OECD Cape Town Territorial Review


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International launch at a session of the OECD urban working group in Paris in June 2008 before 30 OECD member countries.

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OECD Cape Town Territorial Review

  1. 1. The Cape Town City-Region
  2. 2. South Africa is an urbanising country <ul><li>Since the mid-1980s the bulk of the national population lives in urban areas </li></ul><ul><li>Between 1996 – 2007 population growth has been higher in the largest urban-regions </li></ul>The three city-regions are home to 53% of national population Cape Town c.r. Durban c.r. Johannesburg c.r. GVA spatial concentration in 2004 1904 2001 Blacks Whites Total 50% 1985
  3. 3. The Province of the Western Cape in South Africa <ul><li>The province of the Western Cape, </li></ul><ul><li>5 million inhabitants in 2006 – 11% of national population </li></ul><ul><li>and 14.8 % of national GDP </li></ul>
  4. 4. The Cape Town c.r. in the Western Cape Cape Town city-region 87% of provincial population 92% of provincial GDP City of Cape Town 3.2 million inhabitants 89% of city-region’s GDP
  5. 5. A sprawling and low density city-region Cape Town is a poly-nodal city-region (1 + 6 municipalities ) Population densities (y) and distances from city centre (x) in the Cape Town city-region in 2008 Commuting distances comparable to Los Angeles
  6. 6. An engine of the national economy <ul><li>The richest region of the country after Johannesburg </li></ul>Cape Town is 16th out of 79 metro-regions 11.8 % of National GDP Cape Town South Africa Cape Town’s GDP pc was USD 15 250 41% more than national average
  7. 7. A growing city-region
  8. 8. Increasing international competitiveness Cape Town’s GDP pc is roughly equal to that of Seoul, Naples, and Mexico City
  9. 9. Globalised value chains… <ul><ul><li>Agro-food </li></ul></ul><ul><ul><li>Tourism </li></ul></ul>Trends in 2006 Catering and hospitality activities have expanded their contribution to regional GDP by 77% over 1995-2005 18.5% of manufact. employment 17% of regional exports 20% manufact. Gross Value Added A flourishing wine industry In 2006 Cape Town was the first SA destination for Europeans and Americans
  10. 10. … emerging “urban” clusters Financial and business services The finance and insurance industry + 50% GDP contribution between 1995-2005 Business process outsourcing ( BPO ) attracts foreign investment especially in sectors such as communication (call centres) and finance. Logistics Cape Town is a soft gateway to Africa. The city-region handled 23.3% of South Africa’s total cargo in 2006 Logistics support regional specialisation in the oil industry and repair and maintenance of ships and offshore drilling platforms Knowledge intensive and Creative industries Medical Tourism Food biotechnology Film and publishing industries
  11. 11. And increasing urban consumption <ul><ul><li>Wholesale and retail </li></ul></ul><ul><ul><li>Construction and housing </li></ul></ul>+11.5% of GDP contribution between 2004-2005 16 000 social housing units built between 2006-2007 Public investment and social grants Current positive business cycle 17% of regional GDP in 2006 Victoria and Albert Waterfront
  12. 12. Yet Cape Town faces extensive social problems <ul><li>Unemployment </li></ul>Regional unemployment stands at 22% , t aking into account discouraged workers, (2006) <ul><li>Increasing poverty and deprived areas </li></ul>Townships: Khayelitsha is home to 12% of the regional population yet generates 0.77% of regional GDP Regional Gini Index 0.69 (Average in OECD countries is 0.30) <ul><li>HIV/AIDS </li></ul><ul><li>Crime </li></ul>The city has one of the highest crime rates in the nation: Cape Town has 7% of the nation’s population, but it is responsible for 10% of the country’s reported homicides and 21% of its drug-related crime. <ul><li>Inadequate housing and lack of affordable housing </li></ul>Housing deficit (410 000 units) Inadequate housing tripled since 1993 – 31% of total housing units are informal Percentage of households living in poverty (trend between 1999-2005)
  13. 13. Issues affecting regional competitiveness <ul><li>Lack of skills and skills mismatch </li></ul><ul><ul><ul><li>5.22% of workers with tertiary education (0.004% in RSA) </li></ul></ul></ul><ul><ul><ul><li>Spatial mismatch between housing and location of jobs </li></ul></ul></ul><ul><li>Backlogs in capital infrastructure maintenance </li></ul><ul><ul><ul><li>USD 380 million in 2006 ( road infrastructure: roads, bridges, and culverts – some 2% of regional GDP) . </li></ul></ul></ul><ul><ul><ul><li>Power-cuts </li></ul></ul></ul><ul><li>Environmental contamination </li></ul><ul><ul><ul><li>Ecological footprint as large as that of Greece </li></ul></ul></ul><ul><ul><ul><li>Rising contamination of water and land </li></ul></ul></ul><ul><ul><ul><li>Most affected by global warming </li></ul></ul></ul><ul><ul><ul><li>Impacts agro-food & tourism value chains   </li></ul></ul></ul><ul><li>Innovation capacity </li></ul><ul><ul><ul><li>Innovation falls behind Johannesburg </li></ul></ul></ul><ul><ul><ul><li>Lack of specialisation in high value added manufacturing </li></ul></ul></ul><ul><ul><ul><li>Innovation does not concentrates in key value chains </li></ul></ul></ul>
  14. 14. Competing through social inclusion <ul><li>Produce enabling conditions (collective goods) </li></ul>Active labour policy and skills improvement Innovation capacity (Regional innovation system) Built environment (housing and transportation) Environmental sustainability (“climate proof” Cape Town) Specific policies for economic development in townships Creative industries Logistics Regional competitiveness Agro-food Tourism Urban consumption Financial services
  15. 15. National growth strategy <ul><li>AsgiSA </li></ul>Halve poverty and unemployment by 2014 Improve economic growth (average 5% per year between 2004-2014) <ul><li>Binding constraints </li></ul><ul><li>Volatility and level of the currency </li></ul><ul><li>Barriers to entry, limits to competition. </li></ul><ul><li>Regulatory environment burdens SMEs. </li></ul><ul><li>Shortage of skilled labour - impact of apartheid spatial patterns on the cost of labour </li></ul><ul><li>The cost, efficiency and capacity of the national logistics system </li></ul><ul><li>Deficiencies in state organisation, capacity and leadership </li></ul>Strategy to reduce binding constraints • infrastructure investment • sector strategies • skills and education development • eliminating the Second Economy • macro-economic issues • Governance and public administration issues.
  16. 16. The lack of a spatial approach <ul><li>A complex framework that lacks a strategic vision and reduces policy effectiveness and implementation capacity </li></ul>AsgiSA NSDP MEDS GDS-iKAPA IDPs BEE National Government Treasury DTI Presidency Province of the. W.Cape City of Cape Town Civil society ?
  17. 17. Need for a new generation of governance reform <ul><li>Clarifying competencies among spheres (e.g. built environment) </li></ul><ul><li>Consolidating and mainstreaming frameworks for strategic planning at the regional/metropolitan level. </li></ul><ul><li>Building and retaining capacity in the sub-national civil service. </li></ul><ul><li>Creating an efficient public finance framework. </li></ul><ul><li>Strengthening civil engagement . </li></ul>
  18. 18. Issues for discussion <ul><li>Issue 1. Skills mismatch and metropolitan competitiveness. </li></ul><ul><li>Issue 2. Distressed areas and economic development </li></ul><ul><li>Issue 4. Metropolitan competiveness and national growth strategies </li></ul><ul><li>Issue 3. Urban form, sustainable development and competitiveness. </li></ul>
  19. 19. <ul><li>A most significant institutional reform proposed by the OECD Review is the need to explore the establishment of a new regional planning authority that “could help create horizontally co-ordinated regional development planning at the level of the Cape Town city-region. Given that different sectors – land-use, housing and economic development – are intrinsically connected to the spatial economy, a cross-sectoral body would offer much more coherence. This institution would give its delegates the decision-making power to coordinate investments” (OECD 2008: 29). </li></ul>