DRAFT REGIONAL INDUSTRIAL DEVELOPMENT STRATEGY

SOUTH AFRICA

“Promoting industrialization through partnerships”

This report is solely for the use of dti personnel. No part of it may be circulated, quoted, or reproduced for distribution outside the dti without prior written

approval from the dti.

SPATIAL DISTRIBUTION OF GVAper 50km Mesozone

The map below shows the heavily biased distribution of economic activity in South Africa with the majority of

Gross Value Added (GVA) clustered around three major metropoles

Map prepared by CSIR Built Environment for NSDP 2006 (Presidency, South Africa) and RIDS (dti), May 2006

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MiddelburgMiddelburgMiddelburgMiddelburgMiddelburgMiddelburgMiddelburgMiddelburgMiddelburgMiddelburgMiddelburgMiddelburgMiddelburgMiddelburgMiddelburgMiddelburgMiddelburgMiddelburgMiddelburgMiddelburgMiddelburgMiddelburgMiddelburgMiddelburgMiddelburg

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Aliwal NorthAliwal NorthAliwal NorthAliwal NorthAliwal NorthAliwal NorthAliwal NorthAliwal NorthAliwal NorthAliwal NorthAliwal NorthAliwal NorthAliwal NorthAliwal NorthAliwal NorthAliwal NorthAliwal NorthAliwal NorthAliwal NorthAliwal NorthAliwal NorthAliwal NorthAliwal NorthAliwal NorthAliwal North

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PietermaritzburgPietermaritzburgPietermaritzburgPietermaritzburgPietermaritzburgPietermaritzburgPietermaritzburgPietermaritzburgPietermaritzburgPietermaritzburgPietermaritzburgPietermaritzburgPietermaritzburgPietermaritzburgPietermaritzburgPietermaritzburgPietermaritzburgPietermaritzburgPietermaritzburgPietermaritzburgPietermaritzburgPietermaritzburgPietermaritzburgPietermaritzburgPietermaritzburg

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MiddelburgMiddelburgMiddelburgMiddelburgMiddelburgMiddelburgMiddelburgMiddelburgMiddelburgMiddelburgMiddelburgMiddelburgMiddelburgMiddelburgMiddelburgMiddelburgMiddelburgMiddelburgMiddelburgMiddelburgMiddelburgMiddelburgMiddelburgMiddelburgMiddelburg

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PhalaborwaPhalaborwaPhalaborwaPhalaborwaPhalaborwaPhalaborwaPhalaborwaPhalaborwaPhalaborwaPhalaborwaPhalaborwaPhalaborwaPhalaborwaPhalaborwaPhalaborwaPhalaborwaPhalaborwaPhalaborwaPhalaborwaPhalaborwaPhalaborwaPhalaborwaPhalaborwaPhalaborwaPhalaborwa

ThohoyandouThohoyandouThohoyandouThohoyandouThohoyandouThohoyandouThohoyandouThohoyandouThohoyandouThohoyandouThohoyandouThohoyandouThohoyandouThohoyandouThohoyandouThohoyandouThohoyandouThohoyandouThohoyandouThohoyandouThohoyandouThohoyandouThohoyandouThohoyandouThohoyandou

MusinaMusinaMusinaMusinaMusinaMusinaMusinaMusinaMusinaMusinaMusinaMusinaMusinaMusinaMusinaMusinaMusinaMusinaMusinaMusinaMusinaMusinaMusinaMusinaMusina

PolokwanePolokwanePolokwanePolokwanePolokwanePolokwanePolokwanePolokwanePolokwanePolokwanePolokwanePolokwanePolokwanePolokwanePolokwanePolokwanePolokwanePolokwanePolokwanePolokwanePolokwanePolokwanePolokwanePolokwanePolokwane

TzaneenTzaneenTzaneenTzaneenTzaneenTzaneenTzaneenTzaneenTzaneenTzaneenTzaneenTzaneenTzaneenTzaneenTzaneenTzaneenTzaneenTzaneenTzaneenTzaneenTzaneenTzaneenTzaneenTzaneenTzaneen

Richards Bay

Total GVA per 50km (Rand)0 - 5 mil5 - 10 mil10 - 15 mil15 - 30 mil30 - 45 mil45 - 65 mil65- 90 mil90 - 130 mil130 - 190 mil190 - 250 mil250 - 330 mil330 - 430 mil430 - 550 mil550 - 700 mil700 - 1 bn1 bn - 1.3 bn1.3 bn - 1.6bn1.6 bn - 2.2 bn2.2 bn - 3 bn3 bn - 4 bn4 bn - 6 bn6 bn - 9 bn9 bn - 30 bn

TOTAL GVA 2004Source: REX version 2.0c (190)Economic Focus: 2004GVA-current prices, based on SA Mesoframe

Distribution of economic activity based (South Africa, 2004)

100 0 100 200 300 Kilometers

N

2

our future through sience

District Councils

Provinces

Main Roads

LEGEND

Distribution of Economic Activity, Based on GVA (2004), SOUTH AFRICA

PROBLEM STATEMENT

• Sharpest regional disparities at present are between the three main metropolitan complexes and the rest of the country

• Three broad categories of regions are considered, these will be applied in determining potential impact scenarios for the RIDS:

i. 52 Districts and Metros, in the nine provinces

ii. main services hubs of a wider functional region or macro-region, in regions where potential and latent potential exists.

iii. main production complexes of a cluster or corridor of inter-related industries

STRATEGIC INTENT OF RIDS

• TO ENABLE ALL AREAS IN OUR SA ECONOMY TO ATTAIN THEIR OPTIMAL ECONOMIC POTENTIAL;

• BY FACILITATING LOCAL DEVELOPMENT

EMBEDDED IN A REGION/DISTRICT THROUGH LINKAGES WITHIN EXSTING AND LATENT INDUSTRIAL AND ECONOMIC BASE

• To stimulate investments that will promote sustained high growth in a local community

• To focus on a region’s potential and identify what local stakeholders can and need to do to ensure their local community reaches its potential

• To assess a community’s comparative advantage, identify new or existing market opportunities for businesses, and reduce obstacles to business expansion and creation

• To have an impact on the economic viability districts

• To create new jobs, help communities retain existing jobs, help businesses access capital

• To contribute to a broader national framework with a spatial dimension, in order to increase each region’s global competitiveness.

STRATEGIC INTENT

UNEMPLOYMENT TRENDSSource:Labour Force survey, September 2005

PROVINCIAL UNEMPLOYMENT RATE (2001-05)

05

10152025303540

PROVINCE

PE

RC

EN

TAG

E

2001

2002

2003

2004

2005

GROWTH DISPARITIES…(%GDP)

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

WC % GGP EC % GGP NC % GGP FS % GGP KZN % GGP NW % GGP GP % GGP Mpumalanga% GGP

Limpopo % GGP

2000

2001

2002

2003

2004

The dti’s APPROACH TO LED

To bring together resources from within and outside theCommunity to address:

• local governments’ challenges on land management practices, outdated infrastructure, limited business planning and management skills, poor access to markets and market knowledge , and

• to promote economic growth in a systematic and organized manner at the local level

To become a catalyst for promoting LED as a keyingredient to achieving broad-based and equitable economicgrowth by assisting:

• the local community to research its own economic strengths, agree upon a common strategy (Regional Industrial Road Map) and organize itself to implement the strategy (Indicative Industrial Business Plan).

LED INTERVENTION PROPOSITION

• The dti, in conjunction with the dplg and the presidency will assist district municipalities to,

– formulate their industrial road maps, – form local growth coalitions, – build local capacity and,– finalise local growth business plans

• Each region’s respective plan can serve as a national development trajectory; promoted to guide all sector departments’ interventions in that region.

• Bringing local stakeholders around one table in a form of a PPP helps to build trust, encourages innovation , fosters social cohesion, and thus decreases the risk of further conflict.

Growth in GGVA at Constant 2000 Prices (2000 to 2004)

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

Aver

age

Annu

al %

Cha

nge

Western Cape

Eastern Cape

Northern Cape

Free State

Kw azulu Natal

Gauteng

North West

Mpumalanga

Limpopo

GOALS SUPPORT MEASURES

BUILD PARTNERSHIPS FORMATION OF PRIVATE-PUBLIC PARTNERSHIPS

DEVELOPMENT OF REGIONAL INDUSTRIAL ROAD

MAPS

DEVELOPMENT OF INDICATIVE BUSINESS PLANS

ADDRESS ECONOMIC DECLINE

BUSINESS RETENTION AND EXPANSION PROGRAMME

ISRDP & URP (Project Consolidate)

MUNICIPAL ECONOMIC ANALYSIS CAPACITY

BUILDING FACILITY

SMALL TOWNS REGENERATION

BUILD REGIONAL AGGLOMERATIONS

REGIONAL INDUSTRIAL DEVELOPMENT FUND

REGIONAL INDUSTRIAL DEVELOPMENT BILL

INDUSTRIAL CLUSTERING CAPACITY BUILDING FUND

SPECIAL ECONOMIC ZONES

RIDS’s THREE INTERLINKED GOALS

INVESTMENT PROMOTIONTrade and Investment South Africa Division (TISA)Promotes investment in the following sectors:• Agro-processing• Automotive• Aquaculture• BPO• Capital Equipment• Chemicals• Cultural Industries• Tourism• Mining & mineral beneficiation

Hand-holds the investor (domestic and international) to easethe investment decision-making process

Match-make the investor with stakeholders within areas of potential, where opportunities can be optimally exploited in the interest of all stakeholders involved

Role of the RIDSWork closely with districts in ensuring some level ofreadiness/preparedness so that when a viable investmentopportunity arises, that investment takes place on the district’s terms

THANK YOU!