/ 18 February 2016

Government’s ambitious plan to build an ocean economy

Experts caution that the rollout of Operation Phakisa has to be well thought out
Experts caution that the rollout of Operation Phakisa has to be well thought out

South Africa’s economy is almost stagnant. The manufacturing and resource sector is in crisis and agriculture is being hammered by an extended drought. A hail Mary pass is urgently needed – a big dream that can be practically implemented.

Government says this is Operation Phakisa. Launched two years ago, the crash course in building an ocean economy has started to yield some low-hanging fruit. It is projected to add R177-billion a year to the country’s gross domestic product by 2033 – and single-handedly bump up national growth by 4% by 2019, according to President Jacob Zuma.

Research by the Nelson Mandela Metropolitan University says an ocean economy could create 316 000 jobs – government thinks it could create a million. Phakisa got a mention in this year’s State of the Nation address and has been quietly building up its portfolio of projects.

“It is very ambitious, especially in light of the fact that South Africa has been historically blind to the ocean bordering it on three sides,” says Timothy Walker, a maritime specialist at the Institute for Security Studies in Pretoria. “You are trying to create a whole new way of thinking about the ocean in a short space of time.”

That has to overcome centuries of inward thinking, he says. “Because we’ve started on the back foot, there are established industries in aquaculture and in shipbuilding. So for South Africa it’s going to be very expensive to catch up.” Until now, there has only ever been a token acceptance of the oceans as paths to import and export goods, he says. “It’s an exciting moment, if South Africa seizes it. We just need sense to win in the clash between politics and economics.”

Phakisa – hurry up in Sesotho – owes its origins to a 2011 visit to Singapore by Zuma. In an attempt to industrialise rapidly, that country started schemes called “Big Fast Results”. These create a detailed plan of priority programmes and then put all the required resources behind getting there.

Prior to Zuma’s visit, South Africa’s oceans were shared by all manner of departments – environment looked after their health, fisheries promoted the interests of fishing groups, trade and industry examined how to industrialise resources under the waves.

The competition meant no one group had a holistic plan – with the only mention of grand goals coming in the National Development Plan, rapidly gathering dust on the stack of shelved government dreams.

The new initiative changed this, making the environmental affairs department the lead actor. Its 2012 white paper on ocean governance paved the way for the 2014 launch of Phakisa. Dozens of workshops then followed, bringing people from all sectors together to discuss the best way to harness the economic potential of South Africa’s oceans.

These created five focus areas for Phakisa, which have since been nudged in the direction of different government departments: marine transport, marine manufacturing, aquaculture, offshore oil and gas, and marine protection and governance.

These focal areas are then broken down into smaller initiatives. So the marine transport hub includes targets such as establishing “purpose-built oil and gas port infrastructure” at Mossgas, and supporting the “local registry of vessels”. Each of these comes with a progress indicator on the Phakisa dashboard and many are on their way to completion.

The announcement that three vessels now fly the South African flag – for 30 years the country had no locally registered vessels – received sustained applause during Zuma’s State of the Nation address last week. Ships flying the South African flag means tax income on the goods they carry. 

A few days before this, the environmental affairs department announced that it was creating 22 new Marine Protected Areas – increasing the area of South Africa’s oceans under formal protection from 0.7% to 5%. It says this move would stop prospecting in the areas, and ensure that fish stocks are sustainably managed.

No leeway for mistakes 
Professor Nadine Strydom, an associate professor in the Department of Zoology at the Nelson Mandela Metropolitan University, says the inclusive nature of Phakisa means the plans include a wide range of thinking.

This is critical given the current problems faced by South Africa’s ocean ecosystems, she says. “At the moment our fish are in dire straits.”

That means the rollout of Phakisa has to be well thought out, she says, preaching caution.

“Wherever there is pressure to make money off the ocean, we need to make sure we are sensitive to the renewability of resources.”

The problem with a pre-Phakisa world is that people know too little about fish – and the country’s oceans – to manage them properly, she says. “We already have huge problems with overfishing and a lack of law enforcement.”

That makes industrial options – such as fish farms – a good choice, but even then any Phakisa initiative has to be managed to ensure economic decisions are not made in the stead of environmentally-sound thinking, she says.

Because the existing renewable ocean resources are already collapsing, she says there is little leeway for making mistakes. “We are harvesting to the maximum already, so there aren’t many resources to go around anymore.”

A rising industrial tide

Marine manufacturing: This sector suffers from the same malaise as other manufacturing hubs in South Africa, with infrastructure being allowed to degrade over time and no new investment. Lack of maintenance – and new investment – has seen South Africa slip behind others in their technology and ability to build modern vessels. Only 1 500 vessels a year undergo maintenance at local facilities, and a mere handful – small patrol and utility vessels, such as harbour tugs – are built each year. As part of Phakisa, government has given an implicit guarantee that it will buy vessels from local shipyards.

Marine transport: South Africa has 30 000 vessels steaming through its territorial waters each year, with 13 000 docking at its ports. Until recently, none of these carried a South African flag – for 30 years the country was unable to compete with small countries offering flags of convenience, which allow vessels to pay lower taxes and pay workers less than what would be the local minimum wage. 

Offshore oil and gas: The mineral resources department has started accepting a wide range of prospecting applications for undersea mining. Much of this is controversial – such as strip mining for phosphorous – and has drawn concerns from civil society about the impact on marine ecosystems. Phakisa’s goal is to have 30 exploration wells drilled in a decade, so that 370–000 barrels of oil and gas can be produced each day. State utility PetroSA is heavily involved in this initiative. 

Marine protection and governance: Twenty-two new marine protected areas have been declared, and Phakisa’s goal is to formalise the management of the country’s ocean and exclusive economic zone. Pan-African plans are also being implemented to ensure co-operation in the management of the continent’s 50 000km of coastline. The African Union recently passed its Agenda 2063, which includes a major focus on exploiting the ocean economy – taking examples from Phakisa on how to monetise the ocean. 

Aquaculture: Fish is not a big component of the wider South African diet, but speciality fish are a big potential export market. Poaching of abalone and other species brings in hundreds of millions of rands for the black market. Phakisa instead seeks to formalise aquaculture, with programmes such as sea cages for salmon and catfish farms in Ventersdorp.