Nelson Mandela Bay - The Next Big Thing

22 September 2014

If you've ever taken a road trip along the N2 through the Eastern Cape, you will know just how incredibly beautiful this province is. Hundreds of kilometers of pristine coastline, interrupted by spectacular river mouths, met by rolling, green hills. It's a breathtaking part of the world, and it's hard to imagine that anyone would ever want to leave.

And yet many do.

More people leave the Eastern Cape each year than any other province. Between 2006 and 2011, more than a quarter of a million people quit the Eastern Cape for other provinces. While the rest of the country's population is growing, the Eastern Cape has seen a net loss of almost 280 000 people for the ten years from 2001 to 2011. And this trend is accelerating.

There's one primary reason that they're leaving, and that's jobs. At 44,4%, the Eastern Cape has the highest expanded or "broad" unemployment rate in South Africa - way above the national rate of 35,6%. (In the Western Cape this is 25,4%).

Economists have warned that this brain drain does not bode well for the region's economic prospects. Cities that lose people to migration, end up losing out on investment too, which leads to further job losses, more migration and so the cycle continues.

If this is to be halted, the lead must come from the hub that drives the province's economy.

With 44% of the Provincial GRP, Nelson Mandela Bay Metro is the beating economic heart of the Eastern Cape. The metro comprises the city of Port Elizabeth, the towns of Uitenhage and Despatch and the surrounding rural areas. Importantly, it also includes the Coega Industrial Development Zone (IDZ) - a 110 square kilometer industrial complex - as well as the adjacent Ngqura deep water port.

Envisaged to turn Port Elizabeth into a manufacturing and export hub and transform the region's economy, the multi-billion Rand Coega development has yet to deliver on its promise. For years now there's been a steady trickle of reports of new investment, but none of these is the big anchor tenant - the employer of thousands.

Despite the Coega IDZ and the harbour; despite a good network of highways, rail and air transport; despite its enormous potential as a tourist destination, Nelson Mandela Bay Metro has a broad unemployment rate of nearly 37%. 

Here is a city that has almost everything it needs to really take off, and yet more than a third of its adult population is jobless. I say "almost everything" because the one thing that is lacking is probably the biggest maker or breaker of investment decisions - and that is good, clean, stable governance.

The metro is on its third mayor in five years. It's taken three years to fill the positions of Executive Directors. The City Manager - the highly capable and head-hunted Lindiwe Msengana-Ndlela - quit her job last year after only five months because of unbearable political interference from the executive mayor and deputy mayor. Not only was she pressured to manipulate tender and appointment processes, but the mayor even went as far as making veiled, sinister threats of "...violence and the ultimate price that is paid by those who do not submit to majority rule". 

It is time voters learnt that voting for a government with a track record of corruption is interpreted by that government as voter endorsement of corruption.

Unsurprisingly, Msengana-Ndlela wasn't prepared to work under those circumstances, and left the City. The wrong person left.

Equally unsurprising is the lack of large investments in the region. This political manipulation of state institutions, and the resultant instability is precisely what drives big corporations away from Nelson Mandela Bay Metro. More than anything else, potential investors want stability, policy clarity, fair rules and predictability.

What they also want - particularly if they're in the industrial or manufacturing sectors - is a steady supply of affordable electricity. And this is not what they get. Electricity in Nelson Mandela Bay is amongst the country's most expensive, and there are no guarantees to potential investors that their demands can be met.

The cost and capacity of electricity supply is precisely what cost Coega its largest investor, when Rio Tinto scrapped its plans to build a $2,7 billion aluminium smelter, deciding instead to locate it in Canada. This was a tragedy for the Eastern Cape and South Africa.

The constant litigation between the largest energy consumers in the region and the municipality over the public participation process, and the way in which budgets and tariffs are decided, is testament to the hostile business environment.

The ANC-led municipality doesn't seem to grasp that, in order to create jobs, government must create a business-friendly environment.  

The local "tri-partite alliance" in the Metro is still hostage to the outdated and fallacious notion that that being "pro-business" means being "anti-poor". The truth is quite different. Investment drives job creation, which is essential to lift people out of poverty. Bad governance drives away investment, making poor people poorer.

The Metro has a R4 billion infrastructure backlog.

Five years and more than R1 billion later, there is still no sign on the roads of the city's Integrated Public Transport System (IPTS) buses. The project is so riddled with evidence of large-scale fraud and corruption that the DA has called for an immediate forensic investigation.

The annual Auditor General Report on local governments gives a pretty good indication of whether a municipality is fit to govern. In the most recent report, Nelson Mandela Bay Metro once again received qualified opinions with findings (Cape Town was the only Metro with a clean audit).

In the same report, Nelson Mandela Bay recorded an incredible R935 million in irregular expenditure - almost twice the shocking R554 million of the previous year. Nothing sets off the alarm bells for investors like a local government that can't look after its money.

But it's not only the potential investors that take note of these things. Ordinary voters have run out of patience too.

The DA's growth in Nelson Mandela Bay in recent Local Government, as well as National and Provincial Elections, gives us the inside track to take control of the municipality in 2016.

Between 2006 and 2014, the ANC's support in the metro dropped from 67% to 49%. During the same period, support for the DA climbed from 25% to 40%. You don't need a graph to see where this is going. Along with Tshwane (49%), there are now two metros other than Cape Town where the ANC was pushed below 50% in 2014.

This is a city that doesn't want to wait another ten or twenty or thirty years to realise its potential. This is a city that's had enough. We've seen it in the results of recent by-elections in the metro. We've seen it on the campus of the NMMU, where DASO swept to victory in the SRC elections. The ANC is the old, the DA is the new.

Nelson Mandela Bay is ready to be big. And through it, the Eastern Cape - the second largest and third most populous province in South Africa - is ready to stop being merely the labour reservoir of South Africa. This province should and can be a place to work, not a place to leave.

The ANC knows we're fast closing in on them in Nelson Mandela Bay. They've been watching us in the rear view mirror, and particularly since the 2011 Local Government Elections. We can expect them to pull out all the stops - legal or not - to stay in control in 2016, but the momentum is on our side. Change is coming to the Bay.

And just 300km up the coast lies another slumbering giant in Buffalo City Metro. Once they see what a clean-run, effective municipality can do for Nelson Mandela Bay, it surely won't be long before Buffalo City too votes for a DA government.

This article by Helen Zille first appeared in SA Today, the online newsletter of the leader of the Democratic Alliance.

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