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Eastern Cape hooks into SA's ocean economy

14 January 2015

With its 800km of coastline, South Africa's Eastern Cape is set to become South Africa's leading hub of maritime economic activity.

The province is home to the two major port cities of Port Elizabeth and East London, both established industrial manufacturing coastal centres, giving the Eastern Cape several strategic competitive advantages, says Mfundo Piti, the economic infrastructure development manager of the Coega Development Corporation (CDC).

The South African government announced in October 2014 that it would be implementing ocean economy projects, which it expected to contribute more than R20- billion to the country's gross domestic product by 2019.

These projects form part of the government's National Development Plan, its economic blueprint that aims to promote economic growth and job creation.

South Africa's oceans have the potential to contribute up to R177-billion to the GDP and create over one million jobs by 2033, two decades from now, the government said.

Unlocking the ocean economy – part of Operation Phakisa, which aims to fast track transformation – has four priority areas:

• marine transport and manufacturing;
• offshore oil and gas exploration:
• aquaculture; as well as
• marine protection services and ocean governance.

"A thriving maritime sector will shift the Eastern Cape into an era of prosperity," Piti says. "The momentum displayed so far by the local private-state nexus shows a strong capacity and desire to further tap the potential of a sector that has largely shaped the history of these two cities."

Ports have always been at the forefront of maritime economic organisation, catalysing economic growth through the trade of manufactured goods, commodities and raw materials. They have helped transform underdeveloped regions into important trade centres which, in turn, has created jobs.

"As both entry and exit points, the two ports have been critical in the past, present and future of the province and indeed the country," Piti says.

Nelson Mandela Bay's Port of Ngqura, a deep-water sea port is adjacent to the Coega Industrial Development Zone (IDZ) It is becoming the fastest growing terminal in the world, according to Drewry Maritime Research quoted by the CDC.

The South African government has partnered with South Korea to establish a national shipping company.

"World sea traffic passes by the Eastern Cape on the East-West pendulum trade routes, opening up major opportunities for ship-building and repairs in the region," Piti says.

Ship building and repairs

The world merchant fleet in 2013 comprised 106 833 vessels responsible for shipping goods and commodities between the continents, including visits to the three ports of the Eastern Cape.

During 2013, around 5 944 container ships, vessels and tankers were commissioned for construction by various countries. This represents an opportunity for the Eastern Cape to become a marine industrial centre for shipbuilding and repairs, Piti says.

While South Africa's ship-building industry holds international credibility through its shipyards in Cape Town and Richards Bay, the Eastern Cape's "world-class industrial manufacturing economy will make the province an excellent contender for future shipbuilding activities in the oceans economy", Piti maintains.

Nelson Mandela Bay and East London dominate South Africa's automotive industry which means the province is already home to the necessary expertise, skilled labour, logistic services, Piti says.

"But there's more that can be done," he says. "The expertise of the industrial base should not only be extended for the ship-building industries but need to be extended further" – augmented by aeronautical components manufacturing, for example.

Food security

"Marine food resources are depleting at devastating rates," Piti says. "Between 60 and 70% of the world's fish species are exhausted. And, with one out of every five individuals on this planet relying on ocean food as sources of protein, we are on the brink of food security crisis."

The CDC plans to establish a R2-billion aqua-farming facility at Coega. Marine animals and plants such as finfish, abalone and seaweed will be farmed on 300 hectares in the Coega IDZ, creating 5 000 jobs.

• Read more: Coege to develop R2bn aqua-farming facility

Nelson Mandela Metropolitan University (NMMU) in Port Elizabeth will be playing a critical role in knowledge generation for maritime and marine industries, Piti says. The university formalised ties with the UN-endorsed World Maritime University (WMU) in Sweden in 2013.

"NMMU is already making critical research contributions that will enhance the competitiveness of the region in environmental sustainable ways. Several African countries attended NMMU's African Maritime Domain Conference [in November 2013] to develop responsible governance policies," Piti says.

Marine tourism

Cruise vacations offers Eastern Cape Tourism many opportunities to promote the province, Piti maintains. "We – or tour operators – should consider further partnering with cruise line operators and ground handlers to build on the current tourism offerings. It is an opportunity that has not yet been fully maximised to increase the much needed tourism spend in the Eastern Cape."

Demand for the ocean cruises increased by 77% over the past decade, Piti says. The majority of passengers are American, followed by travellers from Europe.

"Our province is one of the most diverse and spectacular tourism destinations in South Africa, including rich cultural diversity, Big Five game reserves, stunning landscapes and, of course, a beautiful coastline with blue-flag beaches.

"We are also home to one of the first-ever Big Seven game reserves – Addo Elephant National Park – which integrates the Big Five with marine life to include the Great White shark and Southern Right whale."

Port Elizabeth is South Africa's water sports capital, home to major water sports event – including the only international Ironman event on the African continent.

SAinfo reporter