Radical transformation

The message was loud and clear: building economic growth and creating radical transformation within Gauteng is going to depend heavily on relationships with the private sector. 

Throughout his state of the province address on Monday, Gauteng Premier David Makhura emphasised that the private sector had been critical to the development of not just the economy, but the welfare of Gauteng’s citizens and had already played a significant role in helping the province meet the promises made in his 2014 address.

The province has now been segmented into five corridors: north, west, east, south and Johannesburg city centre. This makes sense, considering the three macro interventions the Gauteng region’s representatives have put in place, namely spatial reconfiguation, the revitalisation of township economies and massive infrastructure investments, jointly with municipalities and the private sector partners. It is believed that these corridors will ensure balanced economic growth, infrastructure development, sustained employment and significant economic empowerment.

Makhura said gone are the days when some regions and municipalities are neglected as “Cinderellas” on the periphery of the provincial economy. “We need deliberate and conscious action by the entire city region leadership to reverse spatial injustice and economic marginalisation.

 â€œThe economy of the central corridor will be consolidated around Johannesburg as the financial capital and hub of the services industry of the continent. Johannesburg has a critical presence of global high-tech and pharmaceutical companies, and we intend to enhance its competitive position with regard to these sectors of our economy.”

Makhura stressed the provincial government’s intention to regenerate the central business district (CBD) of Johannesburg and other areas that have undergone significant de-industrialisation. He invited the private sector to partner with the province through investing in better buildings, cleaning the streets and greening its open spaces.  

“Over the next five years, we will mobilise more than R10-billion in public and private investments in the regeneration of the Johannesburg CBD as the seat of the provincial government,” said Makhura. “Having spoken to private sector leaders, I am confident that there is an appetite and passion to invest in the revitalisation of the CBD. We applaud the banks, mining houses, state-owned enterprises and other major companies that continue to invest in both the CBD and the financial district of Sandton.”

There was strong support for Makhura’s comments on strengthening the position of the central corridor as the financial hub of South Africa and the continent, and particularly for his saying that the province will work with national government and the city to ensure that Johannesburg becomes the home of the Brics (Brazil, Russia, India, China and South Africa) regional development bank — the multilateral bank operated by the Brics states. 

“We are also working with national government and the City of Johannesburg on a definite and concrete plan to revitalise the old townships of Kliptown and Alexandra, both townships being in a terrible state of disrepair.

“We are also working to radically change the spatial landscape of the central corridor through the Masingita, Rietfontein, Waterfall, Modderfontein and Steyn City initiatives.

“Masingita City is an integrated commercial and industrial hub and a R3-billion private investment that will create approximately 10 000 jobs once fully operational. It will also contribute toward township economic revitalisation, by supporting township enterprises and SMMEs in Soweto, Lenasia, Bekkersdal and Randfontein.”

Makhuta described Rietfontein as a mixed-use node with more than 8 000 proposed residential units, including commercial property distribution and warehousing, retail and education facilities. Investment in this development is estimated at R20-billion; it offers the potential to create 17 000 jobs.

“Waterfall City is the largest city to be built in post-apartheid South Africa,” said Makhura. “The estimated investment during construction is R71-billion and an estimated 100 000 jobs could be created by the project.”

Also drawing a round of applause was the statement that the Modderfontein development will inject R84-billion into the Gauteng city region economy and is expected to create 150 000 jobs over the next 20 years. So did the comment that the partnership with the private sector and the City of Johannesburg has resulted in a R6.5-billion injection into Steyn City’s development, including the construction of a new arterial road and infrastructure for basic services, with phase two anticipated to inject in excess of R50-billion into the Gauteng economy. 

The intended radical transformation of the eastern development corridor is no less impressive. For decades, Ekurhuleni was the manufacturing and transport hub during South Africa’s industrial evolution; however, it has experienced dramatic de-industrialisation over the past 20 years.

Twenty-nine industrial initiatives are under way, under the banner of the aerotropolis, to revitalise manufacturing, aviation, transport and logistics industries linked to the OR Tambo International Airport, which Makhura said will dramatically transform the current industrial structure of the Ekurhuleni economy. The footprint of the aerotropolis will also cover the Lanseria and Wonderboom airports, and it affords the potential to attract massive foreign direct investment into the OR Tambo Industrial Development Zone and the Special Economic Zone.

Other unfolding initiatives include the Passenger Rail Industry of South Africa’s (Prasa’s) 7 224 new rolling stock units, with a projected investment of R123-billion over a period of 20 years, and Transnet’s investment in the inland ports of Tambo Springs and Sentrarand. These will also have a major impact with Tambo Springs; an estimated R7.5-billion investment is anticipated over five years and the creation of 110 000 jobs over 15 years.

Knowledge-based economy

The northern corridor is the administrative capital of South Africa and the hub of the automotive industry. It is also the main anchor for research, innovation and the knowledge-based economy in Gauteng. 

“In order to respond to the imperative of inner-city regeneration, provincial government will work with the City of Tshwane to establish the West Capital development project, which will include the development of a student village, sport incubatory centre, retail and commercial components, inner city housing and health facilities,” said Makhura.

“A new Centurion is going to rise. The development of the African Gateway in partnership with the private sector in the heart of Centurion will see the biggest convention centre in South Africa, a massive hotel and commercial and residential developments to create a more resilient economic node in Centurion.” 

Hammanskraal will get the leg-up it desperately needs, with the City of Tshwane to invest R525-million in a business process outsourcing park that will offer on-site training, technical support and incubators for SMMEs.

The automotive industry is also very much on the radar — the Rosslyn cluster is anticipating its second incubation centre to accelerate the development of sustainable SMMEs within the vehicle assembly industry.

Revitalising mining towns

The decline of the mining industry — the primary employer and source of revenue for municipalities — severely impacted the West Rand district. The priority for this corridor is to modernise and diversify the economy and revitalise the mining towns.  

“The economy of the western corridor will focus on green and blue economy initiatives, tourism, agro-processing and logistics,” said Makhura. “The Lanseria airport and Maropeng World Heritage Site will be the main anchors of the new city and new economy, and we are working to unlock the potential of the Lanseria airport logistics hub. Thus far the private sector has injected at least R500-million into the development of the airport; over R10-billion is expected to be invested over the next 15 years. 

“Work is under way to leverage this corridor’s high value horticultural potential to make it the hub of an agri-business and agro-processing industry.

“To ensure food security and stimulate economic activity in the corridor, we have invested in the Randfontein milling facility. We are also partnering with the private sector to upscale the aquaculture potential, in particular, the breeding of prawns. This initiative will create a total of 6 512 jobs in the West Rand over three years.

“We will also invest in light manufacturing industries, working with the University of Johannesburg and other partners on the deployment of solar technologies. The western corridor is an area earmarked for renewable energy industrial development.”

Waterfront developments

A vital focus is to unlock the agricultural potential of Sedibeng and the Vaal triangle, positioning the region as an “agropolis”. 

“Our goal is to shift the economy of this corridor away from its overreliance on the steel industry and diversify to include tourism, entertainment, agro-processing and logistics,” said Makhura. 

The new Vaal River City aims to unlock the potential of the waterfront developments in the Emfuleni and Midvaal areas, with the private sector planning to invest more than R4-billion into this development, estimated to be worth up to R11-billion. This corridor also hosts the R40-billion Gauteng Highlands mixed-use development comprising industrial and residential space, hoped to create 25 000 direct and indirect jobs. 

The province and private sector are supporting 32 black farmers who produce barley and maize for the Heineken Brewery — a project anticipated to create 1 000 permanent jobs a year over three years. 

“The cumulative effect and combined impact of all the aforementioned public and private sector investments will be the creation of new cities and mega economic nodes that will change the economy and space of all corridors,” said Makhura.

Development corridors reconfigure space

The Gauteng City Region’s space and economy has been reconfigured along five development corridors, with distinct industries and different comparative advantages:

– The central development corridor is anchored around the City of Johannesburg as the hub of finance, services, information and communication technologies and pharmaceutical industries;

– The eastern development corridor covers the economy of the Ekurhuleni Metro as the hub of manufacturing, logistics and transport industries; 

– The northern development corridor includes Tshwane as the nation’s administrative capital city and the hub of the automotive sector, research, development and a knowledge-based economy; 

– The western development corridor covers the West Rand district, desperate for the creation of new industries, new economic nodes and new cities to replace the declining mining sector; and 

– The southern development corridor encompasses the economy of the Vaal triangle and Sedibeng district.