A province with potential – KZN’s positive outlook

Resilience, confidence, wellbeing – these are terms we use to describe the human state of mind, but they apply just as much in a business sense. Companies and organisations, just like human beings, need these qualities to grow, thrive and deal with the setbacks that come their way.

As a region, KwaZulu-Natal (KZN) knows this all too well. Its people, businesses and civil society organisations have had to cope with more than its fair share of challenges in recent years. From events such as the Covid-19 lockdowns to the civil unrest of July 2021, the floods of April 2022 and the closure of beaches because of sewage spillages, to ongoing infrastructure issues affecting the key rail and harbour sectors that are crucial for South Africa’s imports and exports.

Pessimism might seem to be the natural default position when it comes to one of South Africa’s most important economic hubs, but that would be to underestimate the spirit of the people and businesses in the region.

That spirit was in abundance at a recent business breakfast and panel discussion organised by Investec, which brought together business leaders from the province. The panel included Nigel Ward (executive vice president of Manufacturing and Support at Toyota South Africa), Simon Downes (chair and owner of the Shave and Gibson, a leading supplier of carton board packaging and security printing products in South Africa) and Neo Ralefeta (consultant, Investec Treasury Sales and Structuring). 

Resilience and confidence were the two areas highlighted by the speakers. Ward spoke of the impact of the events of the last few years on the people and businesses in the region.

“If I join the events together (of the last few years), what they did was to make us more resilient and bring us together,” said Ward. “The crises have made us stronger, because each one has given us a different perspective (for meeting the next challenge).”

Downes added, “We’ve learned that there’s no ‘white knight’ to rescue us. So we have to be resilient and have strong relationships (with our partners).”

While resilience is key for overcoming challenges, it’s confidence that drives investment and expansion. However, as Ward noted, confidence can only take hold if people and businesses know about the good work being done.

Ward explained that joint national initiatives between business organisations (represented by 150 CEOs) and government can tackle three key areas of concern, including energy security, logistics as well as safety and security.

“They’re doing great work in these three areas, but their work isn’t well-known enough,” Ward states. “From what I’ve seen, there’s a lot of reason for hope. I’m positive about what’s happening with the ports and with the tackling of the energy crisis – they will turn around – but not many people know about it. So between the public and private sector, they need to start informing people here in KZN and create that positive energy.”

Positive developments to build on

Amid the doom and gloom, there have also been some positive developments. One was the recent decision to award the management of Durban Container Terminal Pier 2 to ICTSI, a Filipino company, for 25 years. Downes says the projections are that capacity will be increased from the current 1.7 million 20-foot equivalent units (TEUs) to 2.9m TEUs, in just two years.

“This development is going to revolutionise Durban and our transport,” said Downes. “This is private-public partnerships in play. And it’s just the beginning.”

Another was the announcement by Club Med to build a R2bn beach resort on the North Coast, scheduled to open in 2026. Downes added that this was a development set to revolutionise tourism in the province.

The improvement in electricity stability was also a positive, noted Ralefeta. “This is attributable to technical expertise having been brought on board to assist Eskom.” Downes agreed, adding that he believed the loadshedding problem will be resolved by late next year.

Ward stressed the importance of recognising the small things that can be done, even as the major issues are tackled. “After the floods, we formed small partnerships with businesses to deal with issues like water, power and security, but the circle is now widening. The lesson was to start your own collaborations in your areas of influence. This helps to change the mindset and develops into something bigger.”

Unlocking the region’s potential

Statistics confirm the importance of the province, accounting for 16% of South Africa’s GDP (Gauteng is about 34%). And, it has managed to record better growth than the country as a whole (1.1% over the last year vs 0.6% nationally).

As Ralefeta notes however, it continues to suffer from high unemployment, particularly youth unemployment and underemployment. “If I could change one thing, it would be to look at labour policy and regulation, to help businesses deal with the cycle and employ more people.”

Ward also cited red tape as a disincentive to setting up business. “We are not a business-friendly province,” he said. Downes agreed, noting that policy continuity was vital for success and shouldn’t be a ‘moving target’.

Corruption and crime were also areas that needed to be addressed, said the panellists, because these were things that affected all – from individuals to micro, small and large businesses.

Ward added that crime and safety are also affecting the ability to attract and retain the best people. “Skills are leaving the province and they are all saying it’s a safety and security issue. We must change the narrative and make it a positive one.”