Saldanha Bay Municipality: Boosting the Local Economy

For many of South Africa’s regions, finding the best way to extract the best advantages from natural resources remains a major challenge but a big opportunity for social and economic development.

On the West Coast, Saldanha Bay Municipality faces such questions and is developing a plan for exciting development.

Saldanha Bay Municipality is a local municipality located on the West Coast of South Africa, approximately 140 kilometres north of Cape Town. It forms part of the West Coast District Municipality (DC1), situated in the Western Cape Province. The municipality is bordered in the west by the Atlantic Ocean, in the north by the Bergrivier Municipality and the east by the Swartland Municipality.

bb6f2f14f86a33d6b4397a071d5a00f3.400x266The Saldanha Bay Municipality covers an area of 2,015 square kilometres and enjoys 238 kilometres of coastline. It also boasts the largest natural port in Africa and the area is earmarked as a regional motor for the development of the Western Cape Province.

The local government is head quartered in Vredenburg and operates satellite offices in Hopefield, St Helena Bay, Paternoster, Saldanha and Langebaan.

The challenge for the Municipality is identical to that faced by compatriots across South Africa and in the case of Saldanha Bay there is a clear Vision, formulated in 2003:

“It is the vision of the municipality to make this a preferred area of choice to live in, to do business in as well as for recreation. We want to be a leading municipality in the provision of quality service at an affordable price, a place where all have access to development opportunities, where the riches of the land and sea are utilised in a sustainable manner. We strive to reach the 3 objectives of sustainable development, namely human welfare, economic success and ecological responsibility.”

The Municipality’s website expands on this theme: “Over the last few years local economic development has become one of the most important functions of local government. The Municipality’s vision summarises the challenge induced by poverty and emphasises the important role of the local government to eradicate poverty by means of local economic development.”

One of the major potential revenue streams for the region is the opportunity to develop a buoyant tourism industry. The Municipality appointed Seaton Thomson and Associates to research and conceptualise a Tourism Development Strategy (TDS), in accordance with the recommendations and objectives as detailed in Local Economic Development (LED) Plan as developed by Urban Econ.

“This project was identified as part of the enabling projects as contained in that particular LED strategy. These proposed initiatives are of substantial importance to unlock further growth/development of the Saldanha Bay Municipal area. A lot has already been done in the area to market and promote the tourism activities and the surrounding areas, but a tourism development strategy is of critical importance to identify development initiatives for the community of this particular area,” states the website.

Other potentially lucrative sectors for the region include the oil and gas industry, steel fabrication and aquaculture; together with the tourism opportunities these areas are referred to as “sunrise” and labour intensive sectors.

The Saldanha Bay Municipality site underlines that competition in these sectors will also be fierce and will come from within South Africa; from Cape Town and Durban and potentially Richards Bay.

“Internationally the key players are likely to be Luderitz, Luanda and Lagos on the west coast and Maputo on the east coast.

“It is noted that these countries all possess similar comparative advantages, It can also be convincingly argued that Saldanha has a distinct competitive edge due to its superior natural and deep-water harbour, its existing steel production capability, its proximity to Cape Town and the abundance of available land for expansion.”

Undoubtedly one of the key initiatives undertaken by the Municipality in recent years has been to align with the South African Industrial Development Zone Programme which is part of national government’s strategy to position the country within the global economy. The aim is to encourage international competitiveness and sustainable economic growth through strategic investments in export manufacturing industries in the Saldanha Bay municipal area.

The Industrial Development Zones (IDZs) are purpose-built industrial estates, linked to an international port or airport, which have been specifically designated for new investment by export oriented industries and related services.

The IDZ in Saldanha Bay is seen as a potential catalyst to expand the potential of the harbour and launch the Oil and Gas services cluster.

President Jacob Zuma officially launched the Saldanha Bay Industrial Development Zone in November 2014.

The new IDZ is expected to give a major boost to the country’s industrialisation and job creation drives, while attracting both local and foreign direct investment into the country.

“Our objective is to develop the Saldanha-Northern Cape linked region in an integrated manner through rail and port expansion as well as back-of-port industrial capacity,” Zuma said during the launch.

“Our strategy is also aimed at strengthening the maritime support capacity to create economic opportunities from the gas and oil mining activities along the African west coast, as well as the expansion of iron ore mining production and beneficiation in the Northern Cape.”

Trade and Industry Minister Rob Davies added that a feasibility study had shown that the Saldanha Bay IDZ could potentially contribute 86 per cent to the gross geographic product of the Western Cape and create in the region of 12,000 new jobs.

“Additionally, the Saldanha Bay IDZ is likely to attract foreign direct investment worth approximately R9.3 billion over 25 years”, Davies said.

Zuma further outlined the significance of Saldanha bay’s IDZ initiative: “It is estimated that overall direct and indirect employment creation will be around 25 000 over a period of 20 years. It is expected to generate around R62-billion in foreign exchange. We are determined to turn these forecasts into reality,” he stated.

In January 2014, it was announced that the IDA was already attracting strong international interest, with several lease agreements signed and a surge of global oil and gas companies negotiating joint ventures with South African firms.

Western Cape Minister of Finance, Economic Development and Tourism Alan Winde confirmed the excellent early progress of the project:

“The Saldanha Bay IDZ licensing company has signed six lease agreements with international and South African oil and gas companies. These include firms specialising in oilfield services, oil rig operations, logistics, ship repair, engineering and market support,” noted Winde.

“In some of the most exciting developments, the licensing company is in talks with an international consortium to develop a rig module building facility. We are also aware of a R200 million investment by a global oil servicing company which is set to create 300 jobs. Several leading international companies are increasing their staff numbers in their South African companies,” added Winde.

“This is the culmination of years of collaboration between all spheres of government and the Saldanha Bay community. The IDZ has the potential to become one of the most important levers for jobs and economic growth for the Western Cape. Early indications are that it will indeed be a major catalyst for foreign direct investment and increased employment opportunities for our residents in the medium to long term,” he concluded.