The Cape Town City-Region

South Africa is an urbanising country

• Since the mid-1980s the bulk of the national population lives in urban areas

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• Between 1996 – 2007 population growth has been higher in the largest urban-regions

GVA spatial concentration in 2004

1904 2001

BlacksWhitesTotal

50% 1985

The three city-regions are home to 53% of national population

The Province of the Western Cape in South Africa

•The province of the Western Cape,5 million inhabitants in 2006 – 11% of national population

•and 14.8 % of national GDP

The Cape Town c.r. in the Western Cape

Cape Town city-region87% of provincial population

92% of provincial GDP

City of Cape Town3.2 million inhabitants

89% of city-region’s GDP

Cape Town is a poly-nodal city-region

(1 + 6 municipalities )

A sprawling and low density city-region

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Distance f rom City Center (km.)

Population densities (y) and distances from city centre (x) in the Cape Town city-region in 2008 Commuting distances comparable to Los Angeles

An engine of the national economy

11.8 % of National GDP

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Cape Town’s GDP pc was USD 15

25041% more than

national average

• The richest region of the country after Johannesburg

Cape Town is 16th out of 79 metro-regions

A growing city-region

Increasing international competitiveness

Cape Town’s GDP pc is roughly equal to that of

Seoul, Naples, and Mexico City

Globalised value chains…

18.5% of manufact.

employment

17% of regional exports

– Agro-food

– Tourism

Trends in 2006

20% manufact. Gross Value

Added

A flourishing wine industry

In 2006 Cape Town was the first SA destination for Europeans and Americans

Catering and hospitality activities have expanded their contribution to regional GDP by 77% over

1995-2005

…emerging “urban” clusters

Financial and business servicesThe finance and insurance

industry + 50% GDP contribution between

1995-2005Business process outsourcing

(BPO) attracts foreign investment especially in sectors

such as communication (call centres) and finance.

LogisticsCape Town is a soft gateway to Africa. The city-region handled 23.3% of South Africa’s total cargo in 2006Logistics 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

And increasing urban consumption

– Wholesale and retail

– Construction and housing

17% of regional GDP in 2006

Victoria and Albert Waterfront

+11.5% of GDP contribution between 2004-200516 000 social housing units built between 2006-2007

Public investment and

social grants

Current positive business cycle

Yet Cape Town faces extensive social problems

• Unemployment Regional unemployment stands at 22%, taking into account discouraged workers, (2006)• Increasing poverty and deprived areas

Townships:Khayelitsha is home to

12% of the regional population yet

generates 0.77% of regional GDP

Percentage of households living in poverty (trend between 1999-2005)

Regional Gini Index0.69

(Average in OECD countries is 0.30)

• HIV/AIDS

• CrimeThe 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.

• Inadequate housing and lack of affordable housingHousing deficit (410 000 units)

Inadequate housing tripled since 1993 – 31% of total housing units are informal

Issues affecting regional competitivenessLack of skills and skills mismatch

• 5.22% of workers with tertiary education (0.004% in RSA)

• Spatial mismatch between housing and location of jobs

Backlogs in capital infrastructure maintenance • USD 380 million in 2006 (road infrastructure: roads, bridges, and

culverts – some 2% of regional GDP).• Power-cuts

Environmental contamination• Ecological footprint as large as that of Greece• Rising contamination of water and land• Most affected by global warming• Impacts agro-food & tourism value chains 

Innovation capacity• Innovation falls behind Johannesburg• Lack of specialisation in high value added manufacturing• Innovation does not concentrates in key value chains

Competing through social inclusion

Produce enabling conditions (collective goods)

Creative industries

Logistics

Regional competitiveness

Agro-food Tourism Urban consumption

Financial services

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

National growth strategy

Halve poverty and unemployment by

2014

AsgiSAImprove economic growth

(average 5% per year between 2004-2014)

Binding constraints • Volatility and level of the currency• Barriers to entry, limits to competition. • Regulatory environment burdens SMEs.• Shortage of skilled labour - impact of apartheid spatial

patterns on the cost of labour• The cost, efficiency and capacity of the national logistics

system• Deficiencies in state organisation, capacity and leadership

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.

The lack of a spatial approach• A complex framework that lacks a strategic vision and reduces

policy effectiveness and implementation capacity

AsgiSANSDP

MEDS

GDS-iKAPA

IDPs

BEE

National Government

Treasury DTIPresidency

Province of the. W.Cape

City of Cape Town

Civil society

?

Need for a new generation of governance reform

• Clarifying competencies among spheres (e.g. built environment)

• Consolidating and mainstreaming frameworks for strategic planning at the regional/metropolitan level.

• Building and retaining capacity in the sub-national civil service.

• Creating an efficient public finance framework.

• Strengthening civil engagement.

Issues for discussion• Issue 1. Skills mismatch and metropolitan competitiveness.

• Issue 2. Distressed areas and economic development

• Issue 4. Metropolitan competiveness and national growth strategies

• Issue 3. Urban form, sustainable development and competitiveness.

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).