Port Elizabeth: 14 September 2020
The Covid-19 pandemic that’s engulfed the world since about the end of 2019, killing as many as nine hundred thousand people so far and forcing periodic national lockdowns, may have had a truly devastating impact on the world’s economy – the world’s maritime economic sector that’s an essential lifeblood to world trade included – but it has also presented opportunities to refocus priority areas for economic development.
At least that was the dominant view of contributors and participants in a webinar organised by the Eastern Cape provincial government last Thursday. For South Africa’s maritime economic sector, and precisely that of the Eastern Cape – one of the country’s four coastal provinces with the second biggest claim to a coastline along the Indian Ocean – five specific areas of business investment opportunity are beckoning.
These include the fledgling ships bunkering services at Algoa Bay near Port Elizabeth established only four years ago, coastal and marine tourism along the province’s largely pristine and underdeveloped Wild Coast coastal corridor, fishing and aquaculture, skills development and environmental protection.
Participants in the webinar, among them the acting CEO of the South African Maritime Safety Authority (SAMSA), Mr Sobantu Tilayi, and representatives of the Eastern Cape provincial government and associated entities including the Eastern Cape Socio Economic Consultative Council (ECSECC) and Eastern Cape Rural Development Agency (ERCDA), the Nelson Mandela University (NMU), the South African International Maritime Institute (SAIMI) etc, were agreed that these identified areas of maritime sector investment opportunity were also interlinked and therefore highly acquiescent to close alignment.
The webinar on Thursday, attended by about 50 people, was according to the provincial government, intended to probe its Covid-19 scuppered Oceans Economy Masterplan launched with much fanfare in March this year, for low hanging viable investment opportunities for pursuit almost immediately in the aftermath of the Covid-19 pandemic.
This was because, the provincial government said: “COVID-19 has upended major sectors of the economy. The lockdown measures imposed on companies to enforce social distancing resulted in supply-side shocks for the economy. The closure of international borders disrupted the global value chains for critical industries such as maritime industry.
“These supply-side shocks induced the demand-side shocks, with most workers losing jobs and incomes. Unemployment across industries skyrocketed, resulting in a deep slump in the economy. Key sectors of the Oceans Economy were not left unscathed by the COVID-19 lockdown measures. With the evidence that the coronavirus is receding, and the country moving to Level 2 of the Risk-adjusted Strategy for Economic Activity, there’s an urgent need to jumpstart economic recovery of the critical sectors of the Oceans Economy in the Eastern Cape.
“The province has a compelling value proposition for investors in the Oceans Economy, and it is the opportune moment to act to leverage on this proposition. Towards this end, the Eastern Cape Operations Phakisa: Oceans Economy Secretariat is convening a one-day session to assess the impact of COVID-19 on the Oceans Economy, and to map a path towards Oceans Economy recovery. Key stakeholders are convening for a conversation to map a way forward for the Eastern Cape Oceans Economy Agenda during a period characterised as the “New Normal”.”
Areas of primary interest and focus for the Eastern Cape’s allotment of some 800km of a coastline in an ocean space incorporating a 1,5-million km2 of South Africa’s exclusive economic development zone, included marine transport and manufacturing, offshore oil and gas, aquaculture, marine tourism, small harbours and coastline development, research, technology, innovation; skills development and ocean governance.
In his contribution, Mr Tilayi (SAMSA) described the ship bunkering services development in Algoa Bay as one ideal opportunity for business investment, skills development and other socio-economic value exploitation.
Launched in 2016 as a ship refuelling station taking advantage of both the suitability of the Algoa Bay region, and the steadily increasing volumes of especially trade vessels traversing the country’s oceans waters, from Western Europe, the Americas through to Asia, according to Mr Tilayi, the service was already proving to be a potential key contributor to the country’s economy, even if still at a low base.
A critical economic aspect to its potential success were global geo political and economic driven issues affecting the East and Western countries whereby, from a trade costs management point of view, the southern African seas corridor was gaining preference from shipping companies ahead of the oft congested Suez Canal.
Currently operated by three (3) bunkering service providers, he said; “the subsector had already created as many as 260 jobs – more than double the number recorded at launch (117) in 2016, with various business opportunities developing subsidiary to the core services”.
In addition to oil-based fuels, with ship technology advancements gaining pace alongside alternative fuels development, the international vessels refuelling location in Algoa Bay could further expand its services to liquified natural gases thereby expanding diversity of services.
In addition, consistent with the country’s economic development imperatives, alongside jobs creation in general, it provided a critical platform to advance transformation of the country’s maritime economy through skilling of previously disadvantaged communities as well as development of small black businesses.
Linked to this would be development of a range of maritime skills, particularly those relevant to marine and maritime tourism, environmental protection and oceans governance.
To aid this process, Mr Tilayi said SAMSA had among steps taken so far, facilitated the establishment of a Maritime Industry LED Fund whose objectives include the strengthening of sea space environment protection through development of enhanced capacity to manage pollution incidents, support research and related matters, as well as funding maritime industry development, but particularly the entry and development of small black business as well as rural economy development.
This was taking place alongside initiatives to assist the development of rural coastal areas wherein four projects had been launched, involving a maritime youth development programme undertaken jointly with the Eastern Cape government, to equip rural youths with basic maritime skills as well as find them jobs. Mr Tilayi said the MYDP had to date placed in excess of 600 of these youth on international cruise ships around the world.
The other projects involved a coastal and marine tourism initiative undertaken jointly with the Eastern Cape Tourism Board and identified local authorities; a youth skills development initiative focus on boat building and refurbishing undertaken jointly with the KwaZulu-Natal Sharks Board (now with the Moses Kotane Institute) and various others, as a well as a maritime heritage initiative undertaken jointly with the South African National Heritage Council and others.
According to Mr Tilayi, shipping companies in South Africa, among them Vuka Marine, were in the process of contributing to the initiatives with a training and crewing venture focussing on ratings and hospitality.
Meanwhile, according to the Eastern Cape Rural Development Agency (ECRDA), one other major opportunity for immediate pursuit by the province was the development of its fishing and aquaculture industry.
The aim, according to ECRDA Chief Executive, Mr Ntlanganiso Dladla, was to take advantage of the increasing gap in global seafood demand and supply, wherein current projections indicated a supply-demand gap of between 29-40 tonnes per annum in South Africa and as much as 249-322 tonnes per annum in southern Africa which in global terms, he said, represents 2.53 metric tons or nine (9) percent of global demand stripping supply.
He outlined progress with development of a marine tilapia five phases project over 12 years in the Eastern Cape and KwaZulu-Natal aimed at producing as much as 100 000 tonnes of fish species per annum by 2032.
According to Mr Dladla, the five phases development is projected to yield about 4736 direct jobs at fish farm and processing clusters – a thousand of these in its planned launch area of Mbhashe along the Eastern Cape ‘Wild Coast’ – and as many as 150 000 jobs for small scale farmers in the value chain across the region, with gross annual income of R3,4-billion against operations expenditure estimated at R1,24-billion.
Associated would be development of small-scale crop farmers producing soya, sunflower and maize, operating on half-hector plots totalling about 172000 with a potential crop value of between R134,7-million and R193,4-million per crop type by phase five of the project development.
Significantly, ownership of tilapia fish farms in the projects was being designed to assign up to 70% of ownership to workers, 30% of ownership in hatcheries and feed plants, and 38% share in fishing processing plants, thereby ensuring effective economic empowerment of affected rural coastal communities in both the Eastern Cape and KwaZulu-Natal, and possibly Mozambique.
Vital allies who voiced commitment in terms of various skills development for these and related projects, were the the Port Elizabeth based Nelson Mandela University and SAIMI along with other identified tertiary institutions in the region, the webinar was told.