OBG talks to Siphiwe Ngwenya, Group CEO, Gauteng Growth and Development Agency (GGDA)

Interview: Siphiwe Ngwenya

What distinguishes Gauteng’s framework for investor support from those of other provinces?

SIPHIWE NGWENYA: While provinces are unable to offer financial incentives on their own, we work to ensure that firms investing in the province can access those offered by the national government. We also work with municipalities and government departments to assist in reducing the costs of doing business – enabling access to facilities, such as electricity and telecommunications, and securing permits, such as land-use documents and workers’ permits. We also assist investors in accessing development funding and help them to package projects to meet the funding requirements of development financing institutions. Environmental impact assessments are something investors find particularly challenging, and we help them navigate the documentation and consultation process. Currently, the average time required to set up a company is 18 days. We are in the final stages of establishing a one-stop Gauteng Investment Centre that will house representatives from departments like Revenue Services and Home Affairs. We aim to reduce the time to establish a firm to six days.

Is the competition for investment a zero-sum game?

NGWENYA: Every province has advantages and disadvantages that it looks to exploit and mitigate. When it comes to attracting automotive original equipment manufacturers, we feel that our manufacturing strength is advantageous, but we are also competing against KwaZulu-Natal and the Eastern Cape, both of which have harbours that lower the comparative costs of exports. Our manufacturing capability can also help support other provinces. For example, the Northern Cape is looking to undergo fracking and will also be building huge solar generation capacity. However, they lack the manufacturing base and skills to make the components, which we can supply. Conversely, we lack a resource base but can act as a destination for some provinces’ raw materials that would otherwise be exported at lower margins. For example, rare earth metals are used as inputs for cell phones, televisions and laptop components, all of which are made in Gauteng. We are looking to revive the steel manufacturing industry, which could mean that manganese mined in the Northern Cape can be consumed domestically.

Which sectors are targeted for development?

NGWENYA: There are two special economic zones (SEZ) in the pipeline, for which we will be inviting investors to not only establish operations, but to also support us in the infrastructure delivery. The first will be around OR Tambo International Airport, focusing on logistics, jewellery and mining equipment manufacturing. The second SEZ will be located near the national football stadium and will leverage the telecommunications infrastructure that was built for the World Cup to attract ICT firms. For the time being, the national government is allowing two SEZs per province, and we have a number of others in the pre-feasibility stage, with the goal that each municipality will eventually have at least one flagship project. For the West Rand, we are exploring a “green city” around Lanseria airport. Sedibeng is set to be the base for the aforementioned steel industry revival. And for Tshwane, we want to expand the existing programmes related to incubation and skills development for automotive production.

We are also working in partnership with national initiatives, such as the Passenger Rail Agency of South Africa’s (PRASA) rolling stock programme, and we will set up local manufacturing capability and ensure skills transfer from Alstom, which was awarded the contract.

We will also partner PRASA to develop shopping complexes near some of the main railway stations in the provinces, so these locations can be business nodes.

We are also undertaking energy conservation projects to convert municipal waste for generation, and we have run a pilot project installing gas cylinders in taxis to test hybrid energy for public transport. As the programme is expanded, this will create the need for an investor to construct a local gas cylinder manufacturing plant.