KwaZulu-Natal is a vibrant region characterised by much diversity. The Province is a multi cultural mix of people who live and work in fast developing first world urban centres with competitive infrastructure or in very under resourced rural areas. KwaZulu-Natal has great climatic conditions as well as a number of tourist attractions ' stunning mountainous areas, wild life reserves, and beautiful beaches washed by the warm Indian Ocean.
KwaZulu-Natal is one of the nine provinces in South Africa. Situated on the east coast of the country, the Province neighbours three other provinces ' Eastern Cape, Mpumalanga and Free State.
In addition, the Province borders the countries of Mozambique and Swaziland in the north, and Lesotho in the south. KwaZulu-Natal is South Africa third smallest province, taking up 7, 7% of the country's land area and has a total area of 94 361 km2.
The province is home to the largest percentage (20 % of the South African population) ' an estimated 10,9 million people (2015). Statistics South Africa (Stats SA) estimated the mid-year population of the country as 55, 6 million in 2016.
KwaZulu-Natal has a number of attributes and strengths that other South African provinces do not have. The Province's well-developed infrastructure includes roads, railways and telecommunications, a sophisticated commercial and financial business structure, complemented by a full spectrum of professional services.
Of major significance is that the ports of Durban and Richards Bay, around which KwaZulu-Natal is established, are two of Africa's gateways to the sealanes of the world. Durban and Richards Bay ports are southern Africa's busiest in terms of handling cargo by value and bulk respectively. In the oceans economy a Public-Private Partnership has been established to invest in the ports infrastructure to the amount of R7 billion. Both Richards Bay and Durban will benefit from the planned port infrastructure development and port facilities maintenance.
The cosmopolitan city of Durban and surrounding towns form the eThekwini Metropolitan Municipality, which is the economic powerhouse of the Province. The GDP generated ranks eThekwini as the second largest economic centre behind Johannesburg in South Africa. Durban is described as the economic hub of KwaZulu-Natal and a gateway to Africa.
KwaZulu-Natal (KZN) has historically been a key component of the South African economy and is the second largest provincial contributor to South Africa's GDP after Gauteng. According to stats SA 2014 figures it contributes R206, 8 billion (16, 1%) towards the country's Gross Domestic Product (GDP) and is performing above the national average.
The real economy (represented by agriculture, mining, manufacturing and construction) makes up 25% of KwaZulu-Natal's output.
The largest real-economy sector was manufacturing, at 16% of the provincial economy, followed by agriculture at 3%, construction at 4%, and mining at 2%. KwaZulu-Natal contributed 22% of national manufacturing, 25% of national agriculture, 19% of national construction, but only 3% of national mining.
The following discussion provides some highlights of current trends and developments in KwaZulu-Natal but is by no means exhaustive of new projects underway.
Agriculture is a major economic and social force in KwaZulu-Natal and the recent drought has taken its toll on the agricultural sector. Although the province covers a small portion of South Africa's land area, a significant percentage of the country's small-scale farmers are based here. The midlands area between Pietermaritzburg and the Drakensberg has a concentration of vegetable, dairy and stock-farms. The coastal belt yields sugar cane, wood, oranges, bananas, mangoes and other tropical fruit.
Forestry in the areas around Vryheid, Eshowe, Richmond, Harding and Ngome is another major source of income. Agriculture is a labourintensive sector, which is especially relevant in a provincial context of high unemployment.
As part of the interventions to revitalise agriculture and agroprocessing, the establishment of agri-parks in all district municipalities is being planned by the provincial government. In order to promote growth, the identification of crops and the creation of opportunities for SMME agribusiness prospects are of importance. In particular, sugarcane and the sugar industries are perceived to have the potential for growth and employment especially in rural areas. The provincial government will partner with Tongaat Hulett Sugar South Africa Limited to support small scale growers in the Felixton, Darnall, Amatikulu and Maidstone milling areas. Over the next three years 3 000 hectares of sugar cane will be planted and estimated 3 381 employments opportunities will be created. The total value of the project is R74 million with a contribution of R51.8 million and the balance (R22.2million) to be funded by Tongaat Hulett who will also provide all technical assistance to the growers.
KwaZulu-Natal's mineral sands and coal mines are a small economic sector, which needs to be grown through increased beneficiation of minerals. Mining contributes less that 2% to KZN's GDP and employs approximately 10,000 people. The industry is concentrated around the mining of coal, titanium dioxide, zircon and other minerals in lesser quantities.
The government is playing a vital role in encouraging the growth of smaller entrepreneurs by offering incentives to large mining companies using services and products of smaller companies at the upstream stages of the value chain. Coal demand from India, and improving US and European growth may also boost the sector. In Amajuba, some old coal mines are being reopened to meet South Africa's power stations' demand for the fuel. This will have a knock on effect of regenerating the economy of this region. Good progress has been to establish beneficiation plants at Ngagane just south of Newcastle and Colenso.
Tronox officially opened its new R3.3-billion Fairbreeze mine situated near Mtunzini, 45 km south-west of Richards Bay in KwaZulu-Natal in 2016. This is the latest mine of the New York Stock Exchange-listed Tronox, headed by chairperson and CEO Tom Casey, who said expansion of Fairbreeze was already being studied, which would involve an additional investment of more than R1-billion. The main product of the mine, is titanium dioxide, most of which will be supplied to Tronox's own US, Dutch and Australian plants producing pigment, an ingredient of paint and plastics.
As part of operation Phakisa, KwaZulu-Natal is also exploring opportunities in the offshore oil and gas industry, with seismic investigation stretching from Port Shepstone to Kosi Bay.
After Gauteng, KwaZulu-Natal's diversified manufacturing sector is the second largest in the country with almost 30% of South Africa's manufactured exports produced in the province. It is estimated that to the size of its economy, KZN's manufacturing sector is the largest of any province, contributing 16% of the provincial economy. The Durban South Basin is a key manufacturing and industrial zone of the city, contributing 30% of Durban's Gross Domestic Product and providing 10% of the country's manufacturing jobs.
The top five manufacturing industries in the Province, in terms of employment, are clothing, textiles and footwear; food and beverages; basic iron and steel and metal products; chemicals and plastic; and paper and publishing. Major players in the KwaZulu-Natal manufacturing include: Unilever, Tongaat-Hulett, Illovo Sugar, Clover, Aspen Pharmacare, Engen, Constantia Afripack and Hulamin to name a few.
KwaZulu-Natal is a significant producer of vehicles and components (Toyota, Volvo, Desmond Equipment, Man). New investments in a variety of manufacturing plants are expected to diversify an already impressive array of production capabilities. As the automotive sector is one of the key sectors in the province, the Provincial Government to support this sector by establishing an Automotive Supplier Park in Durban.
Nestlé South Africa officially inaugurated its instant coffee manufacturing plant in Estcourt earlier this year. The R1.2 billion investment into the expansion of the factory forms part of the company's R2.9 billion foreign direct investment in the last five years.
"Investments of this magnitude demonstrate the Nestlé Group's commitment to long-term business building and the economic development in Africa. For 100 years we have been manufacturing proudly South African products for South Africans by South Africans and contributing to the local economy through job creation and foreign direct investment." said Ravi Pillay, Corporate Affairs Director for Nestlé South Africa.
UThungulu District Municipality has established a renewable energy project using animal waste to produce biogas, which will contribute to addressing the energy crisis and enhance energy diversity. Substantial progress has also been made with proposals for the establishment of an ethanol plant in the Makhathini area, which will contribute to energy needs.
The scenic Umhlanga Ridge area is burgeoning under the rapid development of new hotels, office parks, luxury homes and apartments as well as medical facilities.
Umhlanga Oceans is a Dubai-style mixed-use development consisting of 460 elegantly designed apartments, all with sea views; a world class 33 000m2 shopping mall that brings international super-brands to Durban for the first time and a luxurious 200-room Radisson five-star hotel.
"The Pearls of Umhlanga development has proved to be a major success. With the first four phases (Pearl Reef, Pearl Tides, Pearl Breeze and Pearl Dawn) of the development 100% sold, The Pearls precinct has escalated in value by some 100% since its launch in 2004." says Anant Singh, Director of The Pearls of Umhlanga Development. Due for completion in 2017, Pearl Sky will include 322 upmarket residential apartments, as well as a 14 500m² luxury boutique retail component. In addition to the modern apartments and stunning sea views, this phase will include zen gardens, sun decks, private lap pool, jacuzzi and children's play areas to name a few.
On the north coast Cornubia is a successful collaboration between Tongaat Hulett Developments and eThekwini Municipality, the project is the first fully integrated and sustainable human settlement in the region, once of three National Priority projects in the country. Fully endorsed by Cabinet, it has won several Govan Mbeki Housing Awards for its innovative approach to higher density lower income housing. This mixed income, mixed use development proposes 10 000 private sector led affordable and middle-income units, 15 000 Government subsidised units, 2.5 million m2 of commercial/industrial bulk, as well as a full suite of social facilities. Cornubia has also been identified as a site for the Athletes Village for the 2022 Commonwealth Games.
The Sibaya node has also recently been opened for development. This new development will be made-up of residential units, an office park, hotels, conference and entertainment facilities and social amenities, such as educational institutions and recreational components.
In addition, the Blythedale Beach Development, comprising five diverse residential estates and a catalytic Resort Hotel, creates the most unique and holistic family resort in South Africa.
Of note is that the maritime industry in KwaZulu-Natal straddles numerous sectors (freight and logistics, ancillary maritime support services, tourism and leisure, marine energy, and fishing, aquaculture and mariculture.
Durban boasts the largest and busiest ship repair facility on the South African coast and one of the most efficient in the southern hemisphere. The boat building and repair industry presents opportunities for economic growth and job creation, given its labour intensity, strong backward linkages to industries such as steel manufacturing, as well as skills development.
While utilities contribute 4% to KZN's GDP, its potential contribution is significantly higher.
Currently, the only electricity generated in the province is through two pumped storage facilities, Drakensberg and Ingula, UMzinyathi District Municipality is currently implementing the Greytown Bulk Water Scheme and has identified the Craigieburn Dam as a new source of raw water for Greytown and its neighbouring areas. Raw water will be supplied to the Greytown Water Treatment Works after which treated water will be distributed to Greytown and to various storage supply reservoirs within the local municipality.
The local services industry is the fastest growing sector in the economy, accounting for about 15% of the provincial GDP.
Community and social services sectors, some of which are provided by government and others initiated by communities and NGOs also fall within this category. In addition, these have been the sectors in which significant job creation has taken place in recent years.
Of importance is that many other service activities in our society straddle both the first and second economies.
Transport, Storage and Communication
To be competitive in a global economy one needs to be innovative, creative, able to communicate effectively and move goods efficiently, all of which embrace service activities.
The Durban-Free State-Gauteng logistics and transport corridor forms the backbone of South Africa's freight transportation network and is vital in facilitating economic growth for the country. The main components of the bulk freight corridor consist of the Port of Durban, well established road, rail and pipeline links to Gauteng, and inland freight terminals to service the broader Gauteng area and countries to the north of our border.
To meet the growing demands of a competitive global world, recent flagship projects in the province include the King Shaka International Airport and Dube TradePort, which have been constructed north of the city.
Dube TradeZone, an industrial development zone (IDZ), is a specialist freightorientated export environment and multi-modal logistics platform. It is intended to become home to trade and logistics warehousing, cargo and other airport-related light industrial activities and should attract, manufacturing and service-based enterprises requiring rapid access to air cargo and passenger services.
A few examples of companies which have set up oper-ation in the precinct include Samsung Electronics SA, who have set up a monitor and television manufacturing facility; Amsted Reelin, who are refurbishing train bearings; Yangtze Optics Africa, a fibre optic cable and accessory manufacturer; and the South African brand Retractaline and Laser Junction. In addition to these and other investments, a further R1billion worth of projects is on track to begin construction in the 4th quarter of this financial year and will be completed during the 2017/2018 reporting period.
The Richards Bay Industrial Development Zone (RIBDZ) has completed its master plan to guide the most efficient development and servicing of its existing land parcels and to acquire new strategically located land. This IDZ provides the province with an ideal platform to maximise opportunities related to the ocean economy, manufacturing, beneficiation, as well as new and innovative oil and gas energy options.
The development of the Keystone Light Industrial and Logistics Park on the N2 Corridor between eThekwini and Msunduzi, valued at more than R 6 Billion is now under construction. Mr Price's new primary distribution centre one of the largest and most sophisticated distribution centres in South Africa is located in this precinct.
Currently, an integrated rapid public transport system is under construction in the Durban and Pinetown areas. The project involves road and rail in order to provide for better public transport. The goal of GO!Durban is to have a positive effect on the economic structure of Durban in order to improve tourism, provide additional job opportunities and maintain sustainable development.
The Province is the market leader for domestic tourism in South Africa, as well as is number two in the country term of international tourism. KwaZulu-Natal has great accommodation facilities, excellent beaches, game parks with the big five and splendid mountains. Two World Heritage Sites ��' the iSimangaliso Wetland Park and the uKhahlamba Drakensberg Park are located in the region.
The excellent climate allows many sport and leisure opportunities and a range of business opportunities has grown to meet the demand of these markets. A current provincial strategy focuses on ensuring that world class events are attracted to KwaZulu-Natal, which reinforces our passion for sport, art and culture. The Moses Mabhida Stadium is undeniably a defining landmark of Durban's skyline. The stadium is not only a tourist attraction in its own right, but also the centrepiece of the King's Park Sporting Precinct.
Durban's showcase International Convention Centre Durban is one of eThekwini's most successful economic catalysts. The ICC, Arena and adjacent Durban Exhibition Centre form The Inkosi Albert Luthuli International Convention Complex, which is the core of the region's burgeoning business tourism industry.
Durban's central beachfront upgrade has transformed Durban's renowned beachfront into a feature of which the city can be justly proud. The promenade provides kilometres of uninterrupted sea views, restaurants and other amenities to the benefit of all.
A continual theme is theme is that of developing synergy between the more and less developed sectors of the local economy and between the public and private sectors at provincial, district and local levels.
Public private partnerships between a focused public sector and a booming, confident private sector will deliver the best of both worlds and keep KwaZulu-Natal's economy growing.
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