected] (041)4030401 0826501770

13 Eldrid Uithaler BCMDevel.Agency 11.04.19 0727459196

14 SiceloMfidi BCMMunicipality (043)7051149

15 ThandiswaGeorge BCMMunicipality (043)7051154

16 SimphiweKondlo ELSEZ,CEO 12.04.19 [email protected] (043)7028200 0833034002

17 NtobekoBacela ELSEZ,Agro.&Aqua.

12.04.19 [email protected] (043)7028200 0824593412

18 TerryTaylor ELPort 12.04.19 [email protected] (043)7001043 0832841786

19 DirkBotes ELPort 12.04.19 [email protected] (043)7001034 0832874229



NO. NAME OF PERSON ORGANISATION INVITATION EMAIL ADDRESSPHONE NUMBER MOBILE NO.

20 PeterMyles Tourism&NMBMaritimeC

[email protected] (041)5044089 0825561680

21 Ed Richardson FreightTrading [email protected] (041)5823750 083 6569757

22 MlamliNodada ECDC,Agro&Aqua. [email protected] (043)7045600 0834512187

23 Dr.OssieFranks SAIMI 12.04.19 [email protected] (041)5044038

24 Mr.OdwaMtati SAIMI 12.04.19 [email protected] (041)3731289 0827836810

25 Prof. Ronnie Ncwadi

NMU,EconomicsDept.

16.04.19 [email protected]. (041)5042205

26 ProfBernieSnow NMU,InstituteforCoastal & Marine Research(CMR).

16.04.19 [email protected]@mandela.ac.za

(041)5042649(041)5042852

27 ProfJennySnowball

RhodesUniversity 15.04.19 [email protected] (046)6037405

28 ProfWarwickSauer RhodesUniversity 15.04.19 [email protected] (046)6038415

29 ProfWilliamFroneman

RhodesUniversity 15.04.19 [email protected] (046)6038959



11.2 STAKEHOLDER LETTER OF ENGAGEMENT AND STRUCTURED MEETING AGENDA

Derek Zimmerman & AssociatesPostalAddress:PostnetSuite#12,PrivateBagX40106,Walmer,6065,RSAPhysicalAddress:11WestbourneRoad,RichmondHill,PortElizabeth,6061

Telephone:+27(0)418112478|Telefacsimile:+27(0)866180289|MobilePhone:+27(0)832636796Email:[email protected]

COMPANY:

FORATTENTION:

EMAIL:

TELEPHONENUMBER:

DATE: Repeat–18May2019

SUBJECT: AStakeholderEngagementMeetingtodiscusstheCurrentSituationandtheFuturePotentialoftheOceanEconomy.

DearEasternCapeOceanEconomyStakeholder,

RE: A Stakeholder Engagement Meeting - Ocean Economy Potential.

WehavebeenappointedbyaNelsonMandelaUniversityledtaskteam,headedbyProfessorDerrickSwartz,toundertakeathoroughreviewofboththenationalandEasternCapeOceanEconomy.ThepurposeistoprovideacurrentbaselineorstatusquoassessmentoftheOceanEconomy,identifypotentialprojectsforconsideration,andprovideacogent‘RoadMap’ofhowtoimplementtheseprojects.

Inherentinsuchananalysisisareviewofalloftheexisting‘OceanEconomy’projectsandinfrastructure,theprojectsthatareplannedorbeingconsideredandthoseprojectsthatareintheprocessofbeingimplemented.ThisneedstobeundertakenwithinthecontextofthecurrentunderstandingoftheOceanEconomyasenunciatedbyOperationPhakisa,whichwasconceivedduring2014andisaninitiativeoftheSouthAfricangovernmenttofasttracktheimplementationofsolutionsoncriticaldevelopmentissues.



The six laboratory streams and two enablers of Operation Phakisa are highlighted in the following graphic:

OnlylimitedworkhasbeenundertakentobringOperationPhakisatoaprovinciallevel,andtheaimofthisstudyistobringtheOperationPhakisaOceanEconomytoa2018levelforthenationaleconomy,andthentocontextualisetheEasternCapeOceanEconomywithinthisframework,oranewframeworkstilltobeenunciatedthroughthisprocess.

Wearerequestinganopportunitytomeetwithyouandanyofyourcolleaguesorstaffwhomyoubelievecouldeitherassistusinthisprocess,orgainvaluableinformationinreturnasweprogressandprovidefeedback,andtoparticipateinastructuredinterviewintermsoftheagendaprovidedhereafter.

Wewouldrequestthatyouconsidertheagendaitemsprovidedonthefollowingpages,andstrivetoassistusinaddressingthesebyadvancingyourthoughtsontheseissuesduringourmeeting,andprovidingdocumentaryorelectronicmediasupportforyourresponsesandinputwhereverpossible.Wewouldliketorecordthesediscussionsandasaccuratelyaspossible.

Pleaseprovideuswithtwotimesandvenuesofyourchoiceduringtheperiodsfrom16April2019throughto31May2019.Webelievewewouldneedanhourandahalfofyourvaluabletime.

Thankingyouinadvance,andwelookforwardtoengagingwithyouinthisexcitingproject,withrealeconomicpotentialfor our province.

Yourssincerely,

DerekZimmermanLeadConsultant,EasternCapeOceansEconomyBaselineStudy.



Meeting Agenda:-

EasternCapeOceansEconomy–TheCurrentSituationandFuturePotential

1. Whatdoyouunderstandbytheconceptofan‘OceanEconomy’(OE)?a. IstheOEgeographicallybounded,ordoesitresideincertainvaluechains?b. WhichindustriescurrentlydominatetheOEnationallyandintheEC,c. WhichindustrieshavethelargestpotentialforGDPandemploymentimpact?d. HasOperationPhakisacorrectlycapturedtheconceptoftheOEinSouthAfrica?

2. ThecurrentOEwithinyourorganizationorsphereofinfluence:a. WhatisyourcurrentannualfootprintwithintheOEspacebywayofinstalledcapacityorinfrastructure,annual

turnover,GDPimpactandemployment?b. AreyoucurrentlyimplementinganyOErelatedprojects,andwhataretheireconomicmetrics?c. WhatprojectsdoyouhavewhicharecurrentlyeitherbeingconsideredorintheplanningphasefortheOEinthe

EC?

3. ProjectsorinitiativesthatshouldbeconsideredforECimplementation:a. Fromyourknowledgeandexperience,whichprojectsorconceptsdoyoubelieveshouldbeconsideredforimple-

mentationintheECOE?b. Whatisthefundamentalreasonorrationalefortheproject?c. Whataretheeconomicparametersoftheproject,CAPEX,OPEX,GDP,Jobsetc.?d. Whoshouldwespeaktoinordertogetfurtherinformationontheproject?

4. WhatwouldanEasternCapeOceanEconomy‘RoadMap’looklike?a. Woulditbeasnakingstringofhubsandprojectsalongthecoastline?b. Woulditinclude‘MaritimeClusters’fromotherregions,countries,andevencontinents?c. Woulditconcentrateontheevaluationofexistingandpotential‘ValueChains’?

5. WhicharetheentitiesorinstitutionswhichshouldbedrivingtheECOE:a. Theprivatesectorbecausetheyareprofitdriven?b. National,ProvincialandLocalGovernment,providingsupportandenablers?c. TheQuadrupleHelixmodelwhichincludestheabove,togetherwithAcademiaandCivilSociety?d. WhatwouldbethemostefficiententityandprogrammetodrivetheECOE?

6. HowcouldyouoryourorganizationassistwithdrivingandcapacitatingtheECOE?

7. Whatotherissuesshouldwebeconsideringduringourresearch?

8. Arethereanyotherissuesyouwouldliketoraiseordiscuss?



Impressions of the Oceans Economy



12 APPENDIX

12.1 THE BRIEF AND CLIENT REQUIREMENT

The Scope Of Work (SOW) for the Eastern Cape Ocean Economy Baseline Study and this brief is seen as having three phases over twelve months as follows:

1. Pre-summitphase[StatusQuo,BaselineforNational&ECOceanEconomy,‘PackageofProjects’for‘Bottom-Up’ap-proach;economicvalueinGDP,Jobs,Capex&Opex]

2. ECOESummit–August2019[OscarMabuyane-MEC,showcase10OEProjects]3. ResearchOutputsforOEandOEProjects–in‘BidBook’format,witha‘RoadMap’.

ThisrequiresathoroughanalysisoftheSouthAfricanNationaleconomyinthecontextoftheOceanEconomypotentialoveranagreedtotimeframe(twentyyearstomatchOperationPhakisatimelines),andthentoextrapolatetheEasternCapeprovincialeconomyandOceanEconomyfromthisbaselineandproducea‘RoadMap’forECOEimplementation.

AparallelprocessrequiresresearchoncertainoftherelevantECOEProjects.

Table 58: Proposed Scope of Work & Deliverables for the Eastern Cape Ocean Economy

# REQUIREMENT DELIVERABLE

1 Undertakea‘StatusQuoAssessment’ofallrelevantECOEdocuments,reportsetc.Undertakefieldtrips,interviewsandquestionnairestogatherinformation.

• Engageallrelevantstakeholders,• Compile&collateintoa‘ResourceBook’,• Revise or provide precise SOW for this project.

2 Evaluatethe‘StatusQuo’AssessmentdataoftheOEassetsoftheECandcompileanOEResourceProfileor‘ProjectBaseline’.Compilea‘Bottom-Up’projectbookofthekeyeconomicvalueofeachECOEproject.Produceaninitial‘RoadMap’ofapotentialpathtofollowinevaluatingtheECOE.[Completeby:Mid-April2019]

• ProduceanEasternCapeOceanEconomycompendiumofdatawhichwouldessentiallybea‘ProjectBaseline’containingallofthepast,currentandfutureorpotential EC OE projects.

• ProvideahighleveloverviewofeachtoreflectanticipatedoractualCapex,Opex,Funding&Jobcreationalongthevaluechain.

• Prepareahighlevelinitialproject‘RoadMap’.

3 TheSouthAfrican‘OceanEconomy’needstobeprofiledinthecontextofglobalandnationaltrends,togetherwiththeOperationPhakisaemploymentandGrossDomesticProduct(GDP)profileascontainedintheirstrategydocumentation,andupdatedwiththelatest2015and2017StephenHoskingsetalOceanEconomysectorsoverviewandGDPmetrics.[Complete:EndMay2019]

ThefollowingSA‘OceanEconomy’sectorsneedtobeprofiledformainintent,FTEJobsandGDP:-• MarineTransport&Manufacturing,• OffshoreOil&Gas,• AquacultureandFisheries,• Marineprotectionservices&oceangovern.,• Smallharboursdevelopment,• Coastal&MarineTourism.• Enablers:SkillsandR&D



# REQUIREMENT DELIVERABLE

4 PreparearealisticSouthAfricanmacro-economyGDPForecastandthenaSouthAfrican‘OceanEconomy’Forecastoverthenext20-yearstoindicatetheextentofGDPinthesectorsandthejobsanticipated,from2018[Completeby:EndMay2019]

TheSAGDPforecasttoincludeannualSAeconomicdetailasfollows:-• A20-yearSAmacro-economicforecastofGDP,• The2015OE‘Baseline’forjobsandGDP,• A20-yearOEmacro-economicforecast,• Theunderlyingassumptionsused.

5 TheEasternCape‘OceanEconomy’needstobeprofiledinthecontextofnationaltrends,inthecontextoftheprevailingeconomicfactorsintheECasat2015forthe‘ECOEBaseline’,andasat2018fortheOEforecast.Producea‘RoadMap’ofthepathtofollow:

The EC GDP forecast to include annual detail for the EasternCapeeconomy:-• A20-yearECprovincialeconomicforecast,• The2015ECOE‘Baseline’forjobsandGDP,• A20-yearECOEmacro-economicforecast,• Theunderlyingassumptionsused.

6 HighlevelEconomicImpactAssessment(EIA)togaugepriorityprojectsforpursuitbyboththePublicandPrivatesector.[Complete:EndJune2019]

• EIAindicatorsforGDP,Jobs&Funding,• IndicatorsValueChain,Direct,Indirect,Inducedimpacts

forGDP&Jobs,and• Provincial,National&Internationalimpact.

7 ParallelWork-stream:Assistwiththe‘ResearchProjects’tosupportthisECOEprogram.[Complete:EndMay2019]

• Undertakedatagapanalysison‘StatusQuo’,• HighlightgapsuncoveredinGDPforecasts,• Draft‘ResearchProposal’briefs.• Appointcompetentresearcherstoimplement.

8 BaselineReportandRoadMap • Aconciseoverviewofthestudyfindings.



12.1.1 The Approach and Assessment Methodology Proposed

Thestudyneedstoundertakeathoroughanalysisofthemostcurrentandreliableworkonthetopictoestablishabase-lineofinformation.Thestudywillthenconstructamacro-economicmodeltoestablishtrendsandfuturerequirements,andanalysetheexistingEasternCapeOceanEconomyprojectsandinitiativescompleted,underway,orplanned.

This sequential process is indicated graphically in the figure below:

Figure 13: Methodological Approach for the Eastern Cape Ocean Economy Study



12.1.2 Methodology Adopted to Address the Brief

A high level overview of the methodology adopted is as follows:

1. DefinetheOceanEconomyadequatelyinordertobeabletoproperlyunderstandthecontextofthestudyfromaglobalperspective,

2. ReviewthereportsandallworkthathasbeenundertakenorisunderwaywithintheOceanEconomyspaceintheformofaStatusQuoAssessment,

3. EvaluatethestatusquoassessmentdataaninformationinordertoproduceaholisticoverviewoftheOEresourcesintheprovinceandbegintoformulatea‘ProjectBook’withalltheprojectsanalysedandrecorder,

4. ProvideacogentoverviewoftheSouthAfricaneconomyinthecontextoftheprimaryandsecondarymanufacturingsectors,togetherwithananalysisofthesectorsthataredeemedtobe‘OceanEconomy’related.Thisanalysistoinvestigatethetrendsoverthepasttenyearsandprovideaforwardprojectfortwentyyears.

5. ProvideacogentoverviewoftheEasternCapeeconomyinthecontextoftheprimaryandsecondarymanufacturingsectors,togetherwithananalysisofthesectorsthataredeemedtobe‘OceanEconomy’related.Thisanalysistoinvestigatethetrendsoverthepasttenyearsandprovideaforwardprojectfortwentyyears.

6. Analyseallofthedatacollectedinthecontextoftheseoceaneconomyforwardprojectionsandbegintoformulatean“OceansEconomyRoadMap’toprovidestructureandformtoastrategywhichcanbeeffectivelyimplementedfortheEastern Cape.

7. Prepareaseriesofresearchagenda’stobeundertakenbypostgraduatestudentsfromtheProvincesvariousuniversities,suchresearchtocomplementandcorroboratethemainworkofthisstudyprocess.

8. Concludewithaprofessionaldocumentwhichprovidesacogentoverviewofalloftheissues,a‘ProjectBook’ofOEprojectswhicharereadyforimplementation,anOceanEconomyRoadMap,stakeholders,rolesandresponsibilities,timelinesanddeliverables.

Alloftheaboveworkstreamsneedtobeundertakenincollaborationwiththeclient,NMUandanyotherappointedprofessionalswithintheprojectteam,toproduceacomprehensivereportwhichwillprovideforafullandproperunderstandingoftheOceanEconomywithintheEasternCape.



12.2 DEFINING THE OCEAN ECONOMY

Inordertoundertakethisstudyinamannerwhichallowsformeaningfulcomparisonwithotherprovinces,countriesandcontinents,itisvitaltohaveaclearunderstandingofwhattheOceanEconomyis,itssectorsandsub-sectors,iteconomiclinkages,upstreamanddownstreamactivities,clustersandpartners,andthegeneralfunctioningoftheOceanEconomy.

Thesectoralscopeoftheoceaneconomyvariesconsiderablybycountryandthenumberofcategorieschosencanrangefromsix,asinthecaseoftheUnitedStates,to33inthecaseofJapan.Someindustriesmaybeexcludedfromtheoceaneconomyinonecountrybutnotinanother.Moreover,therearesignificantdifferencesamongcountriesinthedelineationoftheclassificationsandcategoriesused.Internationallyagreeddefinitionsandstatisticalterminologyforocean-basedactivitiesdonotyetexist

InordertoarriveataclearandrepresentativedefinitionoftheOceanEconomyaliteraturereviewhasbeenundertakenofafewpapersandarticleswhichwedeemedtobeofvalue.ThesearesummarisedinthefollowingsectionsandthenasynthesisisprovidedwhichencapsulatedourunderstandingoftheOceanEconomyandthebasisuponwhichithasbeenevaluatedthroughoutthisreport.

12.2.1 OECD – Ocean Economy - 2016

TheOrganisationforEconomicCooperationandDevelopment(OECD)opentheirdiscussiononthepotentialoftheOceanEconomybysaying;‘Formany,theoceanistheneweconomicfrontier.Itholdsthepromiseofimmenseresourcewealthandgreatpotentialforboostingeconomicgrowth,employmentandinnovation.Anditisincreasinglyrecognisedasindispensableforaddressingmanyoftheglobalchallengesfacingtheplanetinthedecadestocome,fromworldfoodsecurityandclimatechangetotheprovisionofenergy,naturalresourcesandimprovedmedicalcare.’(OECD,2016)

AnimportantelementofthisstatementistherecognitionofthefinitenaturalassetsuponwhichtheOceanEconomyisbasedandreliant,andthefactthattheyarecloselylinkedandsupportiveofoneanother.

‘Theoceaneconomyencompassesocean-basedindustries(suchasshipping,fishing,offshorewind,marinebiotechnology),butalsothenaturalassetsandecosystemservicesthattheoceanprovides(fish,shippinglanes,CO2absorptionandthelike).Asthetwoareinextricablyinter-linked,thisreportaddressesmanyaspectsofecosystemservicesandecosystem-basedmanagementallthewhilefocusingontheocean-industrydimension.’(OECD,2016)

Thereportputsforwardaworkingdefinitionoftheoceaneconomy,whichencompassesnotonlytheocean-basedindustriesbutalsothenaturalassetsandecosystemservicesthattheoceanprovides,aswellasgoingfurtherandprovidingestimatesofGrossValueAdded(GVA)asaproxyforeconomicactivity,togetherwiththeemploymentopportunitiescreatedandtherefuturepotential,withthebaselinebeing2010togetherwithafutureprojectionoftwentyyearsto2030.



The main focus of the report is the economic development of the ocean and the future evolution of the current and emerging ocean-based industries and activities. These industries have been framed as follows:

‘establishedoceanactivitiesencompassshipping,shipbuildingandmarineequipment,capturefisheriesandfishprocessing,maritimeandcoastaltourism,conventionaloffshoreoilandgasexplorationandproduction,dredging,andportfacilitiesandhandling.Emergingocean-basedindustriesandactivitiesarecharacterisedbythekeyroleplayedbycutting-edgescienceandtechnologyintheiroperations.Theyinclude:offshorewind,tidalandwaveenergy;offshoreextractionofoilandgasindeep-seaandotherextremelocations;seabedminingformetalsandminerals;marineaquaculture;marinebiotechnology;oceanmonitoring,controlandsurveillance.Lookingfurthertothefuture,therearefledglingor,asyet,“unborn”industrieswhichcouldpotentiallyjointhiscategory.Examplesarecarboncaptureandstorage(CCS)andthemanagementofoceanscaleprotectedareas.’(OECD,2016)

ThisisafairlybroaddefinitionoftheOceanEconomyanditincludeselementsofwhatotherreportsandauthorstermthe‘BlueEconomy’,whichtendstospeakmoretooceanenergyandcarboncapture,aswellasthesustainabilityofmaritimeor ocean resources.

The Ocean Economy is seen as a cluster of interconnected industries:-

‘Oceanindustriesarenotdevelopinginisolation,neitherfromoneanothernorfromtheoceanenvironmentofwhichtheyarepart.Onthecontrary,theyinterrelateandinteractwithotheractivitiesandtheiroceansurroundsinamyriadofdifferentways.Butaslongasmaritimeindustriesandtheexploitationofmarineresourcesareperceivedasindividualandseparateactivities,approachestotheirdevelopmentandtheirsustainablemanagementriskremainingpiecemealandlimitedintheireffectiveness.’(OECD,2016)

Thereportnotesthatterminologyrelatingtotheoceaneconomyisuseddifferentlyaroundtheworld,andthatcommonlyusedtermsinclude:oceanindustry,marineeconomy,marineindustry,marineactivity,maritimeeconomyandmaritimesector.Besidestheterminology,thereisalsonouniversallyaccepteddefinitionoftheoceaneconomy.

TheOECDreportconsidersthatanydefinitionoftheoceaneconomyisincompleteunlessitalsoencompassesnon-quantifiablenaturalstocksandnon-marketgoodsandservices.Inotherwords,theoceaneconomycanbedefinedasthesumoftheeconomicactivitiesofocean-basedindustries,andtheassets,goodsandservicesofmarineecosystems.

This is represented graphically in the following figure:

Figure 14: The OECD Concept of the Ocean Economy

Source: Organisation for Economic Cooperation andDevelopment(OECD),2016.TheOceanEcono-my in 2030, OECD Publishing, Paris.



Thefigureabovesummarisesthisconcept,withocean-basedindustriesdividedintomarketflowsandservicesandphysicalcapitalstockoftheindustries.Marineecosystemsrepresentnaturalcapitalandnon-marketflowsandservices.

‘Inmanycases,marineecosystemsprovideintermediateinputstotheocean-basedindustries.Anexampleiscoralreefs.Theyprovideshelterandhabitatforfishnurseriesanduniquegeneticresources,whileatthesametimeprovidingrecreationalvalueformaritimetourism.Conversely,oceanindustriescanimpactthehealthofmarineecosystems,e.g.throughdischargeofshipwasteorpollutionfromoilspills.’(OECD,2016)

TheOECDreportproposesthefollowingscopeasencapsulatedinthetablebelow,forcategorisingestablishedandemergingocean-basedactivities,bearinginmindthebroadoverlapsthatexistinthevariousdefinitionsoftheOceanEconomy,andtheexistenceofhighlydynamicemergingactivitieswithintraditionaloceanindustries.

Table 59: Established and Emerging Ocean Based Industries – OECD 2016

ESTABLISHED EMERGING

CapturefisheriesSeafoodprocessingShippingPortsShipbuildingandrepairOffshoreoilandgas(shallowwater)MarinemanufacturingandconstructionMaritimeandcoastaltourismMarinebusinessservicesMarine R&D and educationDredging

MarineaquacultureDeep-andultra-deepwateroilandgasOffshorewindenergyOceanrenewableenergyMarineandseabedminingMaritimesafetyandsurveillanceMarinebiotechnologyHigh-techmarineproductsandservicesOthers

Source:OECD),2016.TheOceanEconomyin2030,OECDPublishing,Paris.

Theoceaneconomyofthenexttwentyyearsorsoisbeingdrivenprimarilybydevelopmentsinglobalpopulation,theeconomy,foodsecurity,energyrequirements,climateandenvironment,technology,andoceanregulationandmanagement.

ExtensiveeconomicmodellinghasbeenundertakenandthecombinedglobalOceanEconomyhasbeenestimatedasfollows:

12.2.2 Social Licence to Operate and the Blue Economy

Thereisanincreasingtrendinbusinessandeconomicstoconsiderthelong-termimpactsofhumanactivitiesontheenvironmentandnaturalassets.Generallythe‘BlueEconomy’hasbeenfoundtobewellequippedtodealwiththetechnicalandtechnologicalchallengesofmanagingtangibleimpactsofcommercialactivity,particularlyenvironmentalrisksthroughresearch,innovationandappropriatemitigationpractices.



Amorechallengingdimensionisthelesstangiblesocialandculturalelementofoceanresourcesexploitationwhichrelatestovalues,beliefs,customsandideologiesofsocietiesandcommunities.Theseissuesoftentakeonpoliticaldimensionsasdifferentsocietiesmayhaveconflictingviewsonmarinebasedcommercialactivityandtheirlong-termimpacts.

‘TheBlueEconomyisanoceanbasedeconomicgrowthmodeldesignedtoensuresustainableuseofthemarineenvironment.Itincludes‘traditional’offshoreactivities(e.g.oilandgasdevelopment,shipping,fisheries)andemergingindustriessuchasdeepseaminingandrenewableenergy.Thesocialacceptabilityofoceanbasedindustries,sometimesknownas‘sociallicensetooperate’(SLO),willbeimportanttosecuringthefuturepotentialofaBlueEconomy.WhilstmaintainingaSLOisachallengethatisexperienceddifferentiallyacrossvarioussectors,thelossofSLOinonesectormayimpactthelevelofsocietaltrustinthebroaderconceptofaBlueEconomy.’(Voyeretal,2018)

CentraltothedebateisthedefinitionoftheOceanEconomyfromthebroadtothenarrowsense,andwhatconstitutesthe‘BlueEconomy’inthiscontext.TheWorldOceanCouncilhasadaptedanOceanEconomydefinitionusedbyTheEconomistin2015asfollows:

‘WhileauniversaldefinitionoftheBlueEconomyisyettobeagreed,itisbaseduponthecoreprinciplesofSustainableDevelopment.Itrecognisesthemultiplebenefitsofmarineandcoastalecosystemsforcurrentandfuturegenerationsandtheneedforsustainableuseanddevelopmentoftheseresources.ThisfocusonsustainabilityandoceanhealthdistinguishestheBlueEconomyfromthebroader‘oceaneconomy’.Theoceaneconomy(alsosometimescalledthemarineeconomy)refersto‘thatportionoftheeconomywhichreliesontheoceanasaninputtotheproductionprocessorwhich,byvirtueofgeographiclocation,takesplaceonorundertheocean’(KildowandMcIlgorm,2010p368).TheoceaneconomythereforeincludesawidevarietyofsectorsasoutlinedinTable1(KildowandMcIlgorm,2010,McIlgorm,2005,TheEconomist,2015).’(Voyeretal,2018)



Table 60: Sectors That Contribute to the Ocean Economy (Adapted: Economist, 2015)

EXTRACTION OF NON-LIVING RESOURCES, OR RESOURCE GENERATION

HARVESTING OF LIVING RESOURCES

COMMERCE AND TRADE IN AND AROUND THE OCEAN

ECOSYSTEM PROTECTION AND MANAGEMENT

Seabed/Deepseabedmining Fisheries Shipping(marinetransportation)

BlueCarbon

Oil and Gas Aquaculture Shipbuildingandrepair Surveillance and maritimesecurity

Water(desalinization) Marinebio-technology Marineconstruction(e.g.jettiesetc.)

Habitatprotection/restoration

Dredging Recreationalfishingandboating Hazardprotection

Energy/renewables(tidal/waveenergy;coastal/offshorewind)

Seafoodprocessing Port infrastructure and services

Ecological/ecosystemresearch

Marineservices(e.g.mapping,monitoring,consulting,maritimeinsurance,etc.)

Wastetreatmentanddisposal

Marine education and R&D

CoastalDevelopment

Marine&coastaltourism

Defence

Source:Voyer,M.&vanLeeuwenJ.(2018).SocialLicensetoOperateandtheBlueEconomy.ReporttoWorldOceanCouncil.AustralianNational Centre for Ocean Resources and Security, Wollongong, Australia. Adapted from The Economist, 2015.

TheBlueEconomyisoftenseenasasubsetofthisbroaderoceaneconomywhichincorporatesideasthataredesignedto‘green’existingmarineindustriessuchasfisheries,aquaculture,shipping,portsandmarinetourism.Italsoembracesnewandemergingsustainableindustriessuchaswindandwavepower,andpaymentforecosystemsserviceslikeBlueCarbon.



12.2.3 The Blue Economy in Australia - 2017 ThisreportdealswiththedistinctionbetweentheBlueEconomyandtheOceanEconomyandasafirststagedividestheBlueEconomyupintothefollowingdominantthemesorcomponentsforthepurposeofevaluatingthesub-themesandactivitiesthatresidewithineachcomponent.Fiveoverarchingthemesorcomponentswereidentifiedasfollows:

Figure 15: Key Themes and Sub-themes within Australian Blue Economy Literature

COMPONENTS OF THE BLUE ECONOMY

ECONOMIC GROWTH AND DEVELOPMENT

ENVIRONMENTAL SUSTAINABILITY

SOCIAL CONSIDERATIONS

GOVERNANCE AND INSTITUTIONAL MECHANISMS

TECHNICAL CAPACITY

Sub-themes

BlueGrowth

Resource utilisation/sectors/growthstrategies

Employment

Livelihoods

Maritimeclusters

Incomediversification

Impactmanagement

Climatechangemitigation

Ecosystemprotection

Ecosystemrestoration

Ecosystemservices

Foodsecurity

Equity

Inclusiveness

PovertyalleviationWellbeing

Communityengagement

Capacitydevelopment

Coordination/integration

LinkswithSustainableDevelopmentGoals(SDGs)andotherconventions

Marine Spatial Planning

EcosystemBasedManagement

MPAs

Innovation

MaritimesecurityInvestmentandfinancing

Research and Development

Private sector engagement

Source:VoyerM.etal,2017.(CommonwealthofAustralia)TheBlueEconomyinAustralia.

Thesecondphaseemployedanoceaneconomyclusteranalysisinordertoidentifyhowathemewasemployedinrelationtootherconceptsorideas,whichthenwentontoidentifyfourmainclustersofeconomicactivitywithinthe‘BlueEconomy.Theseareseenasbeing:

1. Oceansasnaturalcapital,[Environmentalprotectionandrestoration]2. Oceansaslivelihoods,[Foodsecurityandpovertyalleviation]3. Oceansasgoodbusiness,[Strategiesforgrowthinsustainableresources]and4. Oceansasdriversofinnovation.[R&D,Investmentandinnovativefinancing]



Thefigurebelowcontainsamatrixthathighlightshowthefouridentifiedclustersinteractwithoneanother,andcanbeviewedinthecontextofthesub-themesidentifiedintheprevioustable.

Figure 16: A Blue Economy Matrix Illustrating Related Terms and Concepts

Oce

ans

as N

atur

al C

apita

l

Oceans as a D

river of Innovation

Blue EconomyProtection (e.g. MPAs)

Restoration

Research and Development

Capacity Development

Investment & Financing Ecosystem Based

Management

Ecosystem Services

Sustainable Development Goals

Maritime security

Impact Abatement / Mitigation

Marine Spatial Planning

Income Diversification

Food Security

Poverty Alleviation

Maritime Clusters

Employment

Blue Growth / Resource Utilisation

Oceans as Livelihoods

Oceans as Good Business




12.2.4 Practical Manifestations of the Blue Economy for Sustainability

ThefourmainclustersinrelationtotheunderlyingBlueEconomythemesprovidesthecontextinwhichthesustainabilityconceptneedstobeemphasisedinordertopreservetheoceananditsresourcesforfuturegenerationsandspecificallyintermsoftheSustainableDevelopmentGoals(SDGs)asdeterminedbytheUnitedNations.

AftertheanalysiswasconductedofexistingBlueEconomyactivities,arangeofprogramsandtoolswereidentifiedtogetherwiththeactorsandprogramsrequiredinordertoimplementmeaningfulandsustainableuseofoceanresources.ThefindingsofthesepracticalmanifestationsoftheBlueEconomyforsustainabilityaresummarisedinthefollowingtable:

Table 61: Practical Manifestations of the Blue Economy for Sustainability

OCEANS AS NATURAL CAPITAL

OCEANS AS LIVELIHOODS

OCEANS AS GOOD BUSINESS

OCEANS AS A DRIVER OF INNOVATION

Primaryobjectives

Ecosystemprotectionand/orrestoration

Povertyalleviationandfoodsecurity

Economicgrowthandemployment

Technologicalortechnical advances

Actors Conservationagencies/NGOs

Developmentagencies,SIDS,SmallScaleFisheries

Industry,largerglobaleconomies(EU,OECD,China,etc.)

AcademicInstitutes,Industry,andGovernment

Sectors Carbonintensiveindustries(e.g.oilandgas)excluded.Focusoneconomicbenefitsfromconservation(e.g.eco-tourismandMPAs,PaymentforEcosystemServices.BlueCarbon,etc)

PrimaryfocusonSSF/eco-tourismwithaspirationsfordiversification,especiallyaquaculture

All sectors included butprimaryfocusonlargemulti-nationalcorporations and sectors(e.g.shipping,oilandgas,renewables,etc.)

Allsectorsbutparticularlyemergingindustrieslikerenewables,biotechnology,anddeepseamining

Scale Smallscale,locallybased

Smallscale,locallybased

Global/regionalandnational

Sub-nationaldistrictsor provinces

Tools MPAs,EcosystemBasedManagement

Communitymanagedfisheries/MPAs,MarineSpatialPlanning,EcosystemBasedManagement

Marine Spatial Planning,economicvaluationstudies,targetedinvestmentandgrowthstrategies

Innovationhubs/researchinstitutes,innovation‘challenges’orcompetitions,investment/financingstrategies




12.2.5 Maritime Sector Skills Development Study - SAMSA (2011)

TheSouthAfricanMaritimeSafetyAuthority(SAMSA),isanagencyofgovernmentwhichispursuingagrowthstrategythatprioritisesthedevelopmentandretentionofqualitycriticalandscarceskillswithinthemaritimesector.Anevaluationanddefinitionofthemaritimesectorwasrequiredinordertoaddressskillsshortages.

DeloittewasappointedbySAMSAtoconductaMaritimeIndustrySkillsStudy,whichwouldcontributetoSAMSA’sinformedeffortstostrategicallypositionthemaritimeindustryasakeyeconomicsector.ThestudywastoconductareviewofthemaritimesectorinSouthAfrica,toexploretrendsinsupplyanddemandinthemaritimeindustry,toexplorepoliciesandfundingmechanismsthatrelatetoskillsdevelopment,todeterminethenumberandtypesofskillsavailableinSouthAfricaandtodeterminetheskillsofferingsanddevelopmentgapsinSouthAfrica.Thestudynotedthattheindustrygenerallydoesnothavecurrentdataandnumbersonskillssupplyanddemand,andthatwheredataisavailableitisfragmented.(Thisobservationappliestothecurrentstudyaswell.)

Basedonthedataemergingfromtheirresearchstudy,themaritimesectorwasdividedintosevenclusters,representingsub-sectorsofthemaritimesector.Themaritimesectormodeldistinguishesbetweenthreeprimaryandfoursecondaryindustryclusters.Thethreeprimaryindustryclustersincludeallthosemaritimeindustriesthatrepresenttheeconomicfoundationofthesector:(1)shippingandtransport,whichisbrokendownintomaritimelogisticsinfrastructure,shippingtransportandports,marineservicesandcoastaladministration;(2)marineresources,whichisbrokendownintofisheries,pharmaceuticalsandaquaculture;aswellasoff-shoreenergyandmining;and(3)marinetourism,whichisbrokendownintoboatingandcruising,sportsandrecreationandleisure.

Thereportstatesthatacomprehensiveskillsdevelopmentstrategyforthemaritimesectorwouldneedtoincorporateskillsdevelopmentrequirementsinallsevenclusters.ThethreeprimaryindustriesareeachequallyimportantforgrowthofSouthAfrica’smaritimesector.Thestudyhasrevealedtheneedforadditionalresearchfocusedoneachoftheprimaryindustriestobetterunderstandtheskillssupplyanddemanddynamicsandaccuratelydeterminethenumberofskillsrequiredsoastobetterinformthemaritimeskillsdevelopmentstrategy.Itwasfoundthatforeachindustrythekeychallengeisthegapinmiddle-managementandsupervisoryskillsandeachindustryhasemphasisedthegapbetweenschooling/formaltrainingstructuresandwhatisbeingdemandedintheworkplace.

Thestudyhasanalysedthesocialcontextwithinwhichthemaritimesectorfindsitself,trendsinfluencingmaritimeskills,legalandpolicyframeworksgoverningthemaritimeindustry,fundingmechanismsandcollaborativepartnerships,undertakena‘SWOT’analysisandtheformulatedasetofconclusionsandrecommendations.

OnceanunderstandingofthemaritimesectorfootprintwasprovidedandtheMaritimeSectorSkillsDevelopmentModelwasrefinedbySAMSA,asecondsurveywasconductedwithcompaniesidentifiedwithineachsectorthatareregardedasprovidingsignificantmaritimeskillsandemployees.

Sixteencompanieswerepurposivelysampledandcontactedtelephonicallytoaskaboutnumberswithinthecompany.Documentaryevidenceprovidedfurtherinsightsonnumbers(annualreportsreviewed).

ThetablealongsideindicatesthatthetotalemploymentwithintheSouthAfricanMaritimeSectorisestimatedat116,364.ItisnotedthatthisnumberisindicativesinceorganisationsandcompaniescontactedwerepurposivelysampledbecauseoftheireminencewithintheSector.



Limitationsexistinthattheremaybesubstantiallymorecompanieswithineachmaritimecluster/industrythathavenotbeenincludedsinceatthetimeofthestudytherewasnotadatabaseofeverycompanywithinthemaritimesectorinSouth Africa.

Table 62: SAMSA / Deloitte Employment Estimate for the SA Marine Economy

CLUSTERS & INDUS-TRIES

TOTALEMPLOYMENT COMPANIES INCLUDED IN THE SURVEY

Shipping 61,912

CompaniesIncluded:· SouthAfricanAssociationofShippingOperatorsandAgencies· NationalPortsAuthority· TransnetPortsTerminals· TransnetFreightRail

Marine Resources 29,442

CompaniesIncluded:· FoodandAgricultureOrganisation· Petro SA· Forest Oil· PioneerEngineering· South African Oil and Gas Alliance

MarineTourism 2,372

CompaniesIncluded:· DepartmentofTourism· CruiseTourismStudy· DivingCompanies

OperationalLogistics 1,013CompaniesIncluded:· SouthAfricanAssociationofShippingOperatorsandAgencies

Manufacturing 13,700CompaniesIncluded:· CapeTownBoatbuildingandTechnologyInitiative· MarineTechnologies

BusinessServices 113CompaniesIncluded:· PrivateTrainingProviders

PublicServices 7,812

CompaniesIncluded:· SAMSA· DepartmentofTransport· PetroleumAgencySouthAfrica· PortsRegulator· SouthAfricanNavy· TETA· UCT· DUT· CPUT

TOTALEMPLOYMENT 116,364

Source: SAMSA and Deloitte, 2011. Maritime Sector Skills Development Study.



12.3 OCEAN ECONOMY FORECAST FOR SA – ASSUMPTIONS USED

12.3.1 OECD’s Forecast Methodology & Metrics

TheOrganisationforEconomicCo-operationandDevelopment(OECD)isaninternationalorganisationthatworkstobuildbetterpoliciesforbetterlives.

GlobalValueAdded(GVA)intheoceaneconomyin2030(inconstant2010USD)isestimatedtogrowtomorethanUSD3trillion,therebymaintainingits2.5%shareoftotalworldGVA(estimatedatUSD120billionGVAin2030).Maritimeandcoastaltourism,includingthecruiseindustry,isexpectedtotakethelargestshare(26%),followedbyoffshoreoilandgasexplorationandproductionwith22%andportactivitieswith16%.In2030,theocean-basedindustriesinthebusiness-as-usualscenarioareanticipatedtoemploymorethan40million,representingmorethan1%oftheglobalworkforceofaround3.8billionpeople(includingpart-time,self-employedandunemployedpeople).

Amajoritywouldbeworkingintheindustrialcapturefisheriessectorandmaritimeandcoastaltourismindustry.Morethanhalfoftheocean-basedindustriesareprojectedtoseetheirvalue-addedrisemorequicklythanthatoftheglobaleconomy.Almostalloftheseindustrieswouldseeemploymentgrowthoutpacethatintheworldeconomyasawhole.

Thebusiness-as-usualscenario,orbaselinescenario,assumesacontinuationofpasttrends,nomajorpolicychanges,noabrupttechnologicalorenvironmentaldevelopments,andnomajorshocksorsurprises.Valueaddedandemploymentgrowthintheocean-basedindustriescontinuetoprogressalongthesametrajectoryasinthepastreferenceperiod.

Thereportemphasisesfromtheoutsetthatthescenariosarenotforecasts,andthattheyareprojectionswhosepurposeistoexplorehowocean-basedindustriesmightevolveinthenextcoupleofdecadesonthebasisofasetofunderlyingassumptions,suchaseconomicgrowth,environmentaldegradationandtechnologicalinnovation.Thescenarioshavebeenestablishedtoprovideinsightsintothepossibleprospectsforgrowthandemploymentinoceanindustries,andtohelpidentifylikelyupcomingissuesandchallenges,forexample,thepotentialimpactofrapidgrowthofoceanindustriesontheoceanenvironment,itsconsequencesfortheuseofmaritimespaceandimplicationsforoceanspatialmanagement.

Thetablebelowsummarisestheresultsofthebusiness-as-usualprojections.Itcomparesratesofchangeofvalueaddedandemploymentinocean-basedindustriesbetween2010and2030.Thecompoundannualgrowthrateforvalueaddedoftheocean-basedindustriescombinedbetween2010and2030isestimatedat3.45%,broadlyinlinewiththeanticipatedcompoundannualgrowthrateforvalueaddedoftheglobaleconomy.

However,thetotalgrowthofemployment(approximately30%)intheocean-basedindustriesoverthe20-yearperiodisexpectedtooutpacemarkedlytheoverallgrowthrateoftheglobalworkforce(approximately20%).



Table 63: Overview of Estimates of Industry-specific growth rates in GVA & Employment

INDUSTRY COMPOUND ANNUAL

GROWTH RATE FOR GVA BETWEEN 2010 AND 2030

TOTAL CHANGE IN GVA BETWEEN 2010 AND 2030

TOTAL CHANGE IN EMPLOYMENT BETWEEN

2010 AND 2030

Industrialmarineaquaculture 5.69% 303% 152%

Industrialcapturefisheries 4.10% 223% 94%

Industrialfishprocessing 6.26% 337% 206%

Maritimeandcoastaltourism 3.51% 199% 122%

Offshoreoilandgas 1.17% 126% 126%

Offshorewind 24.52% 8037% 1257%

Port activities 4.58% 245% 245%

Shipbuildingandrepair 2.93% 178% 124%

Maritimeequipment 2.93% 178% 124%

Shipping 1.80% 143% 130%

Averageoftotal

ocean-basedindustries 3.45% 197% 130%

Globaleconomybetween

2010and2030 3.64% 204% 120%¹

1.Basedonprojectionsoftheglobalworkforce,extrapolatedwiththeUNmediumfertilityrate.

Source: OECD, 2016. The Ocean Economy. Authors’ calculations based on OECD STAN, UNIDO INDSTAT, UNSD; Lloyd’s Register Group (2014;2013);WorldBank(2013);IEA(2014);FAO(2015).

Globalvalueaddedintheoceaneconomyin2030isestimatedtogrowtomorethanUSD3trillion(inconstant2010USD),maintainingitsshareof2.5%oftotalglobalGVA(estimatedatUSD120billionfor2030).Thesectoralsharesofthisgrowthareindicatedinthefigurebelow:



Figure 19: Value Add of the Ocean Economy in 2030 – Business as Usual

Source: OECD, 2016. The Ocean Economy. Authors’ calculations based on OECD STAN,UNIDOINDSTAT,UNSD;Lloyd’sRegisterGroup(2014;2013);WorldBank(2013);IEA(2014);FAO(2015).



Baseduponthisanalysisanemploymentprofilehasbeencreatedwiththebaseyearin2010andextrapolatedto2030.Thisdataisillustratedinthetablebelow,witharankingindicatingthatindustrialscalefishcaptureremainsthetopemployer.EmploymentintheOceanEconomyisseentoriseby9millionfromthecurrent31milliontoinexcessof40million.

Table 64: OECD Global Ocean Economy Employment Estimates

Maritime Industry TotalSector Contributions 2010 2030 %

Indus tria l c apture fis heries 10,976,414 10,305,489 25.4%M arit im e and c oas tal touris m 6,958,000 8,520,000 21.0%F is h proc es s ing 2,399,200 4,945,930 12.2%P ort ac t ivit ies 1,737,000 4,255,650 10.5%Indus tria l m arine aquac ulture 2,076,104 3,165,669 7.8%M arit im e equipm ent 2,144,567 2,659,503 6.6%S hipbuild ing and repair 1,875,026 2,325,243 5.7%O ffs hore oil and gas 1,840,406 2,316,170 5.7%S hipping 1,193,272 1,546,477 3.8%O ffs hore w ind 37,756 474,740 1.2%Totals 31,237,745 40,514,871 100%

Source: O rganis at ion for E c onom ic Co-operat ion and Developm ent (O E CD), 2016.

Employment

OnasimilarbasistheGrossValueAdded(GVA)fortheOceanEconomyhasbeenextrapolatedfromtheUSD1,501billionin2010toUSD2,960billionin2030.

Table 65 OECD Global Ocean Economy GVA Estimates

Maritime Industry TotalSector Contributions 2010 2030 %

M arit im e and c oas tal touris m 390,107,246,153 777,138,485,595 26.2%O ffs hore oil and gas 504,034,800,805 636,089,807,812 21.5%P ort ac t ivit ies 193,000,000,000 472,850,000,000 16.0%M arit im e equipm ent 168,034,658,400 299,674,237,328 10.1%F is h proc es s ing 78,806,980,720 265,601,462,945 9.0%O ffs hore w ind 2,867,787,104 230,472,860,260 7.8%W ater t rans port 82,594,084,254 118,023,313,343 4.0%S hipbuild ing and repair 57,693,008,821 102,890,133,394 3.5%Indutria l c apture fis heries 21,081,783,838 47,048,622,903 1.6%Indus tria l m arine aquac ulture 3,627,080,903 10,964,638,511 0.4%Totals 1,501,847,430,997 2,960,753,562,090 100.0%

Source: O rganis at ion for E c onom ic Co-operat ion and Developm ent (O E CD), 2016.

Gross Value Added (GVA)



12.3.2 Stephen Hosking’s Forecast Methodology & Metrics - 2014

This research has formulated an important methodology for the defining of the South African Ocean Economy in a manner which is both logical and accurate. The abstract to the paper summarises the process as follows:

‘ThecontributionoftheoceansectorinSouthAfricaisofinteresttomany–fromresearchersofoceanresourcesandenvironmentstofirmsusingtheoceanandgovernmentdepartmentsandnon-governmentalorganizationswithinterestin,orresponsibilityfor,theoceanresourcesandenvironment.ForthepurposeofidentifyingtheoveralleconomiccontributionthispaperdescribesandappliesalternativemethodsofapportioningGDPintooceanandnon-oceanparts.OnemethodusesoceanclosenessasthereferenceforapportioningGDP.Ithasbeenestimatedthatin1995theoceansectorcontributedabout33%ofSouthAfrica’sGDP.AmajorweaknessoftheclosenesstooceanbasisforapportioningGDPisthatmanyoftheeconomicactivitiestakingplaceneartotheoceanuselittle,ifanything,oftheoceanresourcesanditsenvironmentasinputsinproduction.Apreferredmethodofidentifyingoceanandnon-oceanpartsofGDPistodividethevalueaddedpereconomicsub-sector(andsub-set)intooceanandnon-oceanpartsandsummingtheoceanparts.ThismethodisoutlinedanddemonstratedusingSouthAfricandataforthe2010yearatthethirddigitlevelofthestandardindustrialclassificationcodelist(ICCLorSIC).Itisfoundthatin2010theoverallcontributionoftheocean-linkedsectortoGDPwasabout4.4percent.’(Hosking,2013)

Theoceaneconomyhasbecomeimportanttomostnationsbecauseoftheeconomicpotentialwhichithasandthedesiretosimultaneouslyexploittheresourcesandopportunitiesinordertosustainagrowingpopulationandoptimizethelong-termyieldoftheresources,whilealsofulfillingtheroleofastewardoftheoceanresourcesandenvironmentonbehalfofvariousimportantconstituencies,includingtheinternationalcommunityandfuturegenerations.

The size of the area which potentially constitutes the Ocean Economy has been framed by Hosking as follows:

‘ThesizeofSouthAfrica’sExclusiveEconomicZoneis1553000squarekilometers,greaterthanthelandareaofthecountry(whichis1219090squarekilometers).TheoceanareaisgovernedintermsofSouthAfrica’sMaritimeZonesActof1994andtheUnitedNationsConventionontheLawoftheSea(theLawofSeaTreaty),agreedtoin1982.(Hosking,2013.Page4)

Theoceanenvironmentsustainsandfacilitatesawiderangeofeconomicactivities–notonlyshippingtransport,recreation,fishingbutalsogovernmentones,likenavigationaidsandinformation,weatherforecasting,defence,searescue,policingandcustoms,marineandcoastalmanagementandresearchandeducation,andalsomining,farming(aquaculture),pharmacology,scienceandtechnologyandenergygeneration.

‘About75%ofallSouthAfrica’stradebyvalue(95%byvolume)istransportedbysea(SANGP100,2013:18).In2012exportsofgoodsmadeup24%ofGDPandimportsofgoodsasaproportionofGDPwere27%(SARB,June2013:S-106).’(Hosking,2013.Page6)



HoskingetalinvestigatevariousmethodsofquantifyingandmeasuringtheOceanEconomyandthensettleuponthe‘sumofvalueadded(sectoral)basedGDPapportionmentmethodologybasedonStandardIndustryClassification(SIC)codesforSouthAfricandatain2010.Thevarioussectorsandsub-sectorsareanalysedwithaviewtodeterminingtowhatextenttheyhaveanimpactontheoceaneconomyorhavelinkagesthereto.Extensivemodellingwascarriedoutandthefollowingestimatedvalueaddedbyindustrialsectorandsub-sectorsforthePrimaryandSecondarySectorsin2010wasestablished:-

Table 66: Estimated Value Add by Primary & Secondary Ocean Sectors in 2010 - Hosking

INDUSTRIAL SECTOR (AND STANDARD INDUSTRIAL CODE

IN BRACKETS)

IDENTIFIED SUB-SECTORS WITH OCEAN SECTOR

QUALIFYING PARTS (VI > 0) IN

R MILLIONS(TOTAL INDUSTRY VALUE ADDED IN PARENTHESIS)1

PROPORTION OF SUB-SECTOR

QUALIFYING AS OCEAN

SECTOR (VI): FROM TABLE 4A

OCEAN SECTOR PROPORTION OF

EACH SUB-SECTOR (R MILLIONS)

PROPORTION OF OCEAN SECTOR VALUE ADDED TO INDUSTRY

SECTOR VALUE ADDED (%)

Agriculture,forestry,andfisheries(1)

OceanandcoastalfishingFishhatcheriesandfishfarms2

15505(62312.2)

15,195310

1.7

15412

15195217

24.7

Miningandquarrying(2)

Petroleumandnaturalgasextraction3 AlluvialDiamonds,Stonequarrying,clayandsandpits4

9573(233845.9)

3,031

6542

1

.04

3292.7

3031

261.7

1.4

TotalPrimarysector 25 078(296 158.1)

18724.3 6.3

Manufacturing(3)

Production,processingandpreservationofmeat,fish,fruit,vegetables,oilsandfatsRefinedpetroleumproductsand nuclear fuelBuildingofpartsformotorvehicles,shipsandboatsandtheirenginesManufacturingNEC

86462.9(366582.7)4 347.3

63785.4

15616.4

2 713.8

.1

.05

.02

.01

3899.6

434.7

3 125.5

312.3

27.1

1.1



Electricity,Gas,SteamandHotwatersupply(4)Collection,purificationanddistributionofwater

11218.1(67 946.1)11218.1 .01

112.2

112.2

0.2

Construction(5)

Buildingofcompleteconstruction and civil engineering

75 122.38(107779.6)75122.38 .15

11268.4

11268.4

10.5

TotalSecondarySector 197881.38(542308.4)

15 280.2 2.8

TotalPrimaryandSecondarySectors

222959.38(838466.5)

34 004.5 4.1

Source: Hosking et al. 2013. The economic contribution of the Ocean Sector in South Africa in 2010.



The same modelling methodology was applied to the tertiary sectors to establish the metrics proportions as per the following table:

Table 67: Estimated Value Added by Tertiary Ocean Sectors in 2010 - Hosking

INDUSTRIAL SECTOR (AND STANDARD INDUSTRIAL CODE IN BRACKETS)

IDENTIFIED SUB-SECTORS WITH OCEAN SECTOR

QUALIFYING PARTS (VI > 0) IN

R MILLIONS(TOTAL INDUSTRY VALUE ADDED IN PARENTHESIS)1

PROPORTION OF SUB-SECTOR

QUALIFYING AS OCEAN

SECTOR (VI): FROM TABLE 4A

OCEAN SECTOR CONTRIBUTION IN

EACH SUB-SECTOR (R MILLIONS)

PROPORTION OF OCEAN SECTOR

VALUE ADDED TO INDUSTRY SECTOR VALUE ADDED (%)

Wholesaleandretailtrade(6)

Non-specialisedretailtradeFood,beverageandtobaccoretailtradeinspecializedstoresOtherretailtradeinnewgoodsRetail trade not in storesRetailsaleofautomotivefuelHotels,campingsitesandhotelaccommodationRestaurants,barsandcanteens

241316.6(339404.7)7297216630.8

81117.77466.939370.910182.1

13576.2

.001.002

.01

.010.5.25

.25

7128.7

7333.3

811.274.7169.92545.5

3394.1

2.1

Transport,storageandcommunications(7)SeaandcoastalwatertransportCargohandlingStorageandwarehousingSalvagingofdistressedvessels,cargoesandharbourworksPostal and courier servicesTelecommunications

134 847.3(236990)2369.95924.83554.98531.6

3791.8110674.3

1.9.11

.01.05

22160.9

2369.95 332.3355.58531.6

37.95533.7

9.4



Financialintermediation,insurance,realestateandbusinessservices(8)Insurance and pension funding2

Real estate activitiesRentingofmachineryandequipment,includingtransportequipment

102 465.3(518514.1)

1873.688147.412444.3

.05.3.001

26550.3

93.726444.212.4

5.1

Community,socialandpersonalservices(9)GeneralgovernmentactivitiesEducational servicesOthermembershiporganisationsMotionpicture,radio,televison and other entertainmentLibraries,museumsandothercultural activities

538 736.1(561940.4)375773.4121941.15619.4

32030.6

3371.6

.05.01.01

.005

.02

20291.9

18788.71219.4

56.2

160.2

67.4

3.6

Totalfortertiarysector 1 017 365.3(1656849.2)

76131.8 4.6

Totalforprimaryandsecondarysectors

222959.38(838466.5)

34 004.5 4.1

Totalforprimary,secondaryandtertiarysectors

1 240324.68(2495315.7)

110136.3 4.4

Source: Hosking et al. 2013. The economic contribution of the Ocean Sector in South Africa in 2010.



ThehighestcurrentvaluedcontributionoftheoceansectorwithintheSouthAfricaneconomyisfoundtobeintheprima-rysector,duemainlytotheinfluenceofthefisheryindustry.Theoceansectorcontributesabout6.3%ofthetotalprimarysectorGDP.Thiscompareswitha2.8%contributiontoGDPinthesecondarysectoranda4.6%contributioninthetertiarysector,thelatterbeingboostedbytheshippingandrecreationindustrialactivity.

Thesecontributionsaverageout,andin2010theoverallcontributionoftheocean-linkedsectortoGDPwasapproximate-ly4.4percent.

Theseratiosandmetricshadbeenusedbythecurrentauthorstoevaluatethe2015GrossDomesticProduct(GDP)forSouthAfrica,andapplytheratiostoaforwardprojectionofGDPoverathirty-yeartimeframe.

TheestablishedGDPtoemploymenttrendsforallofSouthAfrica’sprimarysectorsandsub-sectorshavebeenextrapo-latedtothe‘OceanEconomy’sectorsandbaseduponthismethodology,anemploymentprofilefortheoceaneconomyhadbeencompiled,bothforthecurrenteconomyandfortheprojections.

ThismethodologywasusedforaSAIMIprojectinordertoestablishtheSouthAfricanOceanEconomyemploymentprofileandinordertodeterminetheextentoftheskillssurplusordeficitinSouthAfrica.

12.3.3 Stephen Hosking’s Forecast Methodology & Metrics - 2017

Subsequenttotheabovepaper,StephenHoskingundertookarevisionofthismethodologyin2017baseduponSouthAfricaneconomicdatabasedtotheyear2015,ratherthantheprevious2010data.HehadbeentaskedwithupdatingtheGDPandjobcontributions,aswellascommentingontheOperationPhakisatargetsfortheSAOceanEconomy.

The methodology used was substantially similar, and based upon:

1. TheapportionmentofGrossDomesticProduct(GDP)rules(Methodology),a. WithOceanEconomyGDPat4.4%ofSAGDPin2015–R128billion.b. WithOceanEconomyJobsat4.4%ofSAJobsin2015–425,524Jobs.

2. Amaritimelandarea(geographicallydefined)methodforestimatingGDP,a. Withthefourcoastalprovincesat39.5%ofallSAGDPin2015–R1,208billion.

This report uses a variation in the composition of the standard industrial classification (SIC) for the computation of the Ocean Economy sectors within total GDP, based upon the following factors:

• TherehasbeenanincreaseintherelativeproportionofoceandependentactivitiesperSISsub-sectorovertime,and• ThechangingrelativecontributionsoftheSICsub-sectorsintheoverallvalueofGDP.(Hosking,2017)

Thereasonsforthischangeintherelativeproportionhasbeenascribedto‘thechangingrelativecontributionsoftheSICsubsectorsintheoverallvalueofGDPisthatbroughtaboutbystructuralindustrialchangeintheSouthAfricaneconomyandglobalmarketanddomesticbusinesscycleeffects.’(Hosking,2017)



Based upon these changes, Hosking has adapted his estimated value added at factor cost by economic sector and sub-sector for the year 2015, and updated his GDP tables for all ocean sectors for 2015. The tables and their ocean economy factors are as follows:

Table 68: Estimated Value Add by Primary & Secondary Ocean Sectors in 2015 - Hosking

INDUSTRIAL SECTOR (ANDSTANDARD INDUSTRIAL CODE IN BRACKETS)

IDENTIFIED SUBSECTORSWITH OCEANSECTOR QUALIFYINGPARTS (VI > 0) INR MILLIONS(TOTAL INDUSTRY VALUE ADDED INPARENTHESIS)

PROPORTION OFSUB-SECTORQUALIFYING ASOCEANSECTOR (VI)

(R MILLIONS)

OCEANSECTOR PROPORTION OF EACH SUB-SECTOR (R MILLIONS)

PROPORTIONOF OCEANSECTOR VALUEADDED TOINDUSTRYSECTOR VALUEADDED (%)

Agriculture,forestryandfisheries(1) (71418) 3 566 5.0

Oceanandcoastalfishing(SIC151)andFishhatcheriesandfishfarms(SIC153)

3 566 1 3 566

Miningandquarrying(2) (236457) 4780 2

Petroleumandnaturalgasextractionandrelated services(SIC221)MiningofDiamonds(SIC252)andMiningandQuarrying(includingextractionandevaporationofsalt)(SIC253)

28624 0.167 4780

TotalPrimarySector 307875 8346 2.7

Manufacturing(3) (381078) 7705 2

Manufacture of food(SIC3014)ManufactureofPetroleumProducts(SIC3312)Buildingofpartsfortransportotherthanmotorvehicles,e.g.,shipsandboatsandtheirengines(SIC3846)Manufacturingnotelsewhereclassified(n.e.c.)(OceanSportsgoods)(SIC392)

55480

36638

4922

22723

0.1

0.05

0.02

0.01

5 548

1 832

98

227

Electricity,GasandWaterSupply(4) (66484) 165 1






(R MILLIONS)



Collection,PurificationandDistributionofWater(desalination)(SIC420)

16549 0.01 165

Construction(5) (108353) 10835 10

Buildingofcompleteconstructionsandcivilengineering(coastalhomes)(SIC501and502)

108353 0.1 10835

TotalSecondarySector 555915 18705 3.4

TotalPrimaryandSecondarySectors 863790 27051 3.1 Source:Hosking,2017.ProgressoverviewonthecontributionoftheSouthAfricanOceanSector(draft)



The same methodology has been applied to the tertiary sectors and the tables and their ocean economy factors are as follows:

Table 69: Estimated Value Added by Tertiary Ocean Sectors in 2015 - Hosking




(R MILLIONS)



Wholesaleandretailtrade(6) (421407) 11405 2.7

Wholesaletrade(SIC61)Retailtrade(SIC62):CateringandAccommodation(SIC64)

14026719751023692

0.0250.010.25

3 5071 9755923

Transport,storageandcommunications(7)

(260932) 12148 4.7

Watertransport(SIC72)Transportsupportservices(SIC74)Telecommunications(SIC752)

9262992374830

10.250.05

9267 4803 742

Financialintermediation,insurance,realestateandbusinessservices(8)

(605550) 52879 8.7

Insuranceandpensionfunding(SIC82)Realestateactivities(SIC84)Rentingofmachineryandequipment,includingtransportequipment(SIC85)

662781651926876

0.050.30.001

3 31449 5587

Community,socialandpersonalservices(9)

(795940) 24997 3.1

GeneralgovernmentactivitiesOthernon-marketproducersCommunity,socialandpersonalservices

467 06259793104646

0.050.010.01

23 3535981046

Totalfortertiarysector 2083829 101429 5.2

Totalforprimaryandsecondarysectors 863790 27051 3.1

Totalforprimary,secondaryandtertiarysectors

2 947619 128480 4.4

Source:Hosking,2017.ProgressoverviewonthecontributionoftheSouthAfricanOceanSector(draft)



This data and methodology provides a holistic view of the South African ocean economy as follows:

Table 70: An Analysis of the Ocean sub-sector GDP Contribution in 2015 - Hosking

INDUSTRY SECTOR SOUTH AFRICAN GDP CONTRIBUTION

R MILLIONS

OCEAN SUB-SECTOR VALUE CONTRIBUTION

R MILLIONS

% OF OCEAN SECTOR TOTAL GDP VALUE

(1)Agriculture,forestryandfisheries 71418 3 566 2.8

(2)Miningandquarrying[SeafloorPetroleum,gasandDiamonds,Salt]

236457 4780 3.7

(3)Manufacturing[Processingfish,Refiningpetroleum/gas,buildingandrepairingships,manufacturingforoceansport/recreation]

381078 7705 6

(4)Electricity,Gas,SteamandHotwatersupply[Desalinationofseawateranddistributionofthiswater,oceanatmosphericenergy]

66484 165 0.1

(5)Construction[Oceanusinghomesandfacilities,harbourdevelopment]

108353 10835 8.4

(6)Wholesaleandretailtrade[MarineTourism(CateringandAccommodation),primaryandsecondaryoceanproductselling]

421407 11405 8.9

(7)Transport,storageandcommunications[LogisticalsupportandMarineTourism(transport)]

260932 12148 9.5

(8)Financialintermediation,insurance,realestateandbusinessservices[MaritimeTradeandMarineTourismsupport(oceanproximateproperty,risk)]

605550 52879 41.1

(9)Community,socialandpersonalservices[GeneralGovernmentSupport]

795940 24997 19.5

Total 2947619 128480 100

Source: Hosking, 2017. Progress overview on the contribution of the South African Ocean Sector (draft) [DZ has inserted the first column for comparative purposes, South African GDP data from the earlier Hosking tables]



Withregardtoemploymentgeneration,Hoskinghasfirstestablishedthattherewere223,791VATpayinginstitutionsin2016andthendeterminedthattheaggregatenon-farm(formal)employmentin2016was9,671,000basedonStatisticsSA.(Statssa2017b).

Hoskingthenusesthisemploymentbaselineandtheestablishedoceaneconomyratioof4.4%ofGDPtocalculateoceaneconomyemploymentonthefollowingbasis:‘Assuminglinearityacrosssectorsintherelationshipbetweenaggregateincomeandemployment,theoceansectoremploymentinSeptember2016isestimatedtobe:

4.4/100of9671000=425524jobs.’(Hosking,2017)

Theauthorofthisreportdisagreeswiththenon-farm(formal)datausedbyHosking,andhasusedQuantecDatainformation,whichisbaseduponStatisticsSAtoderiveafigureof14,625,990fornon-farm(formal)jobs.Byapplyingthesameassumptionoflinearityacrossthesectorsforaggregateincomeandemployment,thefollowingoutcomeisderived:

4.4/100of14,625,990=643,544jobs(Currentauthor,2019)

Thedifferenceinthiscalculationis218,020jobs,anincreaseof51percent.

ThisdifferenceinmethodologybetweenHoskingandthecurrentauthorsneedstobereconciled.

Comments on overall development of the SA Ocean Sector (Hosking):-

1. TorealiseR177billionby2033,realgrowthof1.82%p.a.-Notoverlyambitious.2. Torealise1millionJobsby2033,realgrowthof4.9%p.a.-Thisgrowthisambitious.3. SAfishproductionismainlyfromwildfish,aquacultureisminor:

• EventhoughAquacultureDevelopmentZones(ADZs)havebeensetaside,• Suggestingtherearetechnologicalormarketpriceconstraints.

4. StatisticsSAdoesnotidentifythenumerousOceanSectorinterestsintheirdata.5. Poorbusinesscycleconditionsin2015to2018willresultinlowOceanSectorgrowth.

The following warrant further research (Hosking):-

1. Thedynamicsoftheoceancontributionpersub-sector.2. Intermediatealternativestomarineaquaculture,suchaswinningandregulatingnewfishquotasininternational

watersandorwithinSouthAfrica’sIslandEEZ.3. Thescopeandmechanismsthroughwhichtheoceanattributeinfluencesspending(andincome)intheconstruction

andtertiarysub-sector.4. ThecomparativetransportcostdisadvantageoftheEasternCapeandNorthernCape.



12.3.4 Current Study GDP Forecast Methodology & Metrics

ThetwoHoskingreportsasdetailedabovehavebeenperusedandthefundamentalprinciplesfordefiningtheoceaneconomyinSouthAfricaadoptedinthemacroeconomicGrossDomesticProduct(GDP)forecastovertwentyyears.

The South African and Eastern Cape Ocean Economy forecast over twenty years from 2019 to 2038 has been under-taken in four steps as follows:

1. AnalysetheSouthAfricanandEasternCapeeconomiespastperformanceoverthepastten-yearsto2018,inordertoestablishtrendsandmetricsforlookingforward,

2. PrepareaGDPforecastovertwentyyearsbaseduponacrediblecompoundaveragegrowthrate(CAGR)forbothSouthAfricaandtheEasternCape,

3. ApplytheHoskingderivedvalueaddedmetricsatfactorcosttothemajorsectorsandsub-sectorsinordertoestab-lishtheOceanEconomyGDP,and

4. ApplythesameHoskingderivedvalueaddedmetricsatfactorcosttothemajorsectorsandsub-sectorsinordertoestablishtheOceanEconomyemploymentprofile.

12.3.4.1SouthAfrica’sBaselineMetricsforthe20YearForecast

TheSouthAfricaneconomyandsocio-demographicprofileasat2018isanalysedinsomedetailinsection13.1hereafterandananalysisofthepastdecadeofeconomicperformancehasbeenundertakeninsection5.2above.Togetherthesetwosetsofeconomicdataprovideausefulinsightintothecurrentsituationandthetrendsupto2018.

WithregardtotheprognosisfortheSouthAfricaneconomygoingforward,reliancehasbeenplacedonSouthAfrica’sNationaltreasuryhaveformulatedanopinionasfollows:

‘Theeconomicoutlookhasweakenedsincethe2018MTBPS,withgrowthnowprojectedtoincreasefrom1.5percentin2019to2.1percentin2021.Therevisionstakeintoaccountweakerinvestmentoutcomesin2018,amorefragilerecoveryinhouseholdincomeandslowerexportdemandthanexpectedduetomoderatingglobalgrowth.Consumerpriceindexinflationisexpectedtoaverage5.2percentin2019,upfrom4.7percentin2018,inresponsetorisingfoodprices.TheglobaloutlookisbecominglesssupportiveofSouthAfrica’seconomy,withsignsofslowergrowthinChinaandEurope.’(NationalTreasury,2019)



Their primary economic indicators looking forward have been estimated as follows:

Figure 20: National Treasury Macroeconomic Performance and Projections

Source: National Treasury, 2019. Budget Review 2019

TheNationalTreasurymacroeconomicprojectshavebeenreadinthecontextoftheStandardIndustrialClassification(SIC)sectorsperformanceandtrendsoverthepastfiveyears,andaseriesofmetricsforforwardprojectionsofthesesectorsformulated.Certainsectorshavebeenindeclineoverthepastyears,andthisdeclinehasnotbeenperpetuatedandforecastgoingforward.Forthesesectorsrelativelylowormildgrowthhasbeenforecastandthesectoralaveragesandtotalsforthenexttwentyyearsareindicatedinthecomprehensivetablebelow:

Table 71: South African GDP Past Profile – Informing Forecast Rate Per Annum


Actual Year 1-5 Year 6-10 Year 11-15 Year 16-20Real Gross Value Added (GVA) at basic prices, R millions, constant 2010 prices. 2013 - 2018 2019 - 2023 2024 - 2028 2029 - 2033 2034 - 2038South Africa GVA in R millions, Constant 2010 Prices % % ∆ p.a. % ∆ p.a. % ∆ p.a. % ∆ p.a. % ∆ p.a.

Total - Economic Sectors 100% 0.92% 1.00% 1.20% 1.50% 2.00%A gric ulture, fores try and fis hing 2.6% 0.85% 1.25% 1.25% 1.50% 2.00%M ining and quarry ing 8.1% -0.02% 0.00% 0.50% 1.00% 1.75%M anufac turing 13.5% 0.30% 0.75% 1.00% 1.00% 1.50%E lec tric ity , gas and water 2.3% -0.69% 0.75% 1.00% 1.00% 1.75%Cons truc t ion 3.8% 0.94% 0.50% 0.75% 1.00% 2.00%W holes ale and retail t rade, c atering and ac c om m odation 15.1% 1.11% 1.00% 1.00% 1.50% 2.00%Trans port , s torage and c om m unic at ion 9.6% 1.84% 1.50% 1.75% 2.00% 2.50%F inanc e, ins uranc e, real es tate and bus ines s s ervic es 22.4% 2.21% 2.25% 2.50% 3.00% 3.00%G eneral governm ent 16.7% 1.26% 1.00% 1.00% 1.50% 1.50%Com m unity , s oc ial and pers onal s ervic es 6.0% 1.38% 1.00% 1.25% 1.50% 2.00%

Regional Output and GVA at Basic Prices by Industry



Employment by Industry Jobs Actual GDP Actual Job Growth Year 1-5 Year 6-10 Year 11-15 Year 16-20Employment (Number): Total 2013 - 2018 2013 - 2018 Factor Of 2019 - 2023 2024 - 2028 2029 - 2033 2034 - 2038Employment By Industry. In Job Numbers % % ∆ p.a. % ∆ p.a. GDP Growth % ∆ p.a. % ∆ p.a. % ∆ p.a. % ∆ p.a.Total - Economic Sectors 100% 1.29% 0.92% 1.40 1.55% 1.67% 1.78% 1.83%A gric ulture, fores try and fis hing 7.0% 1.83% 0.85% 2.16 1.80% 2.00% 2.20% 2.50%M ining and quarry ing 3.1% -2.36% -0.02% 105.88 -0.20% -0.20% 0.00% 0.00%M anufac turing 9.3% 0.20% 0.30% 0.66 0.25% 0.50% 0.50% 0.50%E lec tric ity , gas and water 0.4% 0.72% -0.69% 1.04 1.00% 1.00% 0.75% 0.50%Cons truc t ion 6.2% 3.94% 0.94% 4.18 3.50% 4.00% 4.50% 4.50%W holes ale and retail t rade, c atering and ac c om m odation 22.4% 2.56% 1.11% 2.31 2.75% 3.00% 3.25% 3.50%Trans port , s torage and c om m unic at ion 4.4% 0.76% 1.84% 0.41 1.00% 1.50% 1.75% 2.00%F inanc e, ins uranc e, real es tate and bus ines s s ervic es 17.6% 2.85% 2.21% 1.29 3.00% 2.50% 2.50% 2.50%G eneral governm ent 12.1% 0.36% 1.26% 0.28 0.35% 0.35% 0.30% 0.25%Com m unity , s oc ial and pers onal s ervic es 17.4% 2.00% 1.38% 1.45 2.00% 2.00% 2.00% 2.00%


Table 72: South African Jobs Past Profile – Informing Forecast Rate Per Annum


12.3.4.2 EasternCapeBaselineMetricsforthe20YearForecast

TheEasternCapeeconomyandsocio-demographicprofileasat2018isanalysedinsomedetailinsection13.1hereafterandananalysisofthepastdecadeofeconomicperformancehasbeenundertakeninsection5.2above.Togetherthesetwosetsofeconomicdataprovideausefulinsightintothecurrentsituationandthetrendsupto2018.

Table 73: Eastern Cape GDP Past Profile – Informing Forecast Rate Per Annum


Actual Year 1-5 Year 6-10 Year 11-15 Year 16-20Real Gross Value Added (GVA) at basic prices, R millions, constant 2010 prices. 2013 - 2018 2019 - 2023 2024 - 2028 2029 - 2033 2034 - 2038Eastern Cape GVA in R millions, Constant 2010 Prices % % ∆ p.a. % ∆ p.a. % ∆ p.a. % ∆ p.a. % ∆ p.a.

Total - Economic Sectors 7.5% 0.87% 0.85% 1.13% 1.63% 2.00%A gric ulture, fores try and fis hing 1.6% -1.56% 0.00% 0.50% 1.00% 1.50%M ining and quarry ing 0.3% -0.26% 0.00% 0.30% 0.50% 0.75%M anufac turing 13.6% 0.10% 0.50% 0.75% 1.25% 1.50%E lec tric ity , gas and water 1.2% -0.49% 0.00% 0.50% 1.00% 1.25%Cons truc t ion 3.8% 0.39% 1.00% 1.50% 2.00% 2.50%W holes ale and retail t rade, c atering and ac c om m odation 19.5% 0.58% 1.00% 1.50% 2.00% 2.50%Trans port , s torage and c om m unic at ion 8.9% 1.57% 2.00% 2.00% 2.50% 3.00%F inanc e, ins uranc e, real es tate and bus ines s s ervic es 20.6% 1.58% 2.00% 2.00% 3.00% 3.00%G eneral governm ent 22.9% 1.10% 1.00% 1.00% 1.50% 2.00%Com m unity , s oc ial and pers onal s ervic es 7.5% 0.87% 1.00% 1.20% 1.50% 2.00%




Table 74: Eastern Cape Jobs Past Profile – Informing Forecast Rate Per Annum


12.3.4.3 SAandEasternCapeBaselineMetricsforthe20YearForecast

TheseforecastmetricsasestablishedforSouthAfricaandtheEasternCape,forbothGDPandEmploymentorJobs,havebeenusedtoproducetheeconomicforecastswhichareprovidedinmoredetailintheearliersection5.2ofthisreport.

Employment by Industry - Eastern Cape Actual GDP Actual Job Growth: Year 1-5 Year 6-10 Year 11-15 Year 16-20Employment (Number): Total 2013 - 2018 2013 - 2018 Factor Of 2019 - 2023 2024 - 2028 2029 - 2033 2034 - 2038Employment By Industry. In Job Numbers % % ∆ p.a. % ∆ p.a. GDP Growth % ∆ p.a. % ∆ p.a. % ∆ p.a. % ∆ p.a.Total - Economic Sectors 100% 1.69% 0.87% 1.93 1.90% 2.20% 2.40% 2.40%A gric ulture, fores try and fis hing 8.1% 2.29% -1.56% -1.47 2.00% 2.50% 3.00% 3.00%M ining and quarry ing 0.2% -0.21% -0.26% 0.79 0.00% 0.50% 0.75% 0.75%M anufac turing 8.0% -0.39% 0.10% -3.84 0.50% 0.75% 1.00% 1.00%E lec tric ity , gas and water 0.3% 1.07% -0.49% 2.18 1.50% 1.75% 2.00% 2.00%Cons truc t ion 5.9% 4.17% 0.39% 10.76 4.00% 5.00% 5.00% 5.00%W holes ale and retail t rade, c atering and ac c om m odation 23.5% 2.51% 0.58% 4.35 5.00% 5.00% 5.00% 5.00%Trans port , s torage and c om m unic at ion 3.6% 0.56% 1.57% 0.35 2.00% 2.00% 2.00% 2.00%F inanc e, ins uranc e, real es tate and bus ines s s ervic es 12.7% 2.58% 1.58% 1.63 2.00% 2.50% 3.00% 3.00%G eneral governm ent 17.0% 0.09% 1.10% 0.08 1.00% 1.00% 1.00% 1.00%Com m unity , s oc ial and pers onal s ervic es 20.8% 1.93% 0.87% 2.21 1.00% 1.00% 1.20% 1.20%



12.4 SAIMI - SA MARITIME ROADMAP - 2017

ThescopeoftheMaritimeRoadMapcoversboththemaritimeandmarinedomains.“Maritime”isdefinedas“connectedwiththesea,especiallyinrelationtoseabornetradeornavalmatters”,whereas“marine”isdefinedas“relatingtoorfoundinthesea”.

ThethematicareasthatSAIMIhaveusedtodefinethescopeoftheMaritimeRoadMapareillustratedinthefigurealongside.

Furthertothis,thethreekeyelementsoftheMaritimeRoadMapareseentoberesearch,innovationandknowledgemanagement.

TheMaritimeRoadMapfeaturesavisionandmissionandfurthermoreidentifiesaseriesofeighthigh-levelobjectives,eachofwhichcharacterisesandcomplementsthestatedvisionforthemaritimesector.Eachoftheseobjectivessubsequentlytranslatesintoanumberofactionswhichcollectivelymapouttheroadthatneedstobefollowedtogetfromthecurrentstatetothedesiredstate.

FollowingthelaunchofPhakisa:OceansEconomy,theSAIMIprojectteamrananotherroundofregionalworkshopsandliaisedwiththeOceansEconomySecretariattoensurealignmentbetweentheMaritimeRoadMapandthePhakisa:OceansEconomyinitiatives.

TheobjectivesneededtoattainthedesiredstateforSouthAfrica’smaritimesectorwereidentifiedduringtheIntegratedMarineandMaritimeTechnologiesThought-LeadersIndaba,updatedwithinputsfromtworoundsofregionalworkshops,confirmedthroughinterviewsandvalidatedthroughaliteraturereview.Theeightobjectivesarepresentedinthefigurewiththeirinterdependencesindicatedbythebluearrows.TherealisationofObjectives1to7supportstherealisationofObjective8,whichcanbeclassifiedastheoverarchingobjective.

Figure 21: Operation Phakisa Four Labs – Problems and Aspirations

Source: SAIMI SA Maritime Sector Roadmap, 2015.



ThespecificmissionsupportedbytheRoadMapis:“Unlocking South Africa’s maritime potential through research, development and innovation”

Themissionsupportsthefollowingoverarchingvision:“By 2030 South Africa is globally recognised as a maritime nation”

Objective5statesthat“Wehavearesearch,innovationandknowledgemanagementsystemthatisrelevant,well-func-tioning,targetedandmulti-disciplinary”

The Road Map state the following regarding research, innovation and knowledge management:

“Thecurrentstateofresearch,innovationandknowledgemanagementinSouthAfricaisstillfarremovedfromthedesiredstate.Anumberofopportunitiesexist,however,andquiteafewhaverecentlybeencreated,especiallysincethelaunchofPhakisa:OceansEconomy.TwoexamplesareSAIMI,whichisfundedbytheDepartmentofHigherEdu-cationandTraining(DHET)andhasbeenestablishedtocoordinateallskillsandcapacitybuildingactivitieswithinthePhakisa:OceansEconomyprocessandtheSouthAfricanMarineResearchandExplorationForum(SAMREF),aplat-formthataimstofostercollaborationbetweenthescientificcommunityandtheoilandgasindustryaswellasotheroffshoreresourceextractionindustries.

Despitethesepromisingdevelopments,therearestillanumberofareasthatneedimprovement.Forexample,thereisstillalackofrelevanttertiaryeducationinmaritime-relatedsubjects.Ininstanceswheresuchsubjectsarebeingoffered,toomuchemphasisseemstobeplacedonacademictrainingasopposedtopracticaltrainingorapprentice-ships.Inaddition,thereisstillaproblemwiththequalityandrelevanceoffurthereducationandtraining(FET)basedqualificationstothemaritimesector.

ThedevelopmentofscarceskillsandtheretentionofpeoplewithsuchskillsinSouthAfricaisalsoanissueofcon-cern.Notonlyarethereveryfewindividualswithscarceskillsinthemaritimesector,theseindividualsarefindingmorelucrativeemploymentoverseas,andthosewhoarestillinthecountryareretiredorclosetoretirementage.Inaddition,jobswithscarceskillsrequirementsneedtobecreatedwithinSouthAfricainordertoabsorbnewentrantsintothejobmarket.

ThereisalsoastrongneedtodevelopindustryrelevantR&D,technologiesandinnovationforthemaritimesector.Theproblemisthatuniversitiesdonotcurrentlyhouseenoughdepartmentsformaritimerelevantdisciplines.Inaddition,universityIPregulationsoftenstatethattheIPneedstoremainwiththeuniversity,whichcanseverelyinhibitthefundingoruseofthisworkbythemaritimeindustry.(SAIMI,2017.MaritimeRoadmap.)



The actions for achieving the desired state through research, innovation and knowledge management are seen as being the following:

Figure 22:Actions Required for R&D, Innovation and Knowledge Management.

Source: SAIMI SA Maritime Sector Roadmap, 2015.

Herewith an overview of current opportunities as identified by stakeholders in the maritime sector.

Table 75: Snapshot of Opportunities in Maritime Sector – SAIMI Roadmap 2017

KNOWLEDGE MANAGEMENT R&D. TECHNOLOGY AND INNOVATION EDUCATION AND SKILLS DEVELOPMENT

National Science & Technology Forum (NSTF):Thisisastakeholderforumthatfocusesoncommunicationaroundscience,engineering,technologyandinnovation(SETI)policyissues,andpresentsgoodnetworkingopportunitiesformembersofthemaritimesector.

Marine Science Platform (DST): The Marine SciencesPlatformunderDSTprovidesapolicyplatformforthemaintenanceofmarineandoceanicresearchandhumancapitaldevelopmentthroughtheprovisionofresources.

Heritage Beaches project:This project presents an opportunitytodevelopmaritimearchaeologyrelatedskillsamongyoungpeople.

OceanSAfrica: The OceanSAfrica initiativeisdesignedtotakeexistingoceanographyresearchandpre-operationaloutputs,routinelyplacetheminthepublicdomaininahighlyaccessibleformat,anddemonstratedirectbenefittokeysocietalstakeholdersthroughtheprovisionoftailoredinformationforenvironmentaldecisionmakinginthemarineandfreshwaterdomains.

The South African Environmental Observation Network (SAEON):TheEgagasiniNodeinparticularhousesanumberoflong-termobservationandmodellingresearchprogrammesoverarangeofdisciplinesfromoffshoremarineprotectedareastobenthicbiodiversityandphysicaloceanographyintheoffshoreandcoastalenvironments.TheElwandleCoastalNode,whichestablishedtheAlgoaBaySentinelSite,planstoreplicateLongTermEcologicalResearch(LTER)sentinelsitesaroundthecoastofSouthAfrica,thesub-AntarcticIslandsandAntarctica.

SAMSA:SAMSA runs various initiativessuchasprovidingport-graduatestudentswiththeopportunitytostudyattheWorldMaritimeUniversity(WMU)andsubsidisingthesalariesofexpertstoteachattheCapePeninsulaUniversityofTechnology(CPUT)



12.5 SAIMI OVERVIEW - RESEARCH & TECHNOLOGY IN SA MARITIME SECTOR - 2017

Inthepublicationknownas‘ReflectionsonthestateofresearchandtechnologyinSouthAfrica’sMarineandMaritimesectors’,theauthorshavepresentedarangeofdiscoursestoreflectonandhighlightthecurrentstatusofResearchandDevelopment(R&D)andtechnologyinthemarineandmaritimesectorsinSouthAfrica.

The preface to the publications introduces it as follows:

“Inhis2014StateoftheNationAddress,PresidentJacobZumahighlightedthetriplechallengeofpoverty,inequalityandunemployment.Addressingthischallenge,inparticularthroughtheimplementationoftheNationalDevelopmentPlan,isakeypriorityfortheSouthAfricangovernment.Keyeconomicdriversthatareofsignificanceforthemarineandmaritimesectorsaretourism,theGreenEconomy,infrastructuredevelopmentandmanufacturing.MaximisingthepotentialofthesedriverscansubstantiallyincreasetheabilityofthemarineandmaritimesectorstocontributetoSouthAfrica’seconomy.

SouthAfricahasnotfullyexploiteditsmarineandmaritimeeconomy,whichjustifiestheemergingemphasisontheSouthAfricanoceaneconomy.TheSouthAfricangovernmenthasanimportantroletoplayinpromotingthedevelop-mentofthiseconomythroughestablishinganenablingpolicyenvironment,andensuringeffectiveregulationandap-propriateresourceallocation.Researchanddevelopment(R&D)inmarineandmaritimeindustries,aswellasresearchandacademicorganisations,producemarineandmaritime-relatedknowledgeandtechnology.ThisfocusonR&Dgivesimpetustothedevelopmentofthecountry’smarineandmaritimeresourcesandhasthepotentialtocontributetothegrowthoftheoceaneconomy.

SouthAfrica’soceansandcoastsshouldbedevelopedinaresponsiblemannertofacilitatethesustainableutilisationofmarineandmaritimeresourcesandsecurethelong-termgrowthoftheoceaneconomy.Knowledgeandtechnolo-gyplayanimportantroleinunderstandingtheocean,itsresourcesandhowtoutilisetheseresourcesinaresponsiblemannertoensuretheircontinuedavailabilityforgenerationstocome.

TheSouthAfricanMaritimeSafetyAuthority(SAMSA)hasakeyroletoplayinsupportinggrowthinthemarineandmaritimesectorsthroughensuringsafetyoflifeandpropertyatsea,preventingandcombattingpollutionfromships,andpromotingtheRepublic’smaritimeinterests.TheDepartmentofScienceandTechnology(DST)alsohasanim-portantroletoplayinbuildinganddevelopingtheoceaneconomy,forinstance,throughitsSocio-economicPart-nershipsProgramme,whichenhancesgrowthanddevelopmentprioritiesthroughtargetedscienceandtechnologyinterventionsandthedevelopmentofstrategicpartnershipswithothergovernmentdepartments,industry,researchinstitutionsandcommunities.TheDSTisalsoinvolvedinvariousmarinescienceresearchinitiativesthathavethepotentialtolinkbasicresearchtoappliedresearch,increasehumancapital,developR&Dandbuildcloserlinkswithindustry.

ThisbookendeavourstocontributetotheseobjectivesbypresentingdiversecontributionstoreflectonthestateofR&DandtechnologyinSouthAfrica’smarineandmaritimesectors.Itscontributionliesinmakingthepracticalappli-cationofR&Dandtechnologyinthemarineandmaritimesectorsexplicit,andhighlightingthewaysinwhichthiscanbestrengthenedandimproved.”(FunkeN,2014.Pageii)



After the introduction the book is divided into four parts with the following themes:

Part2:Thewayforwardforthemaritimesector:Regulatoryandstrategicviews,Part3:Currentresearchandtechnologyadvancesinthemarinesciences,Part4:Researchinthehumanitiesforthemaritimesector,andPart5:InfrastructureandtechnologysupporttotheSouthAfricannavy.

Noneofthechapterswithinthesethemesaddressmaritimeskillseitherdirectlyorindirectly,andthemostusefulforthepurposesofthispaperischapterfourtitled‘ScenariosfortheSouthAfricanMaritimeSector’,andwhichintroducesfourscenariosintotheSouthAfricanmaritimesectorandreflectsonhowbesttousethesescenariosasatooltosupportdecisionmakingandplanning.Thechapterhasbeenprecisasfollows:

“Theauthorsarguethataverychallengingpartofanyscenariodevelopmentprocessistodisseminatethemandtotrytoensurethattheyaretakenupbytheirintendedtargetaudiences.ApotentialwayforwardfortheMaritimeNationscenariosistopresentthemtoawiderangeofstakeholdersinthesectorforfurtherinputs,refinementsandultimatelybuy-ins.Thiswillrequireakeydecision-makerinthesectortotakeownershipofthescenarios,andthedevelopmentandimplementationofanadequatelyresourcedcommunicationstrategy.Therevisedscenarioscouldthenbeusedforstrategydevelopment,planningandmanagementinthemaritimesector.”(FunkeN,2014.Page12)

Thechapteridentifiesaseriesofdriversofchangewhichareseentobethemostsignificantandthemostuncertain,andcouldaffecttheextenttowhichSouthAfricaisamaritimenationbytheyear2030.Inordertodemarcatethescopeofthesectorthemajorthemesidentifiedwereshippingandtransport,marineresourcesandmarinetourism.Thesub-themesidentifiedindicatedapplicationareassuchaslogisticsinfrastructure,offshoreenergyandmining,sportsandrecreationandleisure.Thisoverviewprovidedacontextwhichhighlightedthethreemainthemesinrelationtotheirsub-themes,andthenidentifiedthe‘cross-cuttingthemes’whichindicatedthestronginter-relationshipsbetweenthevariousmaritimesectors.



Figure 23: Main themes, sub-themes and cross-cutting themes for the SA maritime sector

(Source:ThewayforwardfortheMaritimeSector.FunkeN,2014.Page56)



Thedriversofchangewerefurtherevaluatedinaseriesofpresentationsandworkshopswhichrevealedthekeycharacteristicsinrelationtothedriversofchange.Oneoftheserelatestotheextentoftheuptakeofresearch,innovationandknowledgemanagementinthemaritimesector,whereasanotherrelatestotheextenttowhichthesectorisunified,withaunifiedsectorhavingsharedobjectives,coordinatedactivitieswhichareefficientinthedeploymentofresourcesandeffectivelyachievethesharedobjectives.

These two characteristics constitute the axes for the scenario matrix, as presented in the figure below. The two axes bring about four possible scenarios.

Figure 24: Scenario Matrix for the SA maritime sector

(Source:ThewayforwardfortheMaritimeSector.FunkeN,2014.Page58)

Thebottomleftscenariointhefiguredescribesafuturewherethemaritimesectorisdividedandwherethereislimiteduptakeofresearch,innovationandknowledgemanagement-‘LostatSea’.Thebottomrightscenariodescribesafutureenvironmentwherethesectorisdivided,

buttheuptakeofresearch,innovationandknowledgemanagementisextensive.Thisrepresentsanopportunisticmaritimenationanditiscalled‘IslandsofExcellence’.Thetopleftscenariodescribesafuturewherethereislimiteduptakeofresearch,innovationandknowledgemanagement,butwherethesectorisunified.Thisresultsinamaritimenationlaggingbehindinternationalpeersandcompetitorsinrelationtotechnologydevelopmentanduptake.Thisscenarioiscalled‘RowingTogether’.

Thefinalscenariointhetoprightcombinestheextensiveuptakeofresearch,innovationandknowledgemanagementwithaunificationofthesectortosupportaprosperousmaritimenation.Thisscenarioiscalled‘FullSteamAhead’.

Thisscenariorepresentsutopiaforthesectorunderwhichitisunifiedinitsapproachtoremaingloballyrecognisedasaleadingmaritimenationandbenefitsfromanuptakeinresearch,highlevelsofinnovationandeffectiveknowledgemanagement.Thepathtowardsthisoptionshouldbeconsciouslyplannedandincorporatedintogovernmentandprivatesectorstrategiesandplans.



12.6 SAIMI SKILLS DEVELOPMENT PROJECTS BEING IMPLEMENTED

Thefollowingprojectseitherhavebeenimplemented,oraretheprocessofbeingimplementedbytheSouthAfricanIn-ternationalMaritimeInstitute(SAIMI)

14.6.1 Skills Development – Ocean & Maritime Sector Initiatives

Table 76: FADI Alternative Livelihoods Project

# LABEL NARRATIVE

1 ProjectName FisheriesandAquacultureDevelopmentInstitute(FADI)alternativelivelihoodsproject.

2 ProjectLocation PortElizabethMetro,EasternCape

3 ProjectOwner/Driver SAIMIofferingskillstrainingthroughtheFisheriesandAquacultureDevelopmentInstitute(FADI),intheWesternCapeandEasternCape


TheSAIMIfundingwillsupportaspecified,time-boundandtargetedprogrammetoprovideskillsdevelopmenttoidentifiedbeneficiariesalongwithcoachingandmentorshiptoensurethesustainabilityoftheintervention,whichaccordswithSAIMI’sobjectiveofsupportinglastingchange.

Seasonalfishingworkers,fishersaffectedbyfishstockavailabilityandaccess,theunemployedandyouth.

Skillstraininginentrepreneurshipandconstruction.

Thisprojectistargetedatprovidingtraining,skillsdevelopmentandmentoringtoseasonalandunder-/unemployedfishersincoastalcommunitiestoassisttheminidentifyingandestablishingnewenterpriseopportunitiesandalternativesourcesofincome.

Empowermentofsmall-scalefishersfromcoastalfishingcommunitieswithalternateskillsinentrepreneurshipandconstruction.Thisnewskillsgainmakesitpossibleforthemtoearnincomeasskilledconstructionworkersaswellasentrepreneurs(i.e.earnincomebeyondfishing).

TheprojecttakesplaceagainstaglobalchallengeofdecliningfishstockswhichalsoaffectsSouthAfrica,andpresentschallengesoffoodandincomesecurity,aswellasenvironmentaldegradation.Theproject’saimtobuildcapacityinthesecommunitiestoearnincomefromalternativesourcesthusalsosupportsthedrivetomaintainthesustainabilityofSouthAfrica’sfisherybydivertingsubsistencefishersintoalternativelivelihoodswithlowerenvironmentalimpactandmeaningfulincome.

5 CapitalValue[Rm] R1494000-20xPEbeneficiaries(70totalinWCandEC)-over7months



# LABEL NARRATIVE

6 Construction Start Date N/A

7 ConstructionsJobsp.a. N/A

8 Operation Start Date Started1April2019

9 OperatingCostsp.a. N/A-thisisaone-timetraininginterventionatthecostindicatedabove,withcontinuedmentoringandcoachingsupportuntilsuccessfultheyareeithersuccessfullyemployedorstartedtheirownbusinesses.

10 OperatingJobsp.a. 20learnerswhowillhaveskillstoeitherbeemployedorstarttheirownbusinesses

11 TurnoverorValue(GVA) Inemploymentterms,itisprojectedthattheprojectwillgenerate97additionaljobswithinatwo(2)yearperiod.Thisincludesdirect,indirectandinducedjobs.

12 EconomicLinkages Construction/Entrepreneurship

13 ‘Lever’to‘Unlock’ No,howevertheprojectsuccessissubjecttothereleaseoffundsfromtheNationalSkillsFund

14 AnyOtherPoints -

15 ProjectMaporImage,orboth. PortElizabethMetro,EasternCape

Source: South African International Maritime Institute (SAIMI), 2019. Mrs. Soraya Artman.



Table 77: SEASI Skills Training in the Squid Industry

# LABEL NARRATIVE

1 ProjectName SEASISkillstrainingintheSquidIndustry

2 ProjectLocation BetweenPortAlfredandTsitsikamma

3 ProjectOwner/Driver SAIMIofferingskillstrainingthroughtheSEASI(SmallEmployers’AssociationfortheSquidIndustry


TosupporttheimplementationofaskillsdevelopmentprogrammefortheeconomicallyimportantsquidfisheryintheEasternCapeinordertoaddresschallengesofgapsinscarceandcriticalskillsandanageingofficerclass;todevelopskillsinvesselmaintenance,andtoprovidethenecessarysea-timefornewsea-goingpersonneltobecertified;toprovideemploymentopportunitiesforyouthfromdesignatedgroups;andtopositionthesquidindustryasanattractiveemploymentopportunitywithassociatedbenefitsforcommunitysocio-economicdevelopmentandpovertyalleviation.

Currentfishermenandunemployedyouthfromdesignatedgroupsrecruitedintotheindustry.

Skillstraining.Thisprojecttargetsaneconomicallyimportantfisherysector;andwillenablepersonnelwhohavelongbeenworkingintheindustryatlowlevels,toachieveformalqualifications(iewatchkeeper/mate,motorman/driver,andskipper)andmoveupthroughtheranks,aswellasbroadeningthesector’sbaseofqualifiedskillsbyprovidingqualificationstonewentrants.

SEASIhasaparticularinterestintrainingandskillsdevelopmenttoimprovethehumanresourcescapacityofthesquidindustry,inwhichtheofficercorpsonvesselsareageing(andpredominantlywhite)andthereisalackofsufficientlyskilledandqualifiedpeopletoreplacethemastheymoveon.Theindustrythusneedstoupskillitscurrentemployeestomoveupthroughtheranksandattractnewentrantsbyofferingsolidcareerprospects.SEASIhasinturnidentifiedtheneedfornewentrantsasanopportunitytoaddressyouthunemploymentinthesquidindustry’smainareasofoperation,fromPortAlfredtoTsitsikamma.

5 CapitalValue[Rm] R8956311.15overaperiodof3years



8 Operation Start Date Tocommenceduring2019

9 OperatingCostsp.a. N/A-thisistraininginterventionatthecostindicatedabove.

10 OperatingJobsp.a. 1430learnerswillbetrainedovertheperiod



# LABEL NARRATIVE

11 TurnoverorValue(GVA) Earningpotentialoflearnerswillimproveastheymoveuptheranksandnewentrantswillearnaliving

12 EconomicLinkages Economicdevelopment-exports/retailers

13 ‘Lever’to‘Unlock’ TheprojectneedstobeapprovedbytheNMUTenderAdjudicationCommittee

14 AnyOtherPoints -

15 ProjectMaporImage,orboth. BetweenPortAlfredandTsitsikamma

Source:SouthAfricanInternationalMaritimeInstitute(SAIMI),2019.Mrs.SorayaArtman.



Table 78: TETA Small Business Support

# LABEL NARRATIVE

1 ProjectName TETASmallBusinessSupport

2 ProjectLocation Eastern Cape

3 ProjectOwner/Driver SAIMIistheImplementingAgent


SmallbusinesssupporttoTETAregisteredsmallcompanies,registeredtomaritimeStandardIndustrialClassification(SICcodes).

smallcompanies,registeredtomaritimeStandardIndustrialClassification(SICcodes).

AppointmentofSDF’sandprovisionoftraining,mentoringandcoachingtolearnersofregisteredcompanies.

ToincreasesmallmaritimeregisteredcompaniestosubmitATR/WSPtoTETAandincludessupporttocompaniescurrentlysubmittingbutnotreceivingsupport.

Increasedskillsandeconomicactivity.

5 CapitalValue[Rm] R900000overaperiodof2yearsfor36companiesintheE.C.(R25000percompany)



8 Operation Start Date Started2018

9 OperatingCostsp.a. N/A-thisistraininginterventionatthecostindicatedabove.

10 OperatingJobsp.a. 36companies-employmentsstatspercompanyisnotavailable

11 TurnoverorValue(GVA) Improvedskillsofemployees,whichwilltranslateintoimprovedoperationsandultimatelyimprovedprofitsforcompanies.TETAwillalsobenefitfromstatisticsforreportingpurposes-forresultsgeneratedbycompanieswhowillnowbeparticipatingintheATR/WSPsubmissionstoTETA.

12 EconomicLinkages Economicdevelopment-exports/retailers

13 ‘Lever’to‘Unlock’ N/A

14 AnyOtherPoints -


Eastern Cape




Table 79: CMBT Artisan Training

# LABEL NARRATIVE

1 ProjectName CompetencyBasedModularTrainingforArtisans


3 ProjectOwner/Driver SAIMIthroughTVETColleges/TrainingProviders


ThisinterventionaimstoprovidetrainingbasedontheCompetencyBasedModularTraining(CBMT)Modeltounemployedyouth.ThisinterventionaimstoincreasetheemployabilityofTraderelatedlearnersbycompletingtheCBMTpracticalskillsmoduleswhilstcompletingtheirNationalCertificate(Vocational)Studies.

TheprogrammewillbepilotedinselectedcoastalTVETcollegesandSAIMIwillberesponsiblefortheimplementation,monitoringandevaluationofthisprogramme.ThiswillincludetheidentificationofmerSETAapprovedworkplaces.CompaniesintheMarineManufacturingspacewillbetargetedforworkplacementopportunities.

Youthunemploymentwillbeaddressed.

CompetencyBasedModularTraining(CBMT)inthePlumbingtradeTheprojectwillprovideopportunitiesforlearnerstobecomeskilledthroughvariousstreams.Theapproachtotheprogrammewillbepractical,withachievableandrelevantactivitiesinplaceforlearnerstoobtainpracticalexperienceandwheretheoryispractisedinanactualworkplaceenvironment.

5 CapitalValue[Rm] R774000overaperiodof9months



8 Operation Start Date Tostartin2019/2020

9 OperatingCostsp.a. N/A-thisisaone-timetraininginterventionatthecostindicatedabove,untilsuccessfultheyareeithersuccessfullyemployed.

10 OperatingJobsp.a. 15

11 TurnoverorValue(GVA) Earningpotentialoflearners.

12 EconomicLinkages MaritimeandMarinesector/boatbuildingandrepairs

13 ‘Lever’to‘Unlock’ TheprojectneedstobeapprovedbytheNMUTenderAdjudicationCommittee

14 AnyOtherPoints -


NelsonMandelaMetro,EasternCape




Table 80: Mentorship Training

# LABEL NARRATIVE

1 ProjectName MentorshipTraining–Artisans


3 ProjectOwner/Driver SAIMIthroughtrainingproviderSkillsPriorityCC


ToenhanceartisandevelopmentintheMaritimeManufacturingsector.

Artisanswhoarecurrentlyemployedinthemarinemanufacturingsector.

Thefocusofthetrainingisonsoftskillswhichincludesmentoringandcoachingof qualified artisans and people qualified in themarinemanufacturing relatedoccupationsthathavebeenidentified.Candidates,whicharecurrentlyemployedinthemarinemanufacturingsector,willbetrainedtobecomeskilledtomentorandcoachstaff,includingartisanalcandidatesplacedforexperientiallearning.

Theshortageofsuitablyqualifiedmentorartisansinthesectorhasbeenidentifiedasachallenge.

Improvedworkplaceskillstothebenefitofjuniorartisans-skillstransfer.

5 CapitalValue[Rm] R92000-8xPElearners(32totalnationally)



8 Operation Start Date Startedandended2018

9 OperatingCostsp.a. N/A

10 OperatingJobsp.a. N/A

11 TurnoverorValue(GVA) N/A

12 EconomicLinkages -

13 ‘Lever’to‘Unlock’ None-projectcompleted

14 AnyOtherPoints -


Eastern Cape




12.7 HIGHER EDUCATION INSTITUTIONS FOR INNOVATION IN THE EASTERN CAPE

SouthAfricanhighereducationinstitutionsareclassifiedintothreemajorclustersbasedontheknowledgeproductivityorfunctionoftheuniversity(Boshoff,2010;Dubeetal.,2017).Therearecurrently23universitiesinSouthAfricawhichhavebeenclusteredinto3categories,namely;redcluster,greenclusterandbluecluster(Dubeetal.,2017;WalterSisuluUniversity,2019).Redclusteruniversitiesarethoseclassifiedasresearchintensiveuniversities,blueclusteruniversitiesarethoseclassifiedastechnicaltraininginstitutionsandgreenclusteruniversitiesfocusonbothresearchandtechnicaltraining(Dubeetal.,2017).TheEasternCapeiscurrentlyhometofouruniversities;namelyNelsonMandelaUniversity,RhodesUniversity,WalterSisuluUniversityandUniversityofFortHare.Ofthoseinstitutions,RhodesUniversityisclassifiedasaredclusterinstitution,NelsonMandelaUniversityandUniversityofFortHareareclassifiedasagreenclusterinstitutionsandWalterSisuluUniversityisclassifiedasablueclusterinstitution(McGregor,2010).Thefollowingsectionwillprovideabriefhistoricalbackgroundofeachoftheseinstitutionsandtheircurrentstatus.

1. Nelson Mandela University (NMU)

TheNelsonMandelaMetropolitanUniversitywasopenedonthe1stofJanuary2005asaresultofamergerbetweenPETechnikon,theUniversityofPortElizabethandthePortElizabethcampusofVistaUniversity(NelsonMandelaUniversity,2019).Theuniversitycurrentlyhasapproximately27000studentsandapproximately2500staffmemberswhicharebasedonsixcampusesbetweentheNelsonMandelaMetropoleandGeorge(NelsonMandelaUniversity,2019).Onthe20thofJuly2017,theinstitutionswasofficiallyrenamedastheNelsonMandelaUniversity,makingittheonlyuniversityintheworldtobenamedinhonourofNelsonRolihlahlaMandela(NelsonMandelaUniversity,2019).Theinstitutionspridesitselfinbecominganinnovative21stcenturyinstitutionofhigherlearningandseekstoreflectthisinthemannerinwhichtheyteach,learn,doresearch,engagewiththeircommunitiesandworkandliveasstudents,staffalumniandtheirpartners(NelsonMandelaUniversity,2019).

2. Rhodes University

RhodesUniversitywasfoundedin1904andisconsideredasmalluniversitywithjustover8200students(Mabizela,2019).Theuniversityconsistsof30%postgraduatestudentsandover18%internationalstudentsfrom54countriesallaroundtheworld(Mabizela,2019).Theuniversitycurrentlyaccommodatesapproximately4000studentsin52residences,andduetoitssize,isabletoprovidesmallclasseswithindividualisedattention(RhodesUniversity,2017).Themottooftheuniversityis“Whereleaderslearn”andtheinstitutionpridesitselfonproducingknowledgeableintellectuals,skilledprofessionalsandcritical,caringandcompassionatecitizens(Mabizela,2019).Furthermore,thefutureoftheinstitutionisnotcentredaroundincreasednumbers,butonincreasingacademicexcellence(RhodesUniversity,2017).

3. University of Fort Hare

InitiallynamedtheSouthAfricanNativeCollege,theUniversityofFortHarewasfoundedin1916onaformerBritishmilitarystronghold(UniversityofFortHare,2019).ThecollegewasformedasaresultofanalliancebetweenthenewclassofeducatedAfricanChristiansatthetimewhoweresupportedbytraditionalSouthernAfricanleaders,aswellasearlytwentiethcenturywhiteliberals(UniversityofFortHare,2019).Theuniversityhasproducedhighlyprominentpoliticalfigures,suchasOliverTambo,NelsonMandela,GovanMbeki,RobertSobukweandMangosuthuButheleziinSouthAfrica,RobertMugabeandHerbetChitepoinZimbabweandEliusMathuandCharlesNjonjoinKenya(UniversityofFortHare,2019).Currently,theuniversitypridesitselfonhavingexcellentoutputs,havingproduced153PhDstudentsin2018(Buhlungu,2019).Furthermore,theycurrentlyhave25ratedscholarsandcontinuedtoidentifyandgrowtheirresearchnicheareasinordertoensurethatthequalityoftheirresearchoutputisconstantlyimproving(Buhlungu,2019).



4. Walter Sisulu University

TheWalterSisuluUniversitywasestablishedonthe1stofJuly2005andnamedinhonouroftheSouthAfricanliberationstruggleicon,thelateWalterMaxUlyateSisulu(WalterSisuluUniversity,2019).WalterSisuluUniversityhasfocusedprimarilyasadevelopmentaluniversitytargetingurbanrenewalandruraldevelopment(WalterSisuluUniversity,2019).Theuniversitycurrentlyhasover30000studentsacross4campuseslocatedinMthatha,Butterworth,BuffaloCityandQueenstown(WalterSisuluUniversity,2019).WalterSisuluUniversityaimstobealeadingAfricancomprehensiveuniversitywhichfocusesprimarilyoninnovativeeducational,researchandcommunitypartnershipprogrammeswhichalignthemwithlocal,regional,national,continentalandinternationalimperatives(WalterSisuluUniversity,2019).

ReferencesBoshoff,N.,2010.Cross-Nationalhighereducationperformanceindicators:ISIpublicationoutputfiguresfor16selectedAfrican universities.Wynberg,SouthAfrica:CentreforHigherEducationTransformation(CHET).

Buhlungu,S.,2019.Vice Chancellors Message.[online]UniversityofFortHare.Availableat:<https://www.ufh.ac.za/About/Pages/ViceChancellorsMessage.aspx>[Accessed19Aug.2019].

Dube,B.,Maphosa,S.B.,Mershon,C.andMiner-Romanoff,K.,2017.Innovationinconductingwritingretreatsforacademicstaffinhighereducation.South African Journal of Higher Education,31(2),pp.4–21.

Mabizela,S.,2019.Rhodes University-Where Leaders Learn.[online]RhodesUniversity.Availableat:<https://www.ru.ac.za/introducingrhodes/>[Accessed19Aug.2019].

McGregor,K.,2010.South Africa: New university clusters emerge.[online]UniversityWorldNews.Availableat:<http://www.universityworldnews.com/article.php?story=20100523104119724>[Accessed10Sep.2018].

NelsonMandelaUniversity,2019.History.[online]NelsonMandelaUniversity.Availableat:<https://www.mandela.ac.za/About-us/Our-impact/History>[Accessed19Aug.2019].

RhodesUniversity,2017.History of Rhodes.[online]RhodesUniversity.Availableat:<https://www.ru.ac.za/introducingrhodes/historyofrhodes/>[Accessed19Aug.2019].

UniversityofFortHare,2019.History.[online]UniversityofFortHare.Availableat:<https://www.ufh.ac.za/About/Pages/History.aspx>[Accessed19Aug.2019].

WalterSisuluUniversity,2019.Walter Sisulu University - About us.[online]WalterSisuluUniversity.Availableat:<http://www.wsu.ac.za/waltersisulu/index.php/about-us/about-us-intro/>[Accessed19Aug.2019].



13 AN ECONOMIC OVERVIEW TO PROVIDE CONTEXT

13.1 AN ECONOMIC OVERVIEW OF SA, EC, SBDM, OTRDM THE NMB AND BCMM

13.1.1 Introduction

Thischapterwillprovideabriefoutlineofthesocio-economiccharacterisesofSouthAfrica,theEasternCape,SarahBaartmanDistrictMunicipality(SBDM),O.R.TamboDistrictMunicipality(ORTDM),NelsonMandelaBayMunicipality(NMBM)andBuffaloCityMetropolitanMunicipality(BCMM).Thepurposeofthisprocessistounderstandandidentifythesocialdynamicsofthepopulationandworkforceintheseareasandhowtheymaypotentiallyimpactthecompetitivenessofthesearea’seconomiesandthedemandforgoodsandservices.

The sub-section will be reviewed under the following headings:

· Population · HouseholdNumbersandSize· EducationLevels· HouseholdIncome· AccesstoBasicServices· DwellingType· EmploymentProfile· EconomicProfile

13.1.2 Population

Population is one of several variables that affect the economy and subsequently economic development. Understanding the population dynamics within an area is therefore critical when it comes to development as population changes impact:

· Thedemandforgoodsandservicessuchashousing,water,sanitationandelectricity· Theneedforcertaintypesofinfrastructure· Thesizeofthelabourforce

Table1belowshowsthetotalpopulation,populationgrowthratesbetween2013and2018,andthepercentageshareoftotal population for each of the selected areas.



Table 81: Overview of Population Structure in 2018

AREA POPULATION % SHARE1 DENSITY (PER KM2)

AVERAGE GROWTH RATE

2017-2018 2013-2018

South Africa 57725606 - 47.3 1.56% 1.61%

Eastern Cape 6522734 11.3% 38.6 0.20% 0.32%

SBDM 463931 7.1% 8.0 0.81% 0.94%

ORTDM 1387913 21.3% 114.7 0.55% 0.77%

NMBM 1220616 18.7% 623.1 1.07% 1.16%

BCMM 785775 12.0% 309.86 0.71% 0.82%

Source:Quantec(2019)

Fromthetableaboveitisevidentthatthefourmunicipalities–SarahBaartman,O.R.Tambo,NelsonMandelaBayandBuffaloCity–accountsforalmost60.0%ofthetotalpopulationoftheEasternCape.Ananalysisofthegrowthratesofthesemunicipalitiesindicatethattheirtotalpopulationincreasedyear-on-year,ataslowerratethanthelong-termaverages.Ofthesethreemunicipalities,theNMBMastheeconomiccentreoftheEasternCape,exhibitedthefastestyear-on-year(1.07%)andlong-term(1.16%)populationgrowthrates.

Areviewofthetimeseriesdatasuggeststhat,althoughthepopulationoftheEasternCapehasincreased,theaveragerateofthisincreasebetween2015and2018(0.17%)waslowerthanbetween2011and2014(0.19%).

ThiscoupledwiththefactthattheaveragepopulationgrowthratesfortheEasternCapeoverboththeshort-andlong-term,werelowerthanthatofSouthAfricaasawholesuggeststhattheprovinceischaracterisedbyoutwardmigrationtoareasofgreatereconomicopportunities.

13.1.3 Household Number and Size

Thehouseholdgrowthrateaswellasthenumberofhouseholdswithinanareaserveasametricbywhichtoassesstheimpactandmagnitudeofanyinterventionsinanarea.Householdsalsohaveadirectbearingontheproductionoftheeconomyastheirdisposableincomehelpstodeterminethelevelofconsumptionofgoodsandservices.Thetablebelowillustratesthetotalnumberofhouseholds,growthrateandaveragehouseholdsizefortheselectedareasin2018.

1 Oflargerareai.e.EasternCape’sshareoftheSouthAfricanpopulation;SBDM,ORTDM,NMBM.BCMM’sshareoftheEasternCapepopulation.



Table 82: Overview of Household’s Structure in 2018

AREA HOUSEHOLDS AVERAGE HOUSE-HOLD SIZE

DENSITY (PER KM2)

AVERAGE GROWTH RATE

2017-2018 2013-2018

South Africa 16092377 3.6 13.2 1.86% 1.95%

Eastern Cape 1662642 3.9 9.8 0.49% 0.63%

SBDM 128276 3.6 2.2 1.04% 1.20%

ORTDM 301166 4.6 24.9 0.72% 0.97%

NMBM 341868 3.6 174.5 1.35% 1.47%

BCMM 230247 3.4 90.8 0.99% 1.14%


Thehouseholdgrowthratesshowasimilartrendtothatofpopulation,withapositivegrowthratebeingexhibitedsince2013.ThehouseholdgrowthrateintheEasternCapebetween2013and2018waslowerthanboththenationalaverageaswellasthatofthefourlocalmunicipalities.ThismaysuggestapotentialincreaseinthedemandforgoodsandservicesbyhouseholdsinSBDM,ORTDM,NMBMandBCMM.

Thenumberofhouseholdsinanareaisinfluencedbyanumberofdifferentfactorsincludingculture,traditions,educationlevelsandincome.Acrossallfourmunicipalities,however,theabsolutenumberofhouseholdshasincreasedsince2013.

13.1.4 Education Levels

Thelevelofeducationprovisionwithinanareaisoneofthemaindeterminantswhenitcomestoalocationsabilitytoachievelong-term,positiveeconomicgrowth.Theprovisionofeducationalonehowever,doesnotensurethatthisgrowthwilloccur.Equallyimportantisensuringthatthiseducationprovisionisofasufficientqualitytomeetboththecommunitiesandthebroadereconomy’sneeds.

Economicresearchalsoshowsthatthereisapositiverelationshipbetweeneducationalattainmentandindividualincome,thatishighereducationallevelstendtoresultinhigherindividualincomes.Higherincomesinturndrivegreaterconsumptionspendingwhichhasapositiveimpactonanareasoveralleconomicgrowth.Increasedaccesstoeducationalsoimprovestheabilityoflow-incomeearnerstoaccesseconomicopportunitiesandtherebyparticipateinthebroadereconomy.

Based on these factors, the level of education within an area determines and enables:

· Individualincomes· Labourproductivity· Skillsbaseandemployability



The table below illustrates the educational attainment for the selected areas.

Table 83:Level of Education Attainment in Selected Areas in 2018

SOUTH AFRICA

EASTERN CAPE SBDM ORTDM NMBM BCMM

Noschooling 13.9% 12.6% 10.4% 16.5% 6.9% 8.6%

SomePrimary 0.3% 29.9% 28.4% 34.8% 19.0% 21.7%

CompletedPrimary 6.9% 6.5% 7.7% 6.3% 5.3% 5.9%

SomeSecondary 40.3% 31.4% 32.3% 28.6% 36.2% 33.8%

Matric 27.0% 13.6% 15.1% 9.7% 23.0% 19.7%

Tertiary 11.7% 5.9% 6.1% 4.1% 9.6% 10.3%


Itisevidentfromthetableabovethattheskilllevelofthepopulation,asmeasuredbyeducationalattainment,isnotablypoorerintheEasternCapethanintherestofSouthAfrica.Therehashowever,beenamarginalimprovementineducationalattainmentsince2013whenonly5.4%ofEasternCape’spopulationhadattainedsomeformoftertiaryqualification.

UnliketherestoftheEasternCape,theSarahBaartman,NelsonMandelaBayandBuffaloCityMunicipalitieswerecharacterisedbyhighlevelsofeducationalattainment,withalmost7.0%ofthepopulationintheseareashavingattaintedsomeformoftertiaryqualificationin2018.ThisiswellabovetheEasternCapefigureandislikelyattributabletothepresenceofuniversitiesinNMBMandBCMM,andtheproximityoftheSBDMtouniversitiesintheNMBM.Despitethis,overtwothirdsofthepopulationofthefourmunicipalitieshasnotcompletedhighschool,slightlyhigherthanthenational(61.3%)figure.ThissituationismostsevereinORTDM,where86.2%ofthepopulationhasnotcompletedhighschool.Theselevelsofeducationalattainmentsuggesttheneedforinterventionsthattargetedlowandsemi-skilledindividuals.

13.1.5 Household Income and Expenditure

Asincomeisthemeansbywhichpeopleareabletomeettheirbasicneeds.Itisthereforeimportanttounderstandtheincometrendswithinanarea.Furthermore,increasesinincomehaveapositiveimpactonthestandardoflivingofindividuals,householdsandcommunitiesinanarea.Thereisalsoadirectlinkbetweenhouseholdincomeandeconomicgrowth,ashigherincomesleadtogreaterdemandforgoodsandservices(i.e.increasedhouseholdexpenditure),resultinginincreasedproductionandsubsequentlyachangeinthesizeoftheeconomy.Increasesindisposableincomecoupledwithalowinterestrateenvironmentstimulatesanincreaseintheconsumptionexpenditureofhouseholds,particularlyondurableandsemi-durablegoods(e.g.transportequipmentandrelatedtransportexpenditure).Thisinturnhasapositiveimpactontheeconomyofthecountry.



Toanalysetheaverageamountofincomeavailabletopeople,theweightedaveragehouseholdincomeforeachoftheselectedareaswascalculated(seeTablebelow).

This average annual weighted household income is defined as the combined income of all members of a household, the determination of which includes:

· Labourremuneration,· Incomefromproperty,and· Transfersfromgovernment(includingpensions).

Table 84: Weighted Average Annual Household Income in 2018 Prices

2001 2011

South Africa R127813 R160141

Eastern Cape R78840 R100607

SBDM R107006 R119415

ORTDM R54822 R69317

NMBM R144620 R162429

BCMM R107669 R151194

Source:CalculationsbasedonCensus2001andCensus2011(2019)

Thetableaboveshowstheaverageannualhouseholdincomeforeachrespectiveareainboth2001and2011,adjustedto2018prices.TheNelsonMandelaBayMunicipalityhasahigheraveragehouseholdincomethanboththeprovincialandnationalvalues,withthemunicipality’saveragehouseholdincomeexceedingtheprovincialfigureby61.4%.Thisislikelyattributabletothegreaterconcentrationofeconomicactivityinthemunicipalityrelativetotherestoftheprovince.ThisisfollowedbyBCMM,whoseaveragehouseholdincomewas50.3%higherthantheprovincialfigure,butlowerthanthenationalaverage.

TheO.R.TamboDistrictMunicipality’shouseholdincomeincontrast,iswellbelowtheEasternCapeandSouthAfricanvalues.Thissuggeststhattherearefewereconomicopportunitiesavailableinthearearelativetootherpartsoftheprovince.

Positively,inabsoluteterms,theEasternCape’saverageannualweightedhouseholdincomehasincreasedby27.6%since2001comparedto25.3%fortherestofSouthAfrica.Thisislikelyaproductofincreasedinterventionsbygovernmentintheareathatfocusonimprovinghousehold’seconomicwellbeing.

Inadditiontotheweightedhouseholdincome,itisalsobeneficialtoconsiderthehouseholdincomedistributionwithinthe Eastern Cape relative to the rest of South Africa.



Figure 25: Annual Household Income Distribution in SA and EC, 2011

Source:CalculationsbasedonCensus2011(2019)

showsthatapproximately74.0%ofhouseholdsintheEasternCapeearnedlessthanR38,400perannum(R3,200permonth)in2011,relativeto62.8%ofhouseholdsintherestofSouthAfrica.Thesehouseholdsareclassifiedasindigent(i.e.unabletoaccessbasicservices)andinneedofsomeformofstatesupport.ThefactthatovertwothirdsofthehouseholdsintheEasternCapewereearningbelowR3,200permonthsuggestsaveryhighrateofpovertyandasignificantdemandforadditionalincomesourcesintheprovince.

ThelargeproportionofpeoplethatreceiveverylittleornoincomeisanindicationoftheneedtoincreasethedegreeofeconomicactivitywithintheEasternCape.Thisincreaseineconomicactivitywillinturnhaveapositiveimpactonjobcreation.Higheremploymentlevelswithinthestudyareaswillalsopositivelyimpactworkerincomes,andimprovelivingstandards.



13.1.6 Access to Basic Services

Nationallegislationaswellasamunicipality’sbasicservicespolicyrecognisestheneedtoprioritiseaccesstobasicservices(water,sanitation,refuseremoval andelectricity)toallresidentsofanarea,butparticularlythepoorandindigenthouseholds.Theintentionofthislegislationandpoliciesaretoensurethathouseholdsenjoyadecentstandardoflivinginlinewiththerequirementsofnationallegislation.

Table 85: Access to Minimum Basic Services in 2018

AREA TOTAL NUMBER OF HOUSEHOLDS

PERCENTAGE OF HOUSEHOLDS IN 2018 WITH ACCESS TO:

WATER1 ELECTRICITY2 SANITATION3 REFUSE REMOV-AL4

South Africa

16092377 85.9% 85.3% 61.9% 65.4%

Eastern Cape

1662642 68.7% 75.6% 44.5% 44.9%

SBDM 128276 93.8% 87.4% 74.2% 80.5%

ORTDM 301166 37.3% 70.4% 11.8% 11.7%

NMBM 341868 96.5% 90.8% 89.7% 91.7%

BCMM 230247 89.8% 81.2% 71.5% 71.4%


In2018,68.7%ofhouseholdsintheEasternCapehadaccesstopipedwater,wellbelowthenationalaverageof85.2%.ThiswashigherinNMBM,SBDMandBCMMbutlowerinORTDM.Accordingly,over340000householdsintheEasternCapeweredependentoneitherboreholesornaturalsources,suchasdams,riversandstreams.AccesstopipedwaterwasparticularlypoorinORTDMduetoitsruralcharacter.Theresultwasthat49.3%ofhouseholdsweredependentoneitherboreholesornaturalwatersources–oneofthehighestlevelsintheprovince.Onaverage93.4%ofhouseholdsacrossNMBM,SBDMandBCMMhadaccesstopipedwaterin2018.ThehighlevelofaccesscanbeattributedtotheadditionalresourcesavailablewithinNMBMandBCMMaswelltheemphasisthatthesemunicipalgovernmentshasplacedonexpandingaccessinlowincomeareas.ThelowpopulationdensityintheSBDM,incontrast,likelycontributeditshighlevelofaccess.Ithowevershouldbenotedthatthesefiguresdonotspeaktothequalityandreliabilityofthisaccess.ElectricityisthemostpopularenergysourceamongstEasternCapehouseholds,with75.6%oftheprovince’shouseholdsmakinguseofthistypeofenergyforlightingin2018.ElectricityaccessisexceptionallyhighacrossNMBM,SBDMandBCMMbutparticularlyinNMBM.Thiswasevidentbythefactthatmost(90.8%)householdsinthismunicipalityuseelectricityastheirprimarymeansoflighting.Thislevelofaccessishigherthanboththeprovincialandnationalfigures.TheEasternCapehashowever,onlyincreasedaccesstoelectricityatanaverageannualrateof1.9%between2013and2018comparedtoarate2.6%fortherestofSouthAfrica.

1 Thisincludesallhouseholdsthathavepipedwaterinsidetheirdwelling,withintheiryard,orlessthan200metresfromtheirdwelling.2 Accesstoelectricityismeasuredbythenumberofhouseholdsthatuseelectricityastheirmainsourceoflighting.3 InlinewiththeDepartmentofWaterAffairsWaterServicesReferenceFramework,adequatesanitationisdefinedasaccesstoawaterborneflushtoilet,atoiletthatutilisesaseptic/conservancytankandchemicaltoilets(i.e.non-waterborneVIPs).4Accesstorefuseremovalismeasuredbyhousehold’sabilitytoaccessrefusecollectionservicesfromalocalauthorityinlinewiththeNationalWasteMan-agementStrategy.



Flushandchemicaltoiletsarethemostwidelyusedsanitationtypeinmostareas,withthemajorityofhouseholdsinNMBM(89.7%),SBDM(74.2%)andBCMM(71.5%)havingaccesstothisminimumnationalsanitationstandardin2018.Overthelastfiveyears,theEasternCapehasmadepositivestridesinimprovingaccesstosanitationacrosstheprovince.Between2013and2018,thenumberofhouseholdsthateitherhadnoaccesstosanitationorweredependantonbucketlatrinesdecreasedatanaverageannualrateof1.5%and4.5%respectively.

Approximately44.9%ofhouseholdsintheEasternCapehaveperiodicrefuseremovalservicesprovidedbyamunicipalauthorityin2018.ThiswasnotablyhigherintheNMBM(91.7%),SBDM(80.5%)andBCMM(71.4%)thanintheORTDM(11.7%).Accordingly, 856536households(51.5%)intheEasternCapehadeithernorefuseremovalservices(181 916households;10.9%)orweredependantontheirownrefusedump(674620households;40.6%).Despitethislowlevelofaccess,thenumberofhouseholdsinEasternCapewithnorefuseremovalservicesfellby1.4%year-on-yearbetween2013and2018.

13.1.7 Dwelling Type

TheSouthAfricanConstitutionstatesthateverycitizenhastherighttoaccessadequatehousing.TheConstitutionfurtherplacesanobligationonthestatetopromulgatelegislationtorealisethisright.Itfurtherstatesthatthisrightshouldbeprogressivelyrealised,inthatitshouldbeachievedgiventheavailableresources.DespitethisobligationmanySouthAfricansstilllackaccesstoadequatehousing.

Table 86: Access to Housing by Dwelling Type in 2018

AREA FORMAL

INFORMALPERCENTAGE ACCESS TO

FORMAL HOUSINGSHACK IN BACKYARD

SHACK, NOT IN BACKYARD5

TRADITION-AL

South Africa 12589578 800267 1395170 1 165 262 78.9%

Eastern Cape 1062698 34067 95703 455504 64.5%

SBDM 110275 5035 8935 2719 86.9%

ORTDM 131 233 1799 2570 163049 43.9%

NMBM 299251 9088 30619 1180 88.0%

BCMM 167709 11063 39417 10405 73.4%


ThetotalnumberofdwellingsintheEasternCapeincreasedbyanestimated54,087between2013and2018.Overthisperiodthenumberofformalstructuresincreasedby79,503,whilethenumberofinformalandtraditionalstructuresdeclinedby25,416.Thisisequivalenttoanaverageannualgrowthrateof1.6%forformaldwellingsand-0.8%forinformalandtraditionaldwellings.Incontrast,thenumberofformaldwellingsinthefourmunicipalitiesincreasedfrom640,343in2013to708,467in2018,whileinformalandtraditionaldwellingsdecreasedfrom293,715to285,878overthesameperiod.Thecorrespondinggrowthrateswere2.0%and-0.5%respectively.

5 Forexample,ashacksituatedinaninformal/squattersettlementoronafarm.



Whenconsideringthepercentagechangesbetween2013and2018,theproportionofhouseholdsinEasternCapewithaccesstoformaldwellingsincreasedfrom61.7%to64.5%andtheproportionofpeopleininformaldwellingsdecreasedfrom8.6%to7.9%.Theproportionofpeoplelivingintraditionalhouseholdslikewisedeclinedfrom29.7%to27.6%.Whilethepercentageofhouseholdswithaccesstoformalhousingincreasingmarginallybetween2013and2018,asignificantneedstillexists.

13.1.8 Employment

ThecompositionofthelocallabourforceispresentedforSouthAfrica,theEasternCapeaswellasfortheSarahBaartmanDistrictMunicipality,O.R.TamboDistrictMunicipality,NelsonMandelaBayMunicipalityandBuffaloCityMetropolitanMunicipality.Thisinformationillustratesthedemandforemploymentwithintheserespectiveareas.Italsoindicateswhetherthecurrentsupplyofjobseekersissufficienttomeettheneedsoffutureinvestments.

The table below provides the labour force profile of South Africa, the Eastern Cape, SBDM, ORTDM, NMBM, and BCMM. For the purposes of Table 7, the following indicators are considered:

· WorkingAgePopulation:Includesallindividualsbetweentheagesof15and65.· Employed:Peoplewhowithinthelastsevendaysperformedworkforpay.· Unemployed:Thosepeoplewithintheeconomicallyactivepopulationwho:didnotworkduringthesevendayspriorto

theinterviews;wanttoworkandareavailabletostartworkwithintwoweeksoftheinterview;andhavetakenactivestepstolookforworkortostartsomeformofself-employmentinthefourweekspriortotheinterview.

· Non-EconomicallyActiveanddiscouragedworkseekers:Apersonwhoisnotworking,notactivelyseekingworkandnotavailableforwork.

· LabourForceParticipationRate:Theproportionoftheworking-agepopulationthatbelongstothelabourforce(iseitheremployedorunemployed).

· LabourForce:Includesthoseintheworkingagepopulationwhoareeitheremployedorunemployed.· UnemploymentRate:Theproportionofthelabourforcethatisunemployed.

Table 87: Labour Force Profile for Selected Areas in 2018

SOUTH AFRICA

EASTERN CAPE SBDM KSD NMBM BCMM

WorkingAgePopulation

37410897 3866839 305398 747310 813281 526954

Employed 16242230 1240947 156102 142306 365756 214704

Unemployed 6516939 659732 40288 113669 171102 111 161

NotEconomicallyActive

14651728 1966161 109008 491334 276423 201705

LabourForceParticipation Rate

60.8% 49.2% 64.3% 34.3% 66.0% 61.8%

LabourForce 22759169 1900679 196390 255975 536859 325865

UnemploymentRate 28.6% 34.7% 20.5% 44.4% 31.9% 34.1%




ThedatapresentedinTable7aboveindicatesthatoverathird(34.7%)ofthelabourforceintheEasternCapewasunemployed,whichwassignificantlyhigherthantheSouthAfrican(28.6%)figure.TheunemploymentrateintheNMBMandBCMM,whilelowerthantheprovincialaverage(34.7%)ishigherthanthenationalfigureof28.6%.ThisfigureimpliesahighdemandforemploymentopportunitiesacrossallNMBM,BCMMandORTDMbutmorespecificallyinthelatter,wheretheunemploymentrateexceedstheprovincialandnationalaveragesbyover10.0%.TheSBDM,unemploymentrate,incontrast,isover10.0%lowerthantheprovincialaverage.

Inadditiontoexhibitingahighlevelofunemployment,theEasternCape’sunemploymentratehasincreased,althoughmarginally,from2013,when33.2%ofthelabourforcewasclassifiedasunemployed.Incomparison,theoverallSouthAfricanunemploymentratesincreasedby3.9%andoverthesameperiod.

The high unemployment rate in the Eastern Cape as well as in three of the four focus municipalities is indicative of a high proportion of discouraged workers rather than strong employment creation. Worker discouragement can result from one of the following factors:

· Poorskilllevelsandskillsmismatch· Largepercentageofthepopulationthatisclassifiedasnewentrantsintothelabourmarket(giventheyouthful

demographicprofileoftheEasternCapewhere32.9%ofthepopulationarebetweentheagesof15and35yearsold)· Barrierstoentryintothejobmarket(technical,geographicalandfinancial)· ComparablelowwagesintheEasternCapeincomparisontothewagescommandedinotherpartsoftheSouthAfrica

suchasintheWesternCapeandGauteng.

WhileemploymentstatisticsarepoorforintheEasternCapeaswellasinNMBMandBCMM,ofconcernisORTDM,whereitisevidentthatthereisinadequateeconomicactivityforthecreationofasufficientnumberofjobsforthepopulation.

13.1.9 Economic Profile

Thefollowingsub-sectionexploresthegeneraleconomicconditionsintheSarahBaartman,O.R.Tambo,NelsonMandelaBayandBuffaloCityMetropolitanMunicipalitiesinthecontextoftheEasternCapeandSouthAfrica.Theintentionofthisassessmentistoprovideahigh-leveleconomicoverviewofbotheconomiestocontextualisethepotentialimpactofanyfuturedevelopmentintheselectedareas.Thepresentstateofthevariouseconomicsectorsthatcomprisetherelevanteconomieswillalsobediscussed.Theintentionofthisprocessistounderstandthedominantfeaturesbywhichtheseareas are characterised.

13.1.9.1 Economic Growth

Economicgrowthreferstotheincreaseinthemarketvalueofgoodsandservicesproducedbyaparticulareconomyovertime.Thiseconomicgrowthismeasuredasthepercentageincreaseintherealgrossdomesticproduct,orrealGDP.AnincreaseintheGDPgrowthisdrivenbyarangeoffactorssomeofwhichincludetechnologychange,moreefficientuseofinputs,growthinthecapitalstock,andimprovementsinthequalityandlevelofeducationoftheworkforce.Theincreasedfocusonsustainabledevelopmentinrecentyearshasalsoledtotheinclusionofaspectssuchastheuseofenvironmentallysoundprocessesintotheeconomicgrowthmodel.Table8illustratestherealGDPvalue(inmillionsofRand)forthevariousareas.



Table 88: Gross Value Added (GVA) and Real GDP (2010 Prices) in 2018

AREA

GVA (R, MILLIONS) REAL GDP (R, MILLIONS)

2018AVERAGE ANNUAL

GROWTH RATE (2013 – 2018)

2018AVERAGE ANNUAL

GROWTH RATE (2013 – 2018)

South Africa R2859600 1.2% R2923514 1.2%

Eastern Cape R214384 0.9% R219422 1.0%

SBDM R19130 1.1% R19595 1.2%

KSD R21 611 1.4% R22114 1.5%

NMBM R82812 0.6% R84815 0.7%

BCMM R41681 0.3% R42685 0.4%

Source:CalculationsbasedonQuantec(2019)

TheEasternCape’srealGDPwasapproximatelyR219.4billionin2018,a1.0%increasefromthe2017figure.Althoughtheprovincialeconomygrewinrealterms,theEasternCape’soverallshareofnationalGDPdeclinedby0.1%to7.5%between2013and2018.Overthe2013to2018periodtheEasternCapeeconomyunderperformedthenationalgrowthrate,growingbyonly1.0%comparedtoanationalgrowthrateof1.2%overthesameperiod.

Thefourmunicipalitiesaccountedforapproximately77.1%ofthetotalGDPoftheEasternCapein2018equivalenttoR169.2billion(real2010prices).TheNelsonMandelaBayMunicipalitywastheprimarydriveroftheprovincialeconomy,contributingR84.8billiontoprovince’stotalGDPin2018.Thisrepresents38.7%oftheEasternCape’stotalGDP.Despitethis,theEasternCape’sGDPgrowthrateunderperformedboththeEasternCapeandSouthAfrica,growingat0.7%year-on-yearbetween2013and2018comparedto1.0%and1.2%fortheEasternCapeandSouthAfricarespectively.

From2010,thesixareashavegenerallyshownasimilarGDPgrowthpattern.Althoughsimilartotheotherareastrends,ORTDM’sGDPgrowthratehasbeennotablyhigherthantheotherareas.From2013to2018,ORTDM’sGDPhasgenerallyexhibitedhighergrowththantheprovincialandnationalGDP,suggestingthatthemunicipalityhasbeenmoreinsulatedfromtheglobaleconomicslowdownthantheotherareas.Since2016theGDPoftheEasternCape,SBDM,ORTDM,NMBMandBCMMhasrecoveredsomewhat,althoughthegrowthratesarestillwellbelowthoserecordedbetweenpre-2008.EconomicgrowthintheEasternCapehasgenerallyunderperformedrelativetotherestofSouthAfricathroughouttheperiod,despitestronggrowthbyseveralofitsmunicipalities.Thissuggeststheneedforongoinginvestmenttoensurethatthelocaleconomycontinuestogrow.



Figure 26: GDP Growth Rate Per Selected Areas


TherecoveryintheGDPoftheEasternCapeinrecentyearsisanencouragingsign,asagrowingGDPgrowthrateindi-catesthattheeconomyhasthepotentialtosustainfurtherinvestment.TheEasternCapeshouldthereforecontinueitsinvestmentattractionandfacilitationactivitiesasthesearelikelytofurtherimprovetheeconomicgrowthprospectsofthe area.

13.1.9.2 EconomicStructure

Inordertoidentifyanareasstrengthsandweaknessesitisnecessarytounderstandtheeconomicstructureoftheecon-omy.Thisknowledgeassistsinvestorsinmakinginformeddecisionsaboutwhichsectorstoinvestinaswellasempower-ingpolicymakersindecidingonwhichsectorsarebesttotargetforinterventions.Knowledgeoftheeconomicstructureoftheeconomycanalsoassistindeterminingtheeconomicimpactresultingfrominvestmentsandexpenditureinspecif-icsectors.ThefigurebelowillustratesthecontributionofeacheconomicsectorintheEasternCape’seconomy,whilethetablebelowillustratestheeconomicstructureofeachoftherespectiveareas.



Figure 27: Eastern Cape’s GVA Sectoral Contribution (R, Millions) 2018

Source:CalculationsbasedonQuantec2011(2019)



Table 89: Percentage Share of Total GVA per Economic Sector in 2018

SOUTH AFRICA


PRIMARY 10.7% 1.9% 6.5% 1.9% 0.5% 1.1%

Agriculture 2.6% 1.6% 6.4% 1.0% 0.5% 1.0%

Mining 8.1% 0.3% 0.1% 0.9% 0.1% 0.1%

SECONDARY 19.6% 18.6% 20.1% 8.9% 25.1% 19.1%

Manufacturing 13.5% 13.6% 13.9% 3.8% 21.0% 13.5%

ElectricityandWater 2.3% 1.2% 1.5% 1.5% 0.8% 1.4%

Construction 3.8% 3.8% 4.7% 3.5% 3.3% 4.2%

TERTIARY 69.7% 79.5% 73.5% 89.2% 74.3% 79.8%

Trade 15.1% 19.5% 21.2% 18.6% 19.0% 22.0%

Transport&Communication 9.6% 8.9% 7.7% 7.0% 11.6% 8.2%

FinanceandBusinessServices 22.4% 20.6% 20.1% 17.9% 23.3% 22.3%

GeneralGovernment 16.7% 22.9% 17.5% 35.7% 15.2% 19.4%

CommunityServices 6.0% 7.5% 7.0% 10.2% 5.1% 7.9%


Thetableaboveclearlyillustratesthatthemajorityofeconomicactivityacrossallsixareasoccursinthetertiarysectors.Onaveragemorethan70.0%ofthetotalGVAofeachstudyareaisderivedfromtertiaryactivities,withafurther18.0%ofGVAderivedfromsecondaryactivities.TheimportanceofthemanufacturingsectorintheEasternCapeisclearlyhighlightedinthetableabove.Thedominantmanufacturingsub-sectorintheEasternCape,butparticularlyinNMBMandBCMM,istransportequipment(i.e.themanufactureofmotorvehiclesandautomotivecomponents).Thissub-sectoraccountsfor21.1%,27.9%,and13.6%oftheEasternCape’s,NMBMandBCMM’stotalmanufacturingGVAin2018respectively.

WhilesomeeconomicsectorsmayhavehighGVAcontributionstheymayhavelowemploymentmultipliers(i.e.onlyemployafewpeople)andvisa-versa.Thus,whenunpackingtheeconomicstructureofanareaitisimportanttoalsoconsiderthesectoralemploymentcomposition.Table10illustratesthecompositionofformalemploymentforeachoftherespectiveareasbyeconomicsector.



Table 90: Percentage Share of Total Formal Employment per Economic Sector in 2018

SOUTH AFRICA


PRIMARY 10.6% 8.3% 27.2% 5.1% 2.5% 4.6%

Agriculture 6.9% 8.1% 27.1% 4.5% 2.4% 4.5%

Mining 3.7% 0.2% 0.0% 0.6% 0.0% 0.1%

SECONDARY 15.6% 13.8% 11.9% 7.3% 21.4% 14.4%

Manufacturing 9.9% 8.7% 6.7% 2.5% 16.6% 8.8%

ElectricityandWater 0.5% 0.4% 0.4% 0.5% 0.3% 0.4%

Construction 5.2% 4.8% 4.8% 4.3% 4.5% 5.1%

TERTIARY 73.7% 77.9% 60.9% 87.7% 76.1% 81.0%

Trade 18.1% 18.2% 15.7% 16.7% 21.4% 20.5%

Transport&Communication 3.9% 3.0% 2.3% 2.5% 4.5% 2.9%

FinanceandBusinessServices 19.0% 13.4% 10.0% 12.2% 17.4% 15.6%

GeneralGovernment 16.0% 23.0% 15.3% 31.8% 17.3% 22.0%

CommunityServices 16.7% 20.2% 17.7% 24.5% 15.6% 20.1%


Asevidentfromthetableabove,theemploymentstructureoftherespectiveareasfollowsasimilarpatterntothatoftheirGVAcontribution.Therearehowever,somenotableexceptions.Forexample,whilethemanufacturingsectoraccountsforapproximately13.6%oftheGVAofEasternCape,only8.7%oftheformallyemployedlabourforceintheprovinceworksinthissector.Incontrast,theconstructionsectorintheEasternCapeandthefourmunicipalitiesonlycontributes+/-3%oftheGVAoftheseareasbutaccountsforbetween4.8%and5.1%ofallformalemployment.Thissuggeststhatinvestmentsintheconstructionsector,whilehavingalimitedimpactoftheGVAofanarea,willhaveasignificantlyimpactonemploymentcreation.

Thetablealsohighlightstheimportanceofthecommunityservicessector,andtoalesserextentthegeneralgovernmentsectortoemploymentintheEasternCapeandparticularlyORTDM.Thecommunityservicessector,whichincludesthoseindividualsemployedinthehealthcareandeducationsub-sectors,isaparticularlyimportantemployerinORTDM.Thissectoraccountsfor24.5%ofallformalemployment,makingitthelargestemployerinthemunicipality.



13.1.10 Synthesis

Thesocio-economicprofileindicatesthattheEasternCape,andtoagreaterextentthefourmunicipalities,faceanumberofseriouschallenges.Educationlevelsand,asaconsequence,skilllevelsinEasternCapeisparticularlypoor,negativelyimpactingonthetypeofindustriesandsectorswhichcanbedevelopedintheprovince.Furthermore,moderatelevelsofhouseholdincomeandhighunemploymentmeansthatitislikelythatthenextgenerationofworkersintheEasternCapewillbelargelyunskilled.

Combiningthiswiththefactthatanotablepercentage(34.3%)oftheEasternCape’spopulationisundertheageof14andwillbeenteringthelabourmarketinthenext10years,itisunlikelythatexistingindustriesintheareawillbeabletoabsorbtheseworkersandremainprofitableshouldthestatusquoremain.

Tohaveasignificantandsustainableimpactonthesocio-economiccharacteristicsoftheEasternCape,industrieswhicharelabourintensive,andthatrequireunskilledworkersshouldbeprioritised.Additionally,skilledlabourfromoutsidetheareawouldinitiallyhavetobebroughtintotheareaduetotheexistinglowskillslevels.

TheeconomiesoftheEasternCapeaswellasSBDM,ORTDM,NMBMandBCMMaredominatedbythemanufacturingandcommunityservicessectorsintermsofbotheconomicoutputandemployment.Otherimportantsectorsarethetradeandgeneralgovernmentsectors,withthesesectorsaccountingfor+/-41%oftheEasternCape’stotalGVAandformalemploymentrespectively.Theconstructionsector,whilecontributingapproximately3.8%oftotalGVAintheEasternCapeisanimportantemployer.ThissuggeststhatanyconstructionrelateddevelopmentsintherespectiveareasislikelytohaveastrongpositiveimpactontheunemploymentsituationthatcharacterisetheEasternCape.

ThestrongbutlowrealGDPgrowthratesoftheEasternCapebetween2013and2018relativetotherestofSouthAfricasuggestsaneedforfurtherinterventionsintheprovince.HighereconomicgrowthintheEasternCapewillsubsequentlyhaveapositiveimpactonhouseholdincome,economicwell-being,povertyandunemployment.



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ness

ser

vices

19.9

19

.9

19.6

19

.6

19.7

19

.9

20.1

20

.2

20.4

20

.5

20.6

G

ener

al g

over

nmen

t 22

.6

23.2

23

.3

23.3

22

.9

22.7

22

.8

22.9

23

.0

22.9

22

.9

Com

mun

ity, s

ocia

l and

per

sona

l ser

vices

7.

7

7.7

7.

5

7.5

7.

5

7.5

7.

5

7.5

7.

5

7.5

7.

5

Sour

ce: Q

uant

ec D

ata,

as

at A

pril

2019

Regi

onal

Out

put a

nd G

VA a

t bas

ic p

rices

by

indu

stry

13.2

RE

GIO

NA

L O

UT

PU

T A

ND

GV

A (C

ON

STA

NT

20

10 P

RIC

ES

) P

ER

IND

US

TR

Y –

SA

& E

C



Real

Gro

ss va

lue

adde

d at

bas

ic p

rices

, R m

illion

s co

nsta

nt 2

010

pric

es20

13-2

018

Sout

h Af

rica

GVA

in R

mill

ions

, Con

stan

t 201

0 Pr

ices

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

%%

∆ p

.a.

Sout

h Af

rica

Tota

l - M

anuf

actu

ring

Sect

ors

378,

963

33

8,69

1

358,

698

36

9,58

1

377,

330

38

1,17

3

382,

498

38

0,78

0

383,

902

38

3,18

8

386,

883

10

0.0%

0.30

%Fo

od, b

ever

ages

and

toba

cco

prod

ucts

77,6

47

73

,838

79,3

64

77

,291

78,0

80

77

,176

79,1

98

80

,875

80,0

99

81

,658

85,9

30

22

.2%

2.27

%Te

xtile

s, c

loth

ing

and

leat

her g

oods

11,1

51

11

,273

11,9

07

11

,559

11,5

44

12

,067

12,0

76

11

,877

11,7

30

11

,193

11,0

54

2.

9%-1

.68%

Woo

d an

d pa

per;

publ

ishi

ng a

nd p

rintin

g 32

,014

28,3

76

31

,097

31,6

46

32

,182

32,4

03

32

,682

32,4

00

33

,350

32,3

26

30

,996

8.0%

-0.8

7%Fu

el, p

etro

leum

, che

mic

al a

nd ru

bber

pro

duct

s82

,824

78,5

84

81

,478

87,8

89

92

,536

93,9

16

94

,423

93,8

53

97

,838

94,4

29

91

,614

23.7

%-0

.49%

Oth

er n

on-m

etal

min

eral

pro

duct

s 19

,529

14,9

02

16

,635

17,4

81

17

,398

17,6

05

16

,720

16,4

41

16

,197

15,8

75

16

,467

4.3%

-1.2

9%M

etal

pro

duct

s, m

achi

nery

and

hou

seho

ld a

pplia

nces

84,4

03

66

,710

69,5

68

72

,590

72,2

66

74

,330

72,7

28

69

,209

68,7

17

71

,556

74,4

60

19

.2%

0.03

%El

ectri

cal m

achi

nery

and

app

arat

us8,

570

8,20

9

8,

486

8,67

0

8,

930

9,55

7

9,

371

10,0

23

9,

975

9,07

7

8,

992

2.3%

-1.1

8%Ra

dio,

TV,

inst

rum

ents

, wat

ches

and

clo

cks

4,85

6

4,

621

4,82

0

5,

318

5,53

8

5,

644

6,21

4

5,

991

6,47

7

6,

359

5,90

2

1.

5%0.

92%

Tran

spor

t equ

ipm

ent

28,7

92

25

,786

27,7

01

29

,553

30,3

23

29

,983

30,4

99

32

,197

31,9

59

31

,773

30,7

80

8.

0%0.

53%

Furn

iture

and

oth

er it

ems

NEC

and

recy

clin

g29

,178

26,3

92

27

,642

27,5

85

28

,533

28,4

93

28

,585

27,9

14

27

,560

28,9

43

30

,687

7.9%

1.54

%So

uth

Afric

aCo

ntrib

utio

n by

sec

tor -

Per

cent

age

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Food

, bev

erag

es a

nd to

bacc

o pr

oduc

ts20

.5

21.8

22

.1

20.9

20

.7

20.2

20

.7

21.2

20

.9

21.3

22

.2

Text

iles,

clo

thin

g an

d le

athe

r goo

ds2.

9

3.3

3.

3

3.1

3.

1

3.2

3.

2

3.1

3.

1

2.9

2.

9

Woo

d an

d pa

per;

publ

ishi

ng a

nd p

rintin

g 8.

4

8.4

8.

7

8.6

8.

5

8.5

8.

5

8.5

8.

7

8.4

8.

0

Fuel

, pet

role

um, c

hem

ical

and

rubb

er p

rodu

cts

21.9

23

.2

22.7

23

.8

24.5

24

.6

24.7

24

.6

25.5

24

.6

23.7

O

ther

non

-met

al m

iner

al p

rodu

cts

5.2

4.

4

4.6

4.

7

4.6

4.

6

4.4

4.

3

4.2

4.

1

4.3

M

etal

pro

duct

s, m

achi

nery

and

hou

seho

ld a

pplia

nces

22.3

19

.7

19.4

19

.6

19.2

19

.5

19.0

18

.2

17.9

18

.7

19.2

El

ectri

cal m

achi

nery

and

app

arat

us2.

3

2.4

2.

4

2.3

2.

4

2.5

2.

5

2.6

2.

6

2.4

2.

3

Radi

o, T

V, in

stru

men

ts, w

atch

es a

nd c

lock

s 1.

3

1.4

1.

3

1.4

1.

5

1.5

1.

6

1.6

1.

7

1.7

1.

5

Tran

spor

t equ

ipm

ent

7.6

7.

6

7.7

8.

0

8.0

7.

9

8.0

8.

5

8.3

8.

3

8.0

Fu

rnitu

re a

nd o

ther

item

s NE

C an

d re

cycl

ing

7.7

7.

8

7.7

7.

5

7.6

7.

5

7.5

7.

3

7.2

7.

6

7.9

20

13-2

018

East

ern

Cape

GVA

in R

mill

ions

, Con

stan

t 201

0 Pr

ices

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

%%

∆ p

.a.

East

ern

Cape

Tota

l - M

anuf

actu

ring

Sect

ors

28,1

98

26

,172

27,3

17

28

,266

28,7

82

28

,974

28,8

79

28

,754

28,8

80

28

,833

29,1

21

10

0.0%

0.10

%Fo

od, b

ever

ages

and

toba

cco

prod

ucts

6,00

5

5,

903

6,29

9

6,

253

6,40

9

6,

383

6,54

3

6,

628

6,59

8

6,

826

7,29

1

25

.0%

2.85

%Te

xtile

s, c

loth

ing

and

leat

her g

oods

965

97

6

999

95

6

958

1,

030

1,02

4

98

5

977

92

5

920

3.

2%-2

.14%

Woo

d an

d pa

per;

publ

ishi

ng a

nd p

rintin

g 1,

758

1,55

2

1,

680

1,77

2

1,

839

1,88

0

1,

924

1,94

9

2,

080

2,06

6

1,

981

6.8%

1.07

%Fu

el, p

etro

leum

, che

mic

al a

nd ru

bber

pro

duct

s5,

110

4,90

5

4,

935

5,25

4

5,

356

5,39

8

5,

291

5,15

3

5,

288

5,06

5

4,

936

16.9

%-1

.71%

Oth

er n

on-m

etal

min

eral

pro

duct

s 1,

573

1,23

5

1,

356

1,43

5

1,

442

1,47

2

1,

387

1,34

4

1,

322

1,31

1

1,

374

4.7%

-1.3

3%M

etal

pro

duct

s, m

achi

nery

and

hou

seho

ld a

pplia

nces

3,30

1

2,

903

2,92

5

3,

055

3,12

3

3,

232

3,16

3

3,

004

3,06

5

3,

234

3,38

0

11

.6%

0.91

%El

ectri

cal m

achi

nery

and

app

arat

us1,

063

945

98

2

958

95

2

1,00

6

95

9

995

96

2

863

80

2

2.8%

-4.0

5%Ra

dio,

TV,

inst

rum

ents

, wat

ches

and

clo

cks

240

23

3

235

25

8

264

26

5

282

26

6

286

28

1

257

0.

9%-0

.61%

Tran

spor

t equ

ipm

ent

6,20

0

5,

700

6,04

3

6,

452

6,50

5

6,

376

6,38

0

6,

592

6,48

9

6,

358

6,15

7

21

.1%

-0.6

9%Fu

rnitu

re a

nd o

ther

item

s NE

C an

d re

cycl

ing

1,98

4

1,

819

1,86

2

1,

873

1,93

4

1,

932

1,92

6

1,

839

1,81

2

1,

904

2,02

4

6.

9%0.

95%

East

ern

Cape

Cont

ribut

ion

by s

ecto

r - P

erce

ntag

e20

0820

0920

1020

1120

1220

1320

1420

1520

1620

1720

18Fo

od, b

ever

ages

and

toba

cco

prod

ucts

21.3

22

.6

23.1

22

.1

22.3

22

.0

22.7

23

.1

22.8

23

.7

25.0

Te

xtile

s, c

loth

ing

and

leat

her g

oods

3.4

3.

7

3.7

3.

4

3.3

3.

6

3.5

3.

4

3.4

3.

2

3.2

W

ood

and

pape

r; pu

blis

hing

and

prin

ting

6.2

5.

9

6.2

6.

3

6.4

6.

5

6.7

6.

8

7.2

7.

2

6.8

Fu

el, p

etro

leum

, che

mic

al a

nd ru

bber

pro

duct

s18

.1

18.7

18

.1

18.6

18

.6

18.6

18

.3

17.9

18

.3

17.6

16

.9

Oth

er n

on-m

etal

min

eral

pro

duct

s 5.

6

4.7

5.

0

5.1

5.

0

5.1

4.

8

4.7

4.

6

4.5

4.

7

Met

al p

rodu

cts,

mac

hine

ry a

nd h

ouse

hold

app

lianc

es11

.7

11.1

10

.7

10.8

10

.8

11.2

11

.0

10.4

10

.6

11.2

11

.6

Elec

trica

l mac

hine

ry a

nd a

ppar

atus

3.8

3.

6

3.6

3.

4

3.3

3.

5

3.3

3.

5

3.3

3.

0

2.8

Ra

dio,

TV,

inst

rum

ents

, wat

ches

and

clo

cks

0.9

0.

9

0.9

0.

9

0.9

0.

9

1.0

0.

9

1.0

1.

0

0.9

Tr

ansp

ort e

quip

men

t 22

.0

21.8

22

.1

22.8

22

.6

22.0

22

.1

22.9

22

.5

22.0

21

.1

Furn

iture

and

oth

er it

ems

NEC

and

recy

clin

g7.

0

6.9

6.

8

6.6

6.

7

6.7

6.

7

6.4

6.

3

6.6

6.

9

Sour

ce: Q

uant

ec D

ata,

as

at A

pril

2019

Regi

onal

Out

put a

nd G

VA a

t bas

ic p

rices

by

Man

ufac

turin

g In

dust

ry

13.3

RE

GIO

NA

L O

UT

PU

T A

ND

GV

A (C

ON

STA

NT

20

10 P

RIC

ES

) -

MA

NU

FAC

TU

RIN

G IN

DU

ST

RY

– S

A &

EC



Form

al E

mpl

oym

ent b

y In

dust

ry -

Sout

h Af

rica

Jobs

Act

ual

Form

al E

mpl

oym

ent (

Num

ber):

Tot

al20

13 -

2018

Sout

h Af

rica

Empl

oym

ent B

y In

dust

ry. I

n Jo

b Nu

mbe

rs20

0820

0920

1020

1120

1220

1320

1420

1520

1620

1720

18%

% ∆

p.a

.To

tal -

Eco

nom

ic S

ecto

rs10

,628

,288

10,2

68,5

43

10

,230

,206

10,5

11,0

99

10

,836

,405

11,0

42,7

10

11

,190

,173

11,5

69,0

20

11

,868

,945

12,0

01,2

54

12

,223

,391

100%

1.75

%Ag

ricul

ture

, for

estry

and

fish

ing

818,

612

71

4,66

1

66

5,27

8

64

4,12

2

696,

227

739,

961

701,

491

879,

596

873,

880

842,

556

84

5,37

3

6.9%

2.85

%M

inin

g an

d qu

arry

ing

518,

716

49

1,79

4

49

8,91

3

51

2,88

6

524,

860

509,

902

492,

928

480,

207

458,

294

464,

759

45

4,04

8

3.7%

-2.1

9%M

anuf

actu

ring

1,29

7,02

8

1,

211,

371

1,

177,

382

1,

167,

656

1,16

6,54

4

1,16

7,98

2

1,16

0,55

2

1,17

3,92

8

1,18

8,38

3

1,20

0,29

6

1,

214,

139

9.9%

0.79

%El

ectri

city

, gas

and

wat

er

55,5

98

55

,779

56,4

50

57

,952

59,3

24

59

,375

59,4

92

60

,036

62,2

98

63,2

90

61

,882

0.5%

0.84

%Co

nstru

ctio

n48

0,00

5

442,

364

436,

447

476,

648

51

1,10

8

52

8,13

3

55

2,21

1

56

8,69

7

61

5,15

0

63

1,47

4

634,

149

5.

2%4.

01%

Who

lesa

le a

nd re

tail

trade

, cat

erin

g an

d ac

com

mod

atio

n 1,

741,

245

1,67

5,01

8

1,69

6,51

5

1,75

5,65

1

1,

821,

014

1,

859,

737

1,

893,

118

1,

968,

330

2,

073,

777

2,

140,

763

2,21

4,57

8

18

.1%

3.82

%Tr

ansp

ort,

stor

age

and

com

mun

icat

ion

369,

321

36

3,57

9

38

0,69

0

40

5,24

6

439,

366

456,

983

460,

891

467,

669

468,

210

474,

967

48

2,65

6

3.9%

1.12

%Fi

nanc

e, in

sura

nce,

real

est

ate

and

busi

ness

ser

vices

1,91

8,70

4

1,

829,

585

1,

827,

896

1,

913,

849

1,97

4,03

4

2,02

2,46

8

2,05

2,92

7

2,12

0,90

0

2,19

8,32

1

2,24

8,65

7

2,

322,

188

19.0

%2.

96%

Gen

eral

gov

ernm

ent

1,70

4,27

3

1,

767,

968

1,

820,

610

1,

911,

834

1,94

3,40

1

1,91

9,94

1

2,01

0,66

4

1,96

9,14

9

2,00

3,27

1

1,93

3,82

0

1,

954,

244

16.0

%0.

36%

Com

mun

ity, s

ocia

l and

per

sona

l ser

vices

1,

724,

786

1,71

6,42

4

1,67

0,02

5

1,66

5,25

5

1,

700,

527

1,

778,

228

1,

805,

899

1,

880,

508

1,

927,

361

2,

000,

672

2,04

0,13

4

16

.7%

2.95

%So

uth

Afric

aCo

ntrib

utio

n by

sec

tor -

Per

cent

age

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Agric

ultu

re, f

ores

try a

nd fi

shin

g 7.

7

7.

0

6.

5

6.

1

6.

4

6.

7

6.

3

7.

6

7.

4

7.

0

6.9

Min

ing

and

quar

ryin

g 4.

9

4.

8

4.

9

4.

9

4.

8

4.

6

4.

4

4.

2

3.

9

3.

9

3.7

Man

ufac

turin

g12

.2

11.8

11

.5

11.1

10

.8

10.6

10

.4

10.1

10

.0

10

.0

9.9

Elec

trici

ty, g

as a

nd w

ater

0.

5

0.

5

0.

6

0.

6

0.

5

0.

5

0.

5

0.

5

0.

5

0.

5

0.5

Cons

truct

ion

4.5

4.3

4.3

4.5

4.7

4.8

4.9

4.9

5.2

5.3

5.

2

W

hole

sale

and

reta

il tra

de, c

ater

ing

and

acco

mm

odat

ion

16.4

16

.3

16.6

16

.7

16.8

16

.8

16.9

17

.0

17.5

17.8

18

.1

Tran

spor

t, st

orag

e an

d co

mm

unic

atio

n 3.

5

3.

5

3.

7

3.

9

4.

1

4.

1

4.

1

4.

0

3.

9

4.

0

3.9

Fina

nce,

insu

ranc

e, re

al e

stat

e an

d bu

sine

ss s

ervic

es18

.1

17.8

17

.9

18.2

18

.2

18.3

18

.3

18.3

18

.5

18

.7

19.0

G

ener

al g

over

nmen

t 16

.0

17.2

17

.8

18.2

17

.9

17.4

18

.0

17.0

16

.9

16

.1

16.0

Co

mm

unity

, soc

ial a

nd p

erso

nal s

ervic

es

16.2

16

.7

16.3

15

.8

15.7

16

.1

16.1

16

.3

16.2

16.7

16

.7

Sour

ce: Q

uant

ec D

ata,

201

9Fo

rmal

Em

ploy

men

t by

Indu

stry

- Ea

ster

n Ca

peJo

bs A

ctua

lFo

rmal

Em

ploy

men

t (Nu

mbe

r): T

otal

2013

- 20

18Ea

ster

n Ca

peEm

ploy

men

t By

Indu

stry

. In

Job

Num

bers

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

%%

∆ p

.a.

Tota

l - E

cono

mic

Sec

tors

795,

855

77

0,99

9

76

5,07

7

78

3,66

0

805,

287

821,

367

835,

443

863,

114

886,

566

891,

731

90

7,01

2

100%

2.09

%Ag

ricul

ture

, for

estry

and

fish

ing

67,5

93

59

,358

55,6

29

54

,286

59,2

56

63

,383

60,7

82

75

,692

75,5

97

73,2

72

73

,883

8.1%

3.31

%M

inin

g an

d qu

arry

ing

2,20

7

1,

713

1,

678

1,

647

1,72

7

1,72

1

1,75

2

1,84

7

1,88

8

1,87

8

1,

723

0.2%

0.02

%M

anuf

actu

ring

92,3

37

84

,138

80,4

47

79

,171

78,6

71

78

,085

76,8

74

77

,703

79,1

89

79,2

00

78

,744

8.7%

0.17

%El

ectri

city

, gas

and

wat

er

2,84

8

2,

870

2,

888

2,

964

3,02

1

3,01

0

3,02

9

3,07

8

3,19

6

3,23

7

3,

191

0.4%

1.20

%Co

nstru

ctio

n33

,265

30,5

48

29

,812

32,4

90

34

,638

35,6

24

37

,484

38,5

33

41

,892

43

,047

43,2

57

4.

8%4.

29%

Who

lesa

le a

nd re

tail

trade

, cat

erin

g an

d ac

com

mod

atio

n 12

8,32

0

123,

541

125,

350

129,

902

13

4,94

3

13

8,04

8

14

0,64

5

14

6,33

6

15

4,21

7

15

9,34

4

164,

946

18

.2%

3.90

%Tr

ansp

ort,

stor

age

and

com

mun

icat

ion

21,5

88

21

,168

22,1

54

23

,506

25,4

14

26

,208

26,0

32

26

,366

26,7

55

27,0

26

27

,436

3.0%

0.94

%Fi

nanc

e, in

sura

nce,

real

est

ate

and

busi

ness

ser

vices

105,

052

99

,821

98,9

91

10

3,00

3

105,

425

107,

233

108,

466

111,

605

114,

935

117,

423

12

1,39

4

13.4

%2.

64%

Gen

eral

gov

ernm

ent

187,

354

19

3,76

9

19

8,91

3

20

8,28

3

211,

098

207,

841

216,

936

211,

863

215,

045

207,

056

20

8,78

5

23.0

%0.

09%

Com

mun

ity, s

ocia

l and

per

sona

l ser

vices

15

5,29

1

154,

073

149,

215

148,

408

15

1,09

4

16

0,21

4

16

3,44

3

17

0,09

1

17

3,85

2

18

0,24

8

183,

653

20

.2%

2.93

%Ea

ster

n Ca

peCo

ntrib

utio

n by

sec

tor -

Per

cent

age

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Agric

ultu

re, f

ores

try a

nd fi

shin

g 8.

5

7.

7

7.

3

6.

9

7.

4

7.

7

7.

3

8.

8

8.

5

8.

2

8.1

Min

ing

and

quar

ryin

g 0.

3

0.

2

0.

2

0.

2

0.

2

0.

2

0.

2

0.

2

0.

2

0.

2

0.2

Man

ufac

turin

g11

.6

10.9

10

.5

10.1

9.

8

9.

5

9.

2

9.

0

8.

9

8.

9

8.7

Elec

trici

ty, g

as a

nd w

ater

0.

4

0.

4

0.

4

0.

4

0.

4

0.

4

0.

4

0.

4

0.

4

0.

4

0.4

Cons

truct

ion

4.2

4.0

3.9

4.1

4.3

4.3

4.5

4.5

4.7

4.8

4.

8

W

hole

sale

and

reta

il tra

de, c

ater

ing

and

acco

mm

odat

ion

16.1

16

.0

16.4

16

.6

16.8

16

.8

16.8

17

.0

17.4

17.9

18

.2

Tran

spor

t, st

orag

e an

d co

mm

unic

atio

n 2.

7

2.

7

2.

9

3.

0

3.

2

3.

2

3.

1

3.

1

3.

0

3.

0

3.0

Fina

nce,

insu

ranc

e, re

al e

stat

e an

d bu

sine

ss s

ervic

es13

.2

12.9

12

.9

13.1

13

.1

13.1

13

.0

12.9

13

.0

13

.2

13.4

G

ener

al g

over

nmen

t 23

.5

25.1

26

.0

26.6

26

.2

25.3

26

.0

24.5

24

.3

23

.2

23.0

Co

mm

unity

, soc

ial a

nd p

erso

nal s

ervic

es

19.5

20

.0

19.5

18

.9

18.8

19

.5

19.6

19

.7

19.6

20.2

20

.2

Sour

ce: Q

uant

ec D

ata,

201

9

13.4

RE

GIO

NA

L E

MP

LOY

ME

NT

PE

R IN

DU

ST

RY

– S

A &

EC



Form

al M

anuf

actu

ring

Empl

oym

ent b

y In

dust

ry -

Sout

h Af

rica

Form

al M

anuf

actu

ring

Empl

oym

ent (

Num

ber):

Tot

al20

13 -

2018

Sout

h Af

rica

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

%%

∆ p

.a.

Tota

l - M

anuf

actu

ring

Sect

ors

1,29

7,02

8

1,

211,

371

1,

177,

382

1,

167,

656

1,16

6,54

4

1,16

7,98

2

1,16

0,55

2

1,17

3,92

8

1,18

8,38

3

1,20

0,29

6

1,

214,

139

100.

0%0.

79%

Food

, bev

erag

es a

nd to

bacc

o pr

oduc

ts21

8,58

8

213,

785

210,

342

203,

694

20

2,13

7

20

6,38

3

21

3,05

5

22

6,58

9

24

1,81

1

24

4,05

5

246,

866

20

.3%

3.92

%Te

xtile

s, c

loth

ing

and

leat

her g

oods

125,

067

11

1,19

1

10

5,22

2

98

,428

92,9

88

89

,411

88,6

34

92

,626

92,1

46

88,4

19

85

,187

7.0%

-0.9

4%W

ood

and

pape

r; pu

blis

hing

and

prin

ting

136,

442

13

1,31

5

13

0,42

1

13

3,25

7

136,

679

137,

412

138,

084

136,

671

134,

576

132,

536

13

3,24

0

11.0

%-0

.61%

Fuel

, pet

role

um, c

hem

ical

and

rubb

er p

rodu

cts

159,

833

15

0,55

3

14

8,34

9

15

2,32

0

157,

411

161,

673

157,

986

157,

198

156,

480

163,

931

17

3,42

4

14.3

%1.

45%

Oth

er n

on-m

etal

min

eral

pro

duct

s 77

,239

64,4

79

58

,187

55,7

46

54

,839

54,7

37

55

,432

56,7

33

56

,106

58

,380

60,7

13

5.

0%2.

18%

Met

al p

rodu

cts,

mac

hine

ry a

nd h

ouse

hold

app

lianc

es30

8,20

9

293,

410

290,

916

288,

465

28

7,80

6

28

6,01

5

27

5,43

1

26

8,38

1

26

2,30

3

27

1,75

7

275,

209

22

.7%

-0.7

6%El

ectri

cal m

achi

nery

and

app

arat

us40

,568

37,3

54

37

,701

42,4

76

42

,317

42,9

08

43

,193

43,6

95

44

,214

37

,523

39,8

95

3.

3%-1

.40%

Radi

o, T

V, in

stru

men

ts, w

atch

es a

nd c

lock

s 16

,624

16,7

82

16

,940

16,8

90

17

,040

17,3

59

17

,736

17,4

30

18

,552

19

,349

19,5

45

1.

6%2.

52%

Tran

spor

t equ

ipm

ent

120,

523

10

8,41

9

10

4,23

0

10

4,39

1

105,

786

105,

635

104,

107

106,

229

112,

443

113,

279

10

8,83

6

9.0%

0.61

%Fu

rnitu

re a

nd o

ther

item

s NE

C an

d re

cycl

ing

93,9

35

84

,083

75,0

74

71

,989

69,5

41

66

,449

66,8

94

68

,376

69,7

52

71,0

67

71

,224

5.9%

1.44

%So

uth

Afric

aCo

ntrib

utio

n by

sec

tor -

Per

cent

age

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Food

, bev

erag

es a

nd to

bacc

o pr

oduc

ts16

.9

17.6

17

.9

17.4

17

.3

17.7

18

.4

19.3

20

.3

20

.3

20.3

Te

xtile

s, c

loth

ing

and

leat

her g

oods

9.6

9.2

8.9

8.4

8.0

7.7

7.6

7.9

7.8

7.4

7.

0

W

ood

and

pape

r; pu

blis

hing

and

prin

ting

10.5

10

.8

11.1

11

.4

11.7

11

.8

11.9

11

.6

11.3

11.0

11

.0

Fuel

, pet

role

um, c

hem

ical

and

rubb

er p

rodu

cts

12.3

12

.4

12.6

13

.0

13.5

13

.8

13.6

13

.4

13.2

13.7

14

.3

Oth

er n

on-m

etal

min

eral

pro

duct

s 6.

0

5.

3

4.

9

4.

8

4.

7

4.

7

4.

8

4.

8

4.

7

4.

9

5.0

Met

al p

rodu

cts,

mac

hine

ry a

nd h

ouse

hold

app

lianc

es23

.8

24.2

24

.7

24.7

24

.7

24.5

23

.7

22.9

22

.1

22

.6

22.7

El

ectri

cal m

achi

nery

and

app

arat

us3.

1

3.

1

3.

2

3.

6

3.

6

3.

7

3.

7

3.

7

3.

7

3.

1

3.3

Radi

o, T

V, in

stru

men

ts, w

atch

es a

nd c

lock

s 1.

3

1.

4

1.

4

1.

4

1.

5

1.

5

1.

5

1.

5

1.

6

1.

6

1.6

Tran

spor

t equ

ipm

ent

9.3

9.0

8.9

8.9

9.1

9.0

9.0

9.0

9.5

9.4

9.

0

Fu

rnitu

re a

nd o

ther

item

s NE

C an

d re

cycl

ing

7.2

6.9

6.4

6.2

6.0

5.7

5.8

5.8

5.9

5.9

5.

9

So

urce

: Qua

ntec

Dat

a, 2

019

Form

al M

anuf

actu

ring

Empl

oym

ent b

y In

dust

ry -

East

ern

Cape

Form

al M

anuf

actu

ring

Empl

oym

ent (

Num

ber):

Tot

al20

13 -

2018

East

ern

Cape

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

%%

∆ p

.a.

Tota

l - M

anuf

actu

ring

Sect

ors

92,3

37

84

,138

80,4

47

79

,171

78,6

71

78

,085

76,8

74

77

,703

79,1

89

79,2

00

78

,744

100.

0%0.

17%

Food

, bev

erag

es a

nd to

bacc

o pr

oduc

ts15

,040

14,6

36

14

,343

13,8

52

13

,696

13,9

20

14

,284

15,1

29

16

,177

16

,381

16,5

52

21

.0%

3.78

%Te

xtile

s, c

loth

ing

and

leat

her g

oods

9,01

3

7,

972

7,

556

6,

970

6,45

2

6,18

6

6,10

5

6,31

1

6,14

6

5,85

7

5,

488

7.0%

-2.2

6%W

ood

and

pape

r; pu

blis

hing

and

prin

ting

6,73

9

6,

352

6,

293

6,

393

6,61

7

6,64

6

6,79

1

6,80

2

6,76

8

6,62

1

6,

750

8.6%

0.31

%Fu

el, p

etro

leum

, che

mic

al a

nd ru

bber

pro

duct

s9,

820

9,05

6

8,52

1

8,73

2

8,

893

8,

873

8,

551

8,

545

8,

552

9,

003

9,41

7

12

.0%

1.23

%O

ther

non

-met

al m

iner

al p

rodu

cts

4,95

0

4,

151

3,

693

3,

505

3,42

2

3,39

7

3,40

6

3,46

0

3,40

9

3,52

9

3,

640

4.6%

1.43

%M

etal

pro

duct

s, m

achi

nery

and

hou

seho

ld a

pplia

nces

12,8

48

12

,072

11,8

45

11

,701

11,7

32

11

,653

11,1

56

10

,807

10,5

93

11,0

73

11

,182

14.2

%-0

.81%

Elec

trica

l mac

hine

ry a

nd a

ppar

atus

4,08

8

3,

572

3,

554

3,

692

3,60

6

3,55

0

3,34

1

3,23

3

3,21

7

2,49

8

2,

657

3.4%

-5.0

3%Ra

dio,

TV,

inst

rum

ents

, wat

ches

and

clo

cks

761

75

2

75

2

73

3

731

727

727

701

734

762

76

1

1.0%

0.94

%Tr

ansp

ort e

quip

men

t 23

,981

21,0

51

19

,894

19,8

26

19

,949

19,7

53

19

,126

19,2

98

20

,115

19

,970

18,8

51

23

.9%

-0.9

1%Fu

rnitu

re a

nd o

ther

item

s NE

C an

d re

cycl

ing

5,09

7

4,

524

3,

996

3,

767

3,57

3

3,38

0

3,38

7

3,41

7

3,47

8

3,50

6

3,

446

4.4%

0.39

%Ea

ster

n Ca

peCo

ntrib

utio

n by

sec

tor -

Per

cent

age

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Food

, bev

erag

es a

nd to

bacc

o pr

oduc

ts16

.3

17.4

17

.8

17.5

17

.4

17.8

18

.6

19.5

20

.4

20

.7

21.0

Te

xtile

s, c

loth

ing

and

leat

her g

oods

9.8

9.5

9.4

8.8

8.2

7.9

7.9

8.1

7.8

7.4

7.

0

W

ood

and

pape

r; pu

blis

hing

and

prin

ting

7.3

7.5

7.8

8.1

8.4

8.5

8.8

8.8

8.5

8.4

8.

6

Fu

el, p

etro

leum

, che

mic

al a

nd ru

bber

pro

duct

s10

.6

10.8

10

.6

11.0

11

.3

11.4

11

.1

11.0

10

.8

11

.4

12.0

O

ther

non

-met

al m

iner

al p

rodu

cts

5.4

4.9

4.6

4.4

4.3

4.4

4.4

4.5

4.3

4.5

4.

6

M

etal

pro

duct

s, m

achi

nery

and

hou

seho

ld a

pplia

nces

13.9

14

.3

14.7

14

.8

14.9

14

.9

14.5

13

.9

13.4

14.0

14

.2

Elec

trica

l mac

hine

ry a

nd a

ppar

atus

4.4

4.2

4.4

4.7

4.6

4.5

4.3

4.2

4.1

3.2

3.

4

Ra

dio,

TV,

inst

rum

ents

, wat

ches

and

clo

cks

0.8

0.9

0.9

0.9

0.9

0.9

0.9

0.9

0.9

1.0

1.

0

Tr

ansp

ort e

quip

men

t 26

.0

25.0

24

.7

25.0

25

.4

25.3

24

.9

24.8

25

.4

25

.2

23.9

Fu

rnitu

re a

nd o

ther

item

s NE

C an

d re

cycl

ing

5.5

5.4

5.0

4.8

4.5

4.3

4.4

4.4

4.4

4.4

4.

4

So

urce

: Qua

ntec

Dat

a, 2

019

13.5

RE

GIO

NA

L E

MP

LOY

ME

NT

PE

R M

AN

UFA

CT

UR

ING

IND

US

TR

Y –

SA

& E

C

A STATUS QUO AND BASELINE ASSESSMENT

OCEANS ECONOMY

in the Eastern Cape and South Africa

oceans economy - nelson mandela university

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