Making KZN a major trade hub

2012-10-10 00:00

THE rise of the African consumer presents vast opportunities to position KZN at the heart of a new trade route to rival the famous trade routes of the past, such as the “Silk Route” and the “Incense Route”.

This was clear from deliberations at the International Entrepreneurship and Investment Conference KZN 2012 in Durban yesterday, which invited delegates to imagine KZN as a province that serves as a superhighway to the rapidly-growing African continent. The conference, which ends today, is hosted by the KZN Department of Economic Development and Tourism (DEDT), Trade and Investment KZN, the University of KwaZulu-Natal and Ithala Development Finance Corporation.

KZN as the centre of growth

KZN Premier Zweli Mkhize and Economic Development and Tourism MEC Mike Mabuyakhulu said that KZN has a number of competitive advantages, including location and various transport infrastructure assets.

These infrastructure assets include the Durban and Richards Bay Ports, as well as Dube Trade Port.

There are also major infrastructure-related projects set for KZN in the coming decades, including the Durban dig-out port, the Durban-Gauteng rail upgrade and the expansions planned for the Durban Port.

KZN as a productive economy

They stressed the need for KZN to also enhance its productive capacity across manufacturing and industry — delivering on beneficiation and value-adding activities.

Mkhize said the development of the province’s first Provincial Growth & Development Strategy will go a long way toward building KZN’s manufacturing sector.

Selling products to the world

“It is disheartening to note that although SA’s trade grew since 1994, the growth has been characterised predominantly by export of raw material commodities. The success of our province and indeed our country hinges on our ability to grow the manufactured exports,” said Mkhize.

Pushing for faster growth

Mabuyakhulu said the approach to growth should comprise of three key areas, namely:

• A reorientation of trade toward fast-growing developing countries;

• The provision of a greater level of support to the manufacturing sector to enable it to become more competitive and better able to compete for scarce levels of demand; and

• The diversification of the economy by developing new, high growth potential economic sectors.

Africa’s role in KZN’s story

Far from being a pipe-dream that belongs in the realm of the strategic objectives of multinational corporations, Africa as an investment destination will bring significant tangible benefits to the KZN economy.

A director at global management consulting firm McKinsey & Company, Bill Russo said about 40% of Africa’s recent growth has come from the consumers. He said consumer facing industries in Africa are set to grow rapidly over the next seven years.

— Business Editor.

1 A growing, young population (more than 570 million);

2 An emerging middle class with disposable income, who are also optimistic;

3 An urban explosion, with 50 cities driving nearly 40% of the growth;

4 Price matters to consumers;

5 Brand and quality are also important;

6 Traditional and non-traditional media still important, but word of mouth is also key;

7 Digital penetration is growing, with an estimated 52% of consumers surveyed by McKinsey & Company being online, primarily through the use of mobile phones; 8 Modern tastes gaining prominence in formal shopping, but also the inculcation of savings culture;

9 Informal sector is prominent, but there is a modernisation of the trade structure;

10 There are distinct consumer and regional differences.

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