City of Johannesburg Metropolitan Municipality: Building a sustainable economy on a bedrock of integrity

Johannesburg is not only the financial and commercial heart of South Africa, but also represents one of the most powerful economic centres on the African Continent. Covering an area of over 1,644 square kilometres, the Metropolitan area is the most densely populated and urbanised municipality in South Africa, home to over 3.8 million people. That puts an enormous onus on the City of Johannesburg Metropolitan Municipality.

Available data suggests that the economy of Johannesburg has grown by more than 5 per cent per year since 2001, with a number of sectors helping to stimulate this growth.

According to reports, construction has played an important role, with growth in excess of 19 per cent per year, while finance and business services, which have been identified as the largest contributors to economic value, have been growing at over 9 per cent.

Johannesburg is one of the youngest major cities in the world and was founded in October 1886. The city today generates 16 per cent of South Africa’s GDP and employs 12 per cent of the national workforce.

The City of Johannesburg is home to the Johannesburg Stock Exchange and accounts for about 17 per cent of the national output and employment as well as 48 per cent of the Provincial output.

The most important economic sectors are the finance and business services, manufacturing, wholesale and retail trade and community and personal services.

Construction has enjoyed growth within the confines of the Johannesburg Metropolitan Municipality with a number of major projects completed in recent years.

One of the most recent developments, and amongst the most symbolic, is the R38-million Nelson Mandela Bridge, which has emerged as a landmark in the Gauteng province.

The 284-metre long bridge crosses over 42 operational railway lines in linking Braamfontein and the north of Johannesburg to Newtown in the heart of the city’s central business district, and is the centrepiece of a R300 million inner city renewal project driven by the province’s economic development initiative, Blue IQ.

Other relatively recent projects have included the first phase of the Mary Fitzgerald Square, situated in the Newtown Cultural Precinct, and the Metro Mall, a multi-modal transport and retail centre catering for 150 000 daily commuters. Work is under way on the construction of new on- and off-ramps from the M1 highway, to give direct access to Newtown for motorists from the north and south of the city.

The City of Johannesburg has set aside R1-billion for more than 170 projects to upgrade and rejuvenate the inner city and the previously disadvantaged areas.

The lack of appropriate skills in the labour force to meet the needs of industry and business is a serious impediment to economic growth. Poor educational standards in mathematics and science make it difficult to supply industry with these important skills, and people have not been educated to develop the kind of skills and insight that business needs.

The City has established a framework for its future, through an initiative known as Joburg 2040, which sets out a growth and development strategy.

The goals set out by Joburg 2040 are: Improved quality of life and development-driven resilience for all; to provide a resilient, liveable, sustainable urban environment – underpinned by infrastructure supportive of a low-carbon economy; an inclusive, job-intensive, resilient and competitive economy that harnesses the potential of citizens; a high performing metropolitan government that pro-actively contributes to and builds a sustainable, socially inclusive, locally integrated and globally competitive Gauteng City Region.

The Joburg 2040 GDS responds to the multiple challenges and uncertain futures faced by the city. To cope with change, the City of Johannesburg aims to strengthen the adaptive capacity of the City and its citizens, so that it may become more resilient to potential and unpredictable futures. Rather than develop a blueprint plan for the future, the Joburg 2040 GDS lays the foundation for multi-level, multi-scalar and integrated responses to the challenges the city faces.

In January of this year, the new Mayor Herman Mashaba, indicated the importance of inner city rejuvenation in the context of Johannesburg’s economy.

In order to revitalise Joburg’s inner city and create jobs, the Urban Development Zone (UDZ) tax incentive remains a key element, a recent article in the Ranburg Sun indicated.

“The incentive is attractive to investors because it reduces their taxability by 20 per cent depreciation of inner city property development costs annually for five years, instead of the normal property depreciation of 5%,” said Lebo Ramoreboli, the City’s deputy director for integrated regional economic development.

The tax incentive has already motivated private investment, he said, and has had an economically dramatic impact on the revitalisation of the inner city. “Its visible success is manifested in the creation of themed districts such as Maboneng, Fox Street, Main Street, Braamfontein and Newtown.

“The investment has also gone towards the rehabilitation of sectional title units, expansion and construction of diversified mixed-use indices through conversion of commercial premises into residential quarters.”

The change of regime at the City of Johannesburg is starting to see a number of new initiatives, aimed at building confidence and transparency.

In January 2017 the City passed a landmark amendment to the Supply Chain Management Policy, finally opening the way for a transparent tender procurement system.

For the first time in the City’s history, members of the public will be able to attend the tender adjudication hearings in what has been hailed as a victory against the culture of corruption.

For decades, decisions regarding the tender procurement process have been shrouded in secrecy; benefiting the elite of the previous administrations and their cronies at the expense of service delivery and the residents of this City.

As from February, the Tender Adjudication Committee will now admit members of the public directly into their proceedings. These proceedings are a crucial stage at which a tender is assessed and adjudicated on its merits and awarded to the applicant best suited for the job.

The City of Johannesburg administration is working hard to develop a sound platform for economic development based on integrity.