Investment Promotion in Durban? Durban as SAs 2 nd largest City was not retaining Business well enough; not expanding fast enough; little FDI, etc… City Leadership & Business Leadership - Public Private Partnership in 1999 Best Practice City Commission formed (BPCC), researched & made recommendations to City Council - 2000 IPA was recommendation #1 & DIPA formed Fully funded by City Council, but lots of Business time invested
clear choice for governments worldwide to improve service delivery, attract investment, reduce costs, and increase accountability Public-private partnership (PPP) mechanisms have become the clear choice for governments worldwide to improve service delivery, attract investment, reduce costs, and increase accountability. Although tremendous progress has been made in the last ten years in designing and implementing PPP programs and transactions, most countries have only just "scratched the surface" of their enormous potential as an economic and governance tool. The knowledge of the "why and how" to effectively use PPP strategies and techniques is a valuable resource, one that is slowly taking hold amongst all stakeholder groups including government, the private sector, and the public-at- large. The Institute for Public-Private Partnerships, Washington DC www.ip3.org Partnership!
Einsteins Definition of Insanity Continuing to do the same thing over and over again and expecting a different result!!
BPCC Overview MESSAGE FROM THE COMMISSION: …recommendations are a package of proposals that should be implemented holistically in terms of a concerted, co-ordinated, & comprehensive program. They should not be approached in a fragmented manner. COMMISSION FINDINGS: Promotion and Marketing to Investors (Improvement needed?) Specific Investment Information (Lacking?) Decision-Making Procedures & Policies (Improvement needed?) Professionalism and Courtesy (Attention desired?) COMMISSION RECOMMENDATIONS (LIST): 1.Investment Promotion Agency 2.Corporate Plan 3.Development Facilitation Centre 4.Policy and Legal Framework 5.Local Economic Development Zones 6.Attitudinal Changes
Projects Vision LTDF Strategic focus areas programmes IDP - 8 Point Plan Fit within Citys Strategic Alignment Investment Facilitation & Promotion Investment Facilitation & Promotion INVESTMENT PROMOTION AGENCY
Need to push for an IPA? UNs work (inter alia) on the MDGs has recently prioritised the Millenium Cities Initiative (MCI) to help Municipal investment achievement. DIPA has been invited by UN to help in Africa this year SA Presidents State of the Nation address lists the Apex Priorities with Eco-Dev & Business Unusual as top of the Agenda Ruling ANC Party in SA & its current President has prioritised investment & economic development as best way to alleviate poverty Finance Minister & Natl Treasury has just released Commission Report saying accelerated growth (via pvt sector investment) is the best lever for SAs future now DTI has reinvigorated Trade & Investment SA, appointed the CEO & reviewed some incentives IDC Board (with GTZ) is recommending & funding new investment Agencies in Municipalities across SA. CT has one & Jhb is busy setting its up Provincial Spatial Economic Dev. Strategy (KZN DED) has 4 Pillars which must be included in City IDP. Pillar 1 is Accelerate Investment Citys own Backlogs Strategy: Only 2 new funding sources Harvard Study highlights that the SA Current Account deficit at present levels requires us to accelerate inward investment. An IPA at this time is most NB On a Cost-Benefit basis, or ROI, an IPA is a massive direct profit centre which should be expanded
BPCC Recommendations estd. eff. 2002 Established under Sec. 21 of Cos Act (NPO), & full Council Resolution, but, Effective 2005: Leadership decision change & MFMA resulted in Co. dereg. & full absorption by eThekwini Municipality IPA Mandate (BPCC & now) - First Stop Shop for: Proactive promotion and marketing Investor information Gather relevant information Referral of investor enquiries Provide first level advice An information management system Provide Councils with strategic advice Needs of existing investors Deal-making function DIPA: When & What? …Durban Chamber of Commerce Board Resolution for BPCC Review
What is DIPA? DIPA is a FREE advisory, facilitation & promotion service of the City of Durban. Its objective is to retain & grow jobs, + new City revenue streams via promotion of investments into Durban, whilst growing existing investment base. It is a unit of the eThekwini Municipality First City run IPA in the Country Internationally recognised and benchmarked Formed out of BPCC
DIPA - How do we operate? Promote the City - B2B, G2B & G2G Facilitate Medium - Larger Projects –Agribusiness; Mnfg; ICT&E; Tourism/Prop; Maritime & Logisitics Retain / Expand existing investors (BR&E) Facilitate Medium - Larger Events –WIB; CBC Africa Investment Forum; Celebrate Dbn; Sector B/fasts & W/shops Grow / Support new PPPs & Linkages (e.g. KZNoS, DFO, Agribiz Forum, BSU etc.)
Investment promotion & marketing Existing business retention and expansion(*) Foreign investor support Undercapitalised investment development Investment environment & policy review/improvement Land use controls & business development in townships Agribusiness Forum 2010 Economic Development Opportunities DIPA: Main Activities = Marketing & Comms; Business Consultancy; Project Management plus 2 new operational areas…
Who do we work with? (Fully funded by City – R10m* ) City Units & Agencies (EDU, BSU, TD, DP&M, TPD, SX, KZNoS, DFO, ICC, SPU, etc) United Nations ; World Bank ; WAIPA International Trade Centre & WTPF Local & Foreign Media (Editorial & Ads) Commonwealth Business Council; CII India Our Natl Dept. of Trade & Industry, NEPAD Provincial TIKZN, & KZN Dept. of Eco. Dev. Organised Business (DCC, DAC, Growth Coalition, Minara Chamber, BUSA, etc)
Cautions for IPA? Frustration can occur due to a lack of skilled human resources committed to IPA There can often be a lack of understanding of, or support for the Best Practice recommendations w.r.t. Investment Promotion prioritisation Operating within a highly politicised & bureaucratised environment is challenging No easy access to private sector project funding if there is Municipal structural internalisation Counter-productive interdepartmental dynamics Higher growth rates can strain some of the infrastructure (port, roads, elec., water) Insufficient platformed, serviced land Crime & the international perceptions Ad hoc excl. of the City by some in the Capital
DIPA: Key Achievements Investment promotion of Durban: >150 Journals, Trade/Investment Publications, Business Newspapers, Sector Periodicals, + TV Led/participated in approx 50 Business Missions focusing on investment & jobs Led/participated in approx. 20 conferences & exhibitions locally & abroad promoting Durban Facilitated R10Bn+ worth of new fixed capital business investment (=Millions City revenue) Created/retained in excess of 10 000 jobs Attracted participation in Durban of the UN, World Bank, WAIPA, CBC - AIF, G8 Partners; plus key IBSA & East Asian counterparts PMR Diamond Arrow, Gold & Bronze Awards One of only IPAs into the UN IAC, via UNCTAD Clean Audit Reports & always within budget Established & grew KZNonSource; Dbn Film Office; AgriBusiness Forum
THE GOLDEN RULE Business stays and expands where it is well treated and appreciated
Broad LED Strategies Creating jobs through investment in infrastructure, services, land reform Retaining and growing existing business Establishing new local business Attracting investment and resources Plugging the economic leaks Investing in soft infrastructure Marketing, attracting visitors
Form Task Team; appoint local Co-ordinator Assess interest, obtain commitment Agree scope of programme Launch and promote local programme Identify businesses to be visited Recruit & train volunteers Business visitation - conduct surveys Prepare action plans Analyse survey data, Review other info sources Review progress & impact Feedback to stakeholders Implement plans Immediate follow up Business Retention & Expansion (BR&E) Program
Outcomes Growth of existing businesses creates as much as 60-80% of all new jobs They provide most of the investment for new local economic initiatives They generate ideas for new businesses They play a vital part in encouraging outside businesses to relocate or establish within their community.
ALL HITS Super 7 of Durban CBCs Views: Today we (CBC) also address the following four challenges, working in partnership with Commonwealth governments and the private sector. Changing perceptions – Globalisation - Technology & Skills – The Commonwealth Factor Many Commonwealth countries offer good investment opportunities but suffer from popular misconceptions, uneven media coverage and failure to promote their economic strengths to important external audiences.
Why Super 7? Acronym: ALL HITS An easily understandable, mental tool to help us all highlight and expand upon why this is becoming Durban s best decade of delivery and growth. Enlightening to our foreign business partners & Government Leaders. Will help to secure the economic & business benefits of Durban for All.
Award Winning Municipality Lifestyle of Business & Pleasure Largest Human Resource Pool Highest Growth Rates Infrastructure Leader Tourism Crown Substantial Business Base Durban, KZN in a global context ALL HITS
Why Localised IPA? Highest vested interest in success Business principles of FOCUS Good opportunity for sustainable local business partnerships & alignment Compliments, reinforces & scales up National efforts Huge opportunity to generate substantial, additional local revenue for City/Region (ROI) Gives the region/city a better competitive edge over others
If you think you are too small to be effective, you have never been in bed with a mosquito -Anita Roddick Founder, The Body Shop
Thank you for your attention & support You are always welcome in Durban, KZN South Africa!