Africa has some of the most rapidly expanding economies globally, many of which are fuelled by vast oil and gas resources. Together, African countries contribute 11% of crude oil and 6% of gas globally, and new fields are being discovered across Africa like a recent find in Mozambique which ‘could be one of the most important natural gas fields discovered in the last 10 years’. Currently, 120 oil rigs pass Cape Town annually generating R200m every time one is refurbished and the Western Cape and specifically Saldanha Bay Industrial Development Zone (SBIDZ) is well positioned to reap significant rewards from this rig repair.
The Saldanha IDZ is a 126-hectare zone with the deepest natural port in the southern hemisphere. It is a designated oil and gas, marine repair engineering and logistics services complex offering firms the SBIDZ’s 15% corporate tax rate and ‘ease of doing business’ benefits. To date, eighteen companies – nine local and nine foreign – have signed non-binding expressions of interest with the Western Cape’s Trade and Promotions Agency (Wesgro) who wholly own the SBIDZ Licencing Company Pty (Ltd.). Instrumental partners helping to establish the SBIDZ include national and provincial government departments, the Saldanha Bay Municipality, the South African Revenue Service, Wesgro and Transnet National Ports Authority.
A noteworthy aligned project by the Western Cape government’s Cape Catalyst team has determined that Ankerlig Power Station in Atlantis could help meet increased demand if the station is converted to a gas-fired facility. Other areas to be addressed through collaboration include the availability of relevant skills and further infrastructure requirements – also to support potentially swelling informal settlements. Job expectations generated by Saldanha Steel, which created 2 500 jobs, caused an influx of job seekers to raise unemployment in the area. Sustainable growth is needed, which is why the current projections – that the SBIDZ will make a R28.7bn cumulative contribution to Western Cape economy, and create 14,922 jobs, by year five – are encouraging.
The SBIDZ currently enjoys a unique window of opportunity as it is ahead of its competitors, including Nampak and its related initiatives in Walvis Bay. Continued collaboration and swift action by all SBIDZ stakeholders will be the key with which to unlock its full potential. The sustained growth of the West Coast and, ultimately, the provincial economy, depends on it.
This article by Chris Whelan featured in the Cape Argus and Cape Times print editions and Finweek: INSIGHT: Call to monetise Saldanha Bay IDZ
Read more about our Thought Leaders event on the Growth of the Saldanha Bay IDZ and the West Coast Economy held on 27 June 2014.