Lynda Loxton
THE Western Cape is relying on several “mega-projects” to help it cope with the expected national economic downturn and still maintain its growth edge over other provinces.
Minister of Economic Affairs Chris Nissen told a conference on regional economic prospects this week it was “rather pleasant” to be in a province with above-average growth. But it had to be aware of the “harsh realities” facing the country as a whole and the need to ensure sustainable growth.
Wesgro economist Wolfgang Thomas said this meant that the Western Cape had to get to grips with the new environment characterised by government spending cuts, trade liberalisation and the need to restructure broad sectors of the economy to make them more competitive.
The Western Cape hoped to soften the inevitable pain this would inflict on the economy by launching several mega-projects to promote job creation and stimulate economic activity to offset the expected downswing in consumer demand.
Although the Western Cape was still expected to beat national average growth of about 3% of gross domestic product this year by clocking up 3,6% to 4,2%, a slowdown was expected next year in line with the national average.
Both Nissen and Thomas warned against complacency about the ability of the Western Cape to beat national growth levels. Unexpected hiccups such as the recent floods on the south-eastern part of the province could, for example, prove to be a major setback.
The mega-projects the Western Cape is banking on include the R6,8-billion Saldanha Steel project now under way, infrastructural projects in anticipation of the bid for the 2004 Olympic Games, extensions to Mossgas, the expansion of Cape Town’s airport and harbour, the redevelopment of District Six, the multi-million rand Capricorn science park and a planned R500-million convention centre.
Chairman of Cape Town’s economic development and property committee Hanief Tiseker said a site in Sea Point near the Victoria & Alfred Waterfront had been identified as the best possible site for the centre. It would have to be financed through a joint venture with the private sector.
Tourism has emerged as the big growth sector in the Western Cape but Tiseker warned that a great deal would have to be done to jack up the availability of accommodation and international flights at peak periods as well as service levels.
He said there were plans to increase the number of hotels to 115 from 100 between now and 1998. The number of rooms would be increased by 41% to 9 202 from 6 520.
Thomas said tangible development projects under way included the provision of housing and extensions to the V&A Waterfront. Although several other mega-projects were “being talked about … one of the challenges facing us is that we must move more of those projects from the talking phase to the actual implementation phase”.
He said a major problem with measuring growth in the Western Cape was the lack of reliable, disaggregated data for the province.