Address by Mr Andries Nel, MP, Deputy Minister of Cooperative Governance & Traditional Affairs (responsible for Provincial and Local Government) at the Progressive Business Forum Breakfast at SAITEX 2016 at Gallagher Estate
Sanibonani, Thobela, Molweni, Dumelang, Avuxeni, Ndi Macheloni, Goeie môre, Good morning.
Zǎoshang hǎo. Ni hao ma?
SAITEX advertises itself as: "A World of Retail Opportunity".
We thank the Progressive Business Forum for the opportunity to retail some important ideas about what government is doing to strengthen local government and create cities and towns that are liveable, inclusive and resilient, and that are compact, connected and coordinated and good places to do business.
I want to share with you government's Back to Basics programme to strengthening local government and our Integrated Urban Development Framework (IUDF).
Both these programmes are practical implementations of South Africa's National Development Plan: Vision 2030.
Both programmes are relevant to business and to the retail sector in particular.
SAITEX as Africa's leading exhibition for retail products featuring electronics and home appliances, homeware and household products as well as building materials and tools is and ideal opportunity to share these ideas.
We are living in the urban century. The world is urbanising very rapidly.
According to the UN, fifty-four percent of the world’s population lives in urban areas.
By 2050 this will increase to sixty-six percent. In 1950 only three in ten people lived in urban areas.
Continuing population growth and urbanisation will add two-and-a-half billion people to the world’s urban population by 2050. Ninety percent of this increase will be in Asia and Africa.
In fact, according to the UN, Africa is expected to be the fastest urbanising region between 2020 to 2050.
By 2050 most of the world’s urban population will be concentrated in Asia (with fifty-two percent) and Africa (with twenty-one percent).
Sixty-three percent of South Africans already live in urban areas.
This will rise to seventy-one percent by 2030. By 2050 eight in ten South Africans will live in urban areas.
We need to guide the growth and management of urban areas in ways that unleash the potential of our cities and towns and reverse the terrible legacy of apartheid spatial injustice.
As the world looks for more inclusive and sustainable urban growth models, the efficient use of resources that can be achieved in well-designed cities is becoming the basis for economic growth and competitiveness.
While South Africa’s cities are growing rapidly, and more than 60% of people now live in our towns and cities, there is a growing recognition that we need to do more to ensure a smooth transition to resource-efficient and inclusive growth envisaged in the National Development Plan.
In April, Cabinet adopted South Africa's Integrated Urban Development Framework to tackle these challenges head on.
It sets out nine policy levers to ensure that South Africa benefits from the opportunities that are associated with urbanisation.
The Integrated Urban Development Framework recognises that urban spaces are hubs for ideas, commerce, culture, science, productivity and social development.
They are places of concentrated economic activity, cultural diversity, learning, innovation and creativity.
They give a country dynamic competitive advantages which allow people to advance socially and economically.
These opportunities have been called the urban dividend – where the concentration of an economically active population translates into higher levels of economic activity, greater productivity and higher rates of growth.
The potential of urban areas is further maximised with investment in the drivers of urban development including roads and public transport; human settlements; infrastructure networks and effective land-use regulations and good governance.
The IUDF interventions are designed to unlock the development synergy that comes from coordinated investments in people, the economy and places.
The Integrated Urban Development Framework represents a “New Deal” for urban areas by focusing on the spatial transformation of apartheid cities anchored around jobs, housing and transport.
This will restructure urban space by:
- reducing travel costs and distances, preventing the further development of housing in marginal places, thus increasing densities to reduce urban sprawl;
- improving public transport and the integration of transport modes;
- shifting jobs and investment towards dense peripheral townships;
- and making cities and human settlements safe, resilient and sustainable.
Achieving compact growth is central to this vision. This will include relatively dense transit-oriented development in which residential developments will be highly accessible to local employment and services.
This is a vision of diverse neighbourhoods with a mix of services and amenities and walkable human-scale urban environments.
For the many cities and towns with existing sprawl, it will be about applying re-densification and public transport policies to increase economic efficiency and reduce negative environmental and social impacts.
Transport is critical to achieving spatial transformation in South Africa, where too many poor people still live extremely far from work, from public goods and services and from centres of opportunity.
Other priorities include more connected, resource-efficient public services, such as efficient energy, waste and water systems, street lighting technology, and smart grids.
The IUDF recognises that achieving this will require coordinated governance and investments across the three spheres of government and all partners, including business.
The underlying principles for this growth are higher density mixed use, high quality urban design and revitalised and connected urban cores.
Inclusive economic development is also one of the main policy levers identified by the IUDF.
Urban municipalities must be able to tackle unemployment and strengthen the local economy through decisive leadership and directing strategic policies and investments.
Municipal leadership needs to send clear and consistent signals that economic development is central to their agenda.
Senior politicians and officials should strengthen linkages with other economic stakeholders such as core national and provincial departments, the private sector and civil society to engage in joint problem-solving.
This requires specific skills and competencies in our municipalities.
This is what our Back to Basics programme is addressing.
The IUDF calls for a stronger focus on creating an enabling environment for innovation and economic growth.
This would require dealing with typical obstacles for both small and large businesses such as excessive red tape, lack of reliable economic infrastructure, low service standards, poor urban management and crime which impacts on all businesses, particularly township businesses and neighbourhoods and the informal sector.
If we implement the IUDF well we will see the productivity and incomes of urban consumers rise, laying the basis for improved quality of life and a better life for all.
This in turn will impact positively on rural economies which also depend on urban consumers in the supply and demand chain.
A study done by Professor Dirk Prinsloo for the South African Council of Shopping Centres found predicts that:
- Urbanisation will increase to 68% with 3 million more urban dwellers because of urbanisation.
- The middle and upper segments of the market will continue growing with an additional 2 million households by 2021/2025 and an additional retail spend of ±r70 billion per annum.
- Additional retail floorspace of 1.5 to 2.0 million m2 could be warranted by 2021/25 mainly because of urbanisation.
The process of urbanisation creates extra opportunities for shopping centre development. The challenges are to better understand the tempo, location, market profiles, and the level of disposable income of possible future shoppers and to address special needs.
We mean business and our cities are ready to do business.
