Durban’s development plans seek to incorporate private investment

As one of South Africa’s three main urban centres, Durban plays a central economic and social role in KwaZulu-Natal (KZN). For FY2013, the city posted a GDP growth rate of 2.6%, behind only Johannesburg (2.75%), and well ahead of the national rate of 1.89%. The main sectors contributing to Durban’s economic growth were manufacturing (22%), finance (22%), community services (17%), trade (17%) and transport (16%).

Tourism

Tourism also continues to be a major economic contributor. In 2013 the city received 3.5m tourists; however, this is expected to increase to 5m by 2020, with 1m of these being foreign visitors. This is set to boost the economy by R10bn ($947m) and create an additional 74,000 jobs.

To this end, several urban infrastructure projects are slated to help bolster the appeal of Durban as a destination. A number of the city’s precincts, for example, are currently undergoing regeneration projects, which include a integrated rapid public transport network called “GO! Durban” and a high-speed train between Johannesburg and Durban, the first phase of which is scheduled for completion within four years.

The city is also working to publicise the appeal of its beachfront, which is useable for swimming, unlike Cape Town’s, where the water temperature is too low. Most beachfront property is either in the hands of the city or of the Tsogo Sun hotel and casino group, the latter of which has announced it will be spending R2.5bn ($237m) to upgrade its existing beachfront footprint. The Durban Point precinct, adjacent to the harbour, has suffered from underinvestment in recent years, but Malaysian property group UEM Sunrise, which owns a 50% shareholding in the Durban Point Development Company alongside the city, has announced that it will be committing billions into rejuvenating the area.

According to Russell Curtis, the head of Durban Investment Promotion (commonly referred to as DIPA), UEM’s plans call for the construction of the tallest tower in Africa, which at 80 stories will include a mixture of hotel, residential, retail and commercial space.

According to the city’s “Visitor Marketing Strategy 2013-20”, it will be vital for Durban to provide additional incentives to encourage similar additional private tourism development. To encourage this, the city plans to publicise itself via trade shows, e-marketing, television ad spots and international tourism fairs.

Development Plans

Wider development in the metropolitan area is guided by a number of key policy documents, the most significant of which is the Integrated Development Plan (IDP). The active component of the IDP, Plan 2, includes 11 key programmes. The first programme seeks to establish effective lobbying mechanisms and provide strategic support through the identification of influential economic and social leaders that can ensure important development projects are not bogged down during the decision-making processes. Programme 2.2 involves ensuring that accurate development data about Durban is available to decision makers, while programme 2.3 lists a range of strategic sectors to receive focus, including furniture production, chemicals, automobiles, fashion design and maritime activities. Meanwhile, programme 2.4 is specific to boosting the local film and digital media industry, 2.7 is focused on fresh produce, and 2.9 is dedicated to enhancing the tourism sector.

Additional programmes focus on measures aimed at facilitating investment and boosting investor activity through marketing efforts, care of existing investors, as well as foreign investor outreach.

Investment Promotion

Indeed, private sector investment is regarded as critical for achieving many of the objectives laid out in the IDP. “The need for accelerated private sector investment and the lack of public sector infrastructure investment have been recognised,” Curtis told OBG. “We are taking investment far more seriously than we have in the last decade.”

DIPA cooperates closely with a range of national and provincial investment promotion bodies, as well as the Durban Chamber of Commerce and Industry and other key organisations, to promote investment in the city.

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The Report: South Africa 2014

KwaZulu-Natal chapter from The Report: South Africa 2014

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