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Many businesses fall prey to the situation where there is so much focus on growing top-line that bottom-line suffers. Eventually, management looks at the bottom-line results and cannot explain them. Such a situation often creeps up on management over a period of time and once revealed needs to be resolved almost overnight to calm down stakeholders. Results that cannot be explained are man-made problems, which, with the right resources on board, can be unraveled and explained. But it takes time and costs money to do so. A proactive strategy to prevent such incidences is advised as a long-term investment for sustainability. So, what are some of the building blocks necessary to ensure the sustained integrity of financial results numbers and information for decision making? Invest in getting on board the right calibre professionals within the finance team. Finance resources do not come cheap. You get what you pay for. If you do not invest in recruiting appropriately qualified and experienced people for your finance team then you are very likely to incur significant costs to undo the damage caused to your business by having brought on board the misfits. Equally important is assessing the business needs as it grows; these needs may outgrow your current head of finance, requiring a more senior person to be added on top with the overall oversight function of the finances. Implement key controls and business policies to ensure integrity of the numbers. Often, depending on the size of the business, not all key controls can be put in place. In such instances, monthly independent review and analysis of numbers by a finance professional plays a critical role as a key control in identifying any anomalies in the numbers. Cash forecasting is critical to keep cash flow under control with minimal business disruption and distractions. Cash flow is a reality that can close the doors of a business if not managed properly. Invest in a suitable enterprise risk planning (ERP) system to support your business needs. As your business grows and outgrows your current ERP system, invest in having professional project management of an upgrade or change in the ERP system with an in-house steering committee overseeing the project.  Burdening existing management who may already be overworked with little or no time to spare for such critical projects will only lead to throwing more money at rectifying problems associated with a poorly managed ERP project. Directors must invest in their own learning and development to be able to interpret the annual financial statements and ask the head of finance questions on the results with confidence to fulfil their duties in terms of the South African Companies Act. Accepting the results just because the auditors have completed their duties and are ready to issue an unqualified external audit report is not good enough reason for directors to approve the annual financial statements. In conclusion, ensure that the right building blocks are in place within the finance department to support sustainable growth. Growing at a rapid rate is just vanity if the business is not sustainable in the long term. As a mentor and financial governance expert, I often find business owners caught up in the present operations, with very little time invested on the long term (3 to 5 year) planning of the business. If no time is made for good governance, then the day will arrive when you are forced to make time. This day arrives once things have gone wrong. This is a very reactive approach and costly too. Rather, it is best to be proactive and create the investment in good governance today before you are forced to do so. info@fdvedanta.co.za www.fdvedanta.co.za

2009-07-23 In 2009 the world celebrates the 200th birth anniversary of Charles Darwin and the 150th anniversary year of his seminal book, The Origin of Species. Evolution is one of the most significant scientific theories of all time, and remains the basis for modern biology. Darwin's theory called "natural selection" was that through a process all organisms adapt and evolve or alternatively die out. Competition for natural resources is one of the key factors of the evolutionary process. The world has experienced an unprecedented increase in population during the past century. Dramatic shifts in consumption of food have accompanied the population explosion provoking competition for food resources. The consequences have included a surge in grain production, a spectacular rise in meat production and consumption, and the emergence of an increasingly vital role for international trade. Agencies the world over are continually making decisions about how to invest in a future that will bring a healthy, sustainable diet to more people- or to fewer. Similarly in modern day economics a variety of businesses compete endlessly in an environment or marketplace. This is subject to external forces like debt, population growth, fluctuating oil prices, and demand for new technologies such as microelectronic, computers, telecommunications, robotics and biotechnology. Ever evolving commodities including I-pods, mini note book computers, digital picture frames and blue ray discs dominate the 'must have' list of desirable objects. Not to mention the ever changing ways of social interacting varying from SMS's, e-mail, to Twitter and Facebook, all requiring human behavioural adaptations. Research now indicates that the world is facing an unprecedented crisis on issues of global warming and climate change to which conditions it must also adapt its way of life. Over the past century, the Earth has increased in temperature by about 0.5 degrees Celsius. Many scientists believe this was caused by an increase in concentration of the main greenhouse gases resulting from man's overproduction of these gases to meet the needs of modern living. Currently the global economy has had a severe slowing down thrust upon it in the form of a globally depressed economy. Across the globe, change is apparent in the fluctuating demand for commodities such as oil, gas, and steel. As economies grow, the need for natural resources grows, and the prices of these resources rise. Conversely, as economies slow, the demand slows and prices go down, which has a negative impact on production, affecting industrial plants and creating closures and retrenchments, all with dire consequences for the local economies affected. The current global financial volatility has in part been created by 21st century banking systems caused by micromanagement of interests rates and currencies by central bankers in conjunction with fractional reserve lending and deficit spending everywhere (Mike Shedlock, 2009). Change is inevitable and is happening on a global scale as the world's banks and economies adapts to all these new circumstances. However, predictions are already in place that the worst is over recession wise and that growth should rebound, albeit slowly. Economies are not only influenced by factors in the global market place but by political policies. Socialism, capitalism and communism have all made their mark on the world's economies. These policies have been subject to change and debate to cope with the ever shifting needs of society as well as the demands of integration into a global community. All these factors as history has shown, will have influence over the path that mankind selects in this century. What is clear is that evolution has to happen for mankind to meet the challenges it faces in order to progress and grow. According to Andrew Sheng, Deputy Chief Executive, Hong Kong Monetary Authority, "The challenge of the 21st century is to promote shared growth, to prevent future crisis and to design a new international financial architecture that promotes resilient financial systems, efficient global resource allocation and a level playing field" (1998). Interestingly it has taken more than a decade for global decision makers to take finally note of the many challenges that confront them. In the South Africa Context In South Africa, the political arena has been a notable instrument of change over the past years and its influence on the future of the country is once more a subject of speculation The national election in April 2009 returned the African National Congress (ANC) as the country's ruling party with Jacob Zuma as the new president. South Africa's democracy has entered into a new chapter and continued transformation of the SA political-economic landscape is expected. However, President Zuma has chosen a cabinet that has largely pleased the business and financial community, both in South Africa and internationally. Notably Trevor Manuel, South Africa's well respected finance minister has been kept on as head of the new National Planning Commission. Manuel will now be responsible for strategic planning and co-ordinating among government departments. South African National Assembly Election Results for the Five Top Political Parties (22 April 2009) Parties Leaders Votes % Change Seats Change African National Congress (ANC) Jacob Zuma 11,650,748 65.90 -3.79 264 -15 Democratic Alliance (DA) Helen Zille 2,945,829 16.66 +4.29 67 +17 Congress of the People (COPE) Mosiuoa Lekota 1,311,027 7.42 +7.42 30 +30 Inkatha Freedom Party (IFP) Mangosuthu Buthelezi 804,260 4.55 -2.42 18 -10 Independent Democrats (ID) Patricia de Lille 162,915 0.92 -0.78 4 -3 President Zuma wants his administration to deliver visible change. He stated, \"We wanted a structure that would enable us to achieve visible and tangible socioeconomic development within the next five years". A message of renewal and progress was evoked at his inauguration on the 9 May. Building on the promises of past president Nelson Mandela, he said, "Fellow South Africans, this is indeed a moment of renewal. It is an opportunity to rediscover, that which binds us together as a nation. The unity of our nation should be a priority for all sectors of our society. We are a people of vastly different experiences, of divergent interests, with widely different views. Yet we share a common desire for a better life, and to live in peace and harmony. We share a common conviction that never shall we return to a time of division and strife. From this common purpose we must forge a partnership for reconstruction, development and progress". The Zuma era in underway in South Africa and time will reflect on the progress that is made. The immediate challenge to the new government is that of safeguarding economic growth. As with the rest of the world South Africa's economy has been taking a battering, however it may still be better placed than many others to weather the storms. In part the economic firmness in the country is a consequence of public sector spending, which is likely to remain robust. Zuma's government is expected to continue spending on general state services, while the drive by government and public corporations on infrastructure spending will also continue. The public sector plans to increase capital by a massive R 787 billion over the next three years. Economic growth is expected to rebound to around 2,5% in 2010 as confidence improves on the back of lower interest rates and increased activity around the hosting of the 2010 FIFA World Cup (Nedbank Guide to the Economy, April 2009). The South African Reserve Bank's Monetary Policy Committee (MPC) has already responded to the improved inflation outlook and recessionary conditions by cutting interest rates by 450 basis points, taking the repo rate to its lowest level in nearly three years, after five percentage points of increases between June 2006 and June 2008. KwaZulu-Natal is a Key Component Change is not only happening on a national level but has filtered down to each of the nine provinces of South Africa, one of which is KwaZulu-Natal. Although it is the third smallest province of the country, KwaZulu-Natal is a key component of the southern African economy. Stable and Effective Governance The provincial government of KwaZulu-Natal is committed to providing stability and effective governance. As a consequence of the national elections, the leadership of the province was taken over by Dr Zweli Mkhize in April 2009, who at his inauguration also promised change, stating that: "Our conviction that the future is in our hands will enable us to transform KwaZulu-Natal to become the leading province in terms of its economic development and the quality of the lives of all its citizens'. KZN election results Party Votes % Votes Seats African National Congress (ANC) 2 192 516 62.95 51 Inkatha Freedom Party (IFP) 780 027 22.40 18 Democratic Alliance (DA) 318 559 9.15 7 Minority Front (MF) 71 507 2.05 2 Congress of the People (COPE) 44 890 1.29 1 African Christian Democratic Party (ACDP) 23 537 0.68 1 Others (see below) 51 951 1.49 0 Total 3 482 987 100.01 80 Five Priorities Premier Mkhize stated that in order to address the many challenges facing KwaZulu-Natal, the following five priorities will receive focus- • Rural development and agrarian reform to ensure food security and rehabilitation of emerging farmers who acquired land from land reform processes, providing mentorship, capacity building and relevant support. The long term goal is for the agricultural sector to be strengthened to create jobs and maximize export potential. • Intensive campaign to fight crime, support community conflict resolution mechanisms and promotion of effective policing, utilizing the existing structures and police volunteers. This will be accompanied by the fight against corruption. • Support the health reforms embodied in the National Health Insurance for effective health services and promotion of health promotion programmes. The HIV and AIDS programmes will be expanded and the fight against multiple drug resistant Tuberculosis (TB) will be prioritized, whilst the conditions of employment are attended to, to eliminate the possibility of frequent industrial action by the health personnel. • Promotion of adult literacy and the improvement of the quality of education. • Building the economy to create decent jobs, fight unemployment and eradicate poverty, and promotion of small enterprise development and building a cooperative movement to address the issues of empowerment. Advantages of KwaZulu-Natal KwaZulu-Natal has many assets that provide the basis for such challenges to be met. These include: 1. Advantageous geographical position on the east coast of Africa Of major significance is that the ports of Durban and Richards Bay around which KwaZulu-Natal is established are two of Africa's gateways to the sea-lanes of the world. The two ports provide a key competitive advantage and ensure the province\'s importance for economic growth, effectively repositioning the country to increase its share of the global market. 2. Largely untapped environmental resources Known as the garden province, KwaZulu-Natal is a subtropical region of lush and well-watered valleys. An abundance of coal is found in the north of the province as well as a variety of other minerals, and the combination of its soils and climate make it ideal farming country. 3. Unparalleled scenic beauty and bio-diversity. KwaZulu-Natal boasts two World Heritage Sites - the Isimangaliso Wetland Park and the Ukhahlamba Drakensberg Park. Superb beaches of world-class quality are to be found along virtually the entire coastline. 4. Enormous Human Potential Known as the Kingdom of the Zulu, KwaZulu-Natal is a melting pot of African, European and Indian cultures. The province has a plentiful supply of both skilled and trainable labour, as well as proven entrepreneurial abilities, with the dedicated workforce. Labour costs are low and productivity superior, with high standards of local management. 5. Business Friendly KwaZulu-Natal is the stepping stone to Africa markets and this is a real advantage in setting up a business base in the Province. You will find a business-friendly environment with an informed financial system, a sound banking sector, strong investment ratings, effective trade support facilities, and a huge emerging market. Impressive Ports and Cities As a consequence of the location of KwaZulu-Natal's two ports, Ethekwini Municipality (Durban and surrounding towns) and Richards Bay have developed into major cities. Other key towns in the province include Newcastle, Ladysmith Margate, Kokstad Pinetown, Port Shepstone and Umhlanga Rocks. Previously situated at Ulundi, Pietermaritzburg in the Msunduzi Municipality is the capital city of the province. Pietermaritzburg's reputation is slowly changing from sleepy hollow to that of "City of Choice", combining both style and vitality. Apart from a hub of governance, the city is a regional centre for impressive sports events, outdoor festivals, shows, education, and the arts such as the Comrades Marathon, the Duzi Marathon, the Midmar Mile, the Royal & Garden Show, Art & Cars in the Park and International cycling events. The Pietermaritzburg area is ideally positioned as a base for manufacturing, particularly aluminium, chemicals, food, furniture, timber and leather products. Many companies, like Hulamin and the R1 billion Safsteel plant, have established themselves in the vicinity and opportunities exist in the manufacturing of steel products. A rejuvenation of the inner city has been sparked by government departments that are buying and renovating old buildings to be used as office space. The city has made a commitment to spending 20% of its budget to maintain existing infrastructure and ensure that the region remains an attractive investment option for business. A key project that has been identified by provincial government is the development of a corridor between Pietermaritzburg and Durban, similar to the one connecting Pretoria and Johannesburg. The land alongside the highway has been identified as high-value area by investors eThekwini Metropolitan eThekwini Metropolitan is the economic powerhouse of the province and a very promising global competitor. The GDP generated ranks eThekwini as the 2nd largest economic centre behind Johannesburg. Ethekwini is not only an investment capital, a tourism and leisure centre, an international logistics management centre, retail node, but also a cultural and entertainment hub. Currently, the municipality is a substantial administrative centre, providing key public services within the Metropolitan area as well as to the wider region. Impressive Port Durban receives 64% of South Africa's seaborne container traffic and is the busiest port in Africa. The R300-million harbour entrance widening and deepening project, which commenced in the third quarter of 2007, is due for completion in April 2010. The project, which was commissioned by Transnet, will widen the entrance from 120 m to 220 m and deepen it from 12, 8 m to 19 m at its deepest point. 
This upgrading will allow 9 000- TEU (twenty-foot equivalent units) container vessels to safely navigate the entrance. At present, the largest vessels that can be accommodated are limited to 4 000 TEUs. The improvement will result in significant cost savings and have a major impact on the South African economy. The project aims to provide for the Port of Durban's development needs for the next 60 to 100 years. Transnet Port Terminals has invested R 72-million in the delivery of two 285-t rail-mounted gantry cranes to be used in the Pier 1 terminal expansion at the Durban harbour. The cranes will facilitate the transfer of containers between internal road vehicles and road wagons. The Pier 1 expansion includes 18 rubber-tyred gantry cranes, six ship-to-shore cranes, a rail terminal and an administration building. In keeping with these upgradings, eThekwini's Municipality's Economic Development Department has spearheaded the formation of a maritime cluster. The cluster includes shipping, boating, cargo handling, storage, transport and logistics. Support services, such as ship repairs, communication, pilotage, customs clearing, inspection services, and marine insurance are also covered. The Department's Acting Head, Shunnon Tulsiram, said: "The development and operations of the port and city are interrelated. To achieve a common vision for the sustainable development of the port and city in the future, and to ensure their successful coexistence, joint planning is essential". Giant Operations in Richards Bay Richards Bay anchors the country's largest harbour, the world's largest coal export terminal and numerous giant industries and operations. Richards Bay is strategically positioned relative to inland markets and tourist attractions such as iSimangaliso Wetland Park. The city is easily accessible via a dual carriageway from Durban to Pongola. "Richards Bay is experiencing an unprecedented boom within all sectors. The expanded John Ross Highway is forging along, the Broadwalk Shopping Centre expansion is nearing completion, four major residential developments around the city are being completed, plans for a new entertainment complex near Medway will add to the existing expansion at the Small Craft Harbour, huge port plans are reaching fruition, and industrial land prices have risen 100% within the last two years due to burgeoning demand,\" says Cliff Bell, business development & marketing manager for Richards Bay Industrial Development Zone (IDZ) (Property 24, September 2008). The Richards Bay Industrial Development Zone (RBIDZ), on the north-eastern coast of South Africa, encourages international export competitiveness through tax and duty-free incentives, world-class infrastructure and competitive input costs. The RBIDZ, which totals 540 hectares, comprises five sites that have been developed to suit various industry types. The site for light industry is presently being developed into a customs-controlled secure estate, while the other four sites that focus on medium to heavy industry are being developed to client specification Since it\'s opening, the Port of Richards Bay has expanded rapidly with the establishment of one new berth every second year on average, proudly fulfilling its aim of making it South Africa\'s leading port in terms of cargo volumes. Transnet Port Terminals is preparing for the next boom by creating additional capacity at Richards Bay. The 800 million rand expansion of South Africa's Richard's Bay export terminal will continue in anticipation of a recovery in demand for the country's exports, said, Solly Letsoalo, Transnet Port Terminals chief operating officer (Business Report, May 20, 2009). Volumes moved through the port are expected to double over the next five years. Capacity will rise to 21 million metric tons a year by 2014 from 13 million tons, and will be further increased to handle 35 million tons annually by 2020. Richards Bay Coal Terminal is owned by South Africa\'s largest coal exporters, including Anglo American Plc, BHP Billiton Ltd. and Xstrata Plc. It is the biggest source of coal for European power plants. Richards Bay is likely to export 56.77 million tonnes of coal this year compared with a capacity of 76 million tonnes, expanding to 91 million tonnes. When that expansion is complete Richards Bay Coal Terminal will be the world\'s single biggest coal export facility. The development of the port and the new businesses it will attract will be beneficial for the economies of the surrounding communities, and will without a doubt create more job opportunities. South Coast Action According to Pat Symcox of Colliers International, an upgrade to many of the beach fronts of the smaller towns on the South Coast as well as a residential creep towards a healthier and more relaxed lifestyle on the South Coast continues create opportunities. This trend is apparent in the rapid development of the region. South of Durban, the Amanzimtoti region is growing fast. Arbour Crossing, a major new shopping development, was opened on November 20th 2008, with a Pick \'n Pay Hypermarket being the key tenant. The Galleria, a second development in the same area, is due to open in 2009. Further south, Port Shepstone, which falls under the Ugu District Municipality, is the administrative, commercial, distribution and transport centre of the South Coast. An urban renewal programme has been proposed with the specific aim of stimulating the tourism economy in the area. Other projects in the Ugu region include the development of the Biofuels industry; the development of clinics and hospitals in rural areas; local skills development; developing a tourism and agricultural master plan for the region; investment in electricity generation infrastructure; the proposed upgrading and expansion of the Margate Airport; a new sports complex and the setting up of major local manufacturing operations. Tremendous Growth on the North Coast The KwaZulu- Natal north coast area is undergoing tremendous growth and development. Over the last few years millions of rands worth of development has occurred at Umhlanga Ridge and Umhlanga New Town Centre. Consequently major national and international companies have moved into these areas. Several new office parks are still under development and nearing completion. Inland service centres Ladysmith is the commercial centre for a large farming district and serves as a major shopping centre for towns such as Colenso, Glencoe, Bergville and Dundee. As Ladysmith is the economic hub of the Uthukela District Municipality, the banking sector is strong. Ladysmith boasts a strong and diverse manufacturing base offering several industrial areas, the largest being the Ithala Industrial Estate a short distance from the CBD. Similarly, the town of Newcastle serves as the regional centre for most of the economic development taking place within the Amajuba District Municipality and hosts a variety of well developed economic sectors as well as having potential for future growth. Although the Mittal steelworks and the Karbochem synthetic rubber plant dominate Newcastle's industrial portfolio, a diversity of manufacturing and commercial undertakings share in the region's success. Newcastle has become the national textile capital, with some 65% of all South Africa's textile manufacturing headquartered in the surrounding industrial areas, including the country's largest producer of school wear. Infrastructure Investment Apart from the ports, Provincial government has consistently invested large amounts of capital in infrastructure across the different nodes and corridors in the Province. Undoubtedly KwaZulu-Natal is undergoing the biggest investment in infrastructure programmes in its history. Central to KwaZulu-Natal's logistics development is the construction of the state-of-the-art King Shaka International Airport. The facility is situated about 30 kilometres north of Durban\'s city centre. The second step of this development will be the Dube TradePort, with full customs and excise facilities and bonded areas. In the future, the new dual freeway road corridor between Durban and Richards Bay will stimulate growth by effectively linking to the two ports. Further development of the transport corridor, linking Durban to Gauteng, the inland economic heartland, means that Durban can supply Gauteng with a variety of manufactured goods. The overall aim is to integrate air, land and sea transport. The multibillion-rand initiative will also contain commercial developments such as hotel and conference facilities, as well as service activities, residential elements, and a resource centre focusing on training workers to international standards. In the best-case scenario, the Dube TradePort will increase KwaZulu-Natal's contribution to the national gross domestic product (GDP) by R 20,5-billion which will result in the increase of fixed investments (R 6,9 billion) and the increased government revenues and taxes R 4,3 billion. It is estimated that about 270 000 jobs will be created directly and indirectly due to this project. (Department of Transport, KwaZulu-Natal Provincial Government, 21 October 2008). The Dube TradePort and the new international airport at La Mercy are predicted to begin operations by mid-2010. Extending the life of Perishable Goods The perishable-goods sector of the economy will benefit directly from the Dube TradePort. Produce will be transported at sea level instead of through Gauteng's OR Tambo International Airport at an altitude of about 2 000 m, which will extend the life of fresh produce. The port will include a cargo terminal and a perishables centre with direct air-side access providing a cold storage, a courier and a paid facility for the rapid export and import of time-sensitive products. The transportation of perishable goods will be aided by the Dube TradePort's agricultural export zone, which will be beneficial for exporters of high-yield, time-sensitive, air-freighted horticultural produce. The Agri-Zone comprises 80 ha of land to be used for the cultivation of farming products and the provision of facilities designed to promote agricultural production and export in the region. Attracting Developers The Dube TradePort is also attracting developers to the province. From new locomotives to the upgrading of strategic rail links and the building of new stations, road restoration as well as the increasing port capacity, mutual advantage can be derived from private public partnerships in these opportunities. 2010 FIFA World Cup The FIFA World Cup™ in June/July 2010 will bring to South Africa one of the biggest single sporting events in the world. Durban will host six games and one semi-final. The eThekwini Municipality has established the Strategic Projects Unit and 2010 Programme to drive and co-ordinate all strategic initiatives in the city as well as all the projects required to fulfil the City's hosting obligations. A key component of the business plan is the iconic Moses Mabhida Stadium in the heart of Durban, which a world class multi-purpose stadium in the making for the World Cup and beyond. Iconic Moses Mabhida Stadium Named after Moses Mabhida, a former General Secretary of the South African Communist Party, the new stadium complex includes an adjoining indoor arena, sporting museum, sports institute and a new transmodal transport station. The design of the stadium is characterized by large archways resembling the South African flag. The arch consists of 56 separate 10-m pieces, is 106 m high, weighs 3 500 t and has a high-tech cable car designed to take visitors to a viewing platform at the highest point. The high-tech cable car will be shipped from Italy and has the capacity to transport 25 people 
to the viewing platform at the apex of the 2 900-t, 106-m-tall steel arch over the stadium. The capacity of the stadium is set to comprise of: • 70 000 spectator seats • Demountable seating will be removed to reduce the capacity to 54 000 post 2010 in legacy mode. • 50 percent of the seats will be accessible from the main entrance while a 150 suites with housing ability totalling 7 500 set to cover a range of hospitality options. • There are plans and allocations to increase the capacity of the stadium to 84 000 seats in the future to further accommodate major events such as Olympics. Since the start of construction of the stadium two years ago, about 3 000 direct jobs have been created. Some 8 000 t of steel have already been used in the construction of the stadium, which is scheduled for completion in October 2009. For the provision and successful accomplishment of this development, the allocated budget amounts to R1, 83-billion. (http://www.sa2010.gov.za/) "The benefits of the World Cup will reverberate through the city long after the last whistle has been blown," said Julie-May Ellingson, head of Durban\'s Strategic Projects Unit and of the city\'s 2010 programme. "Durban will be positioned as the sports and events capital of Africa and a world class city with the infrastructure and capabilities of hosting international events". The construction of the stadium means that Durban will be one of the few African cities able to host most of the Olympic disciplines within a single sporting precinct. This will bring economic benefits, including job creation, training and skills development, and will also attract investment, said Ellingson. In addition, smaller sporting hubs are to be established around the identified training venues, which are located in previously neglected parts of the city. Stadia infrastructure development is also occurring in four district municipalities: Amajuba, Ugu, Umgungundlovu and uThungulu. Transport Infrastructure The projects under way for the World Cup have served as the main catalysts for the development of transport infrastructure in the province. Road, rail, air and marine have been integrated in an effort to boost economic growth in KwaZulu-Natal, with an emphasis on incorporating previously marginalised communities into the urban framework. The city of Durban is planning a number of transport upgrades, as well as redesigning and upgrading major roads and intersections. The goal is to create a more internationally friendly travel destination as well as a more liveable city for residents. Developments include: Public Transport Lanes Public transport lanes are being created and designated on the southern part of the iNkosi Albert Luthuli Freeway (M4) as well as on the N3 motorway to free up traffic and speed up general mobility. The City of Durban's philosophy is to promote public transport over private and as such dedicated public lanes are being implemented where appropriate. The Inner City Distribution System The People Mover buses are attractive buses with large windows which travel along two designated routes within the city linking the beachfront to the CBD as far as Victoria Street Market. Departing every 15 minutes between 06:00 and 23:00, the wheelchair-friendly 'People Mover' already offers a safe, regular service to 30 000 people per month. The 'People Mover' service will be expanded into a broader public transport inner city system, with large sections of travel in dedicated bus lanes. The service will cover the city from the beachfront through to Warwick Junction and from Margaret Mncadi Road through to the Moses Mabhida Stadium. Second phases will extend into the Berea, Riverside and Umbilo, with high capacity links into the Umlazi, Chatsworth, KwaMashu, Inanda, Clermont and Pinetown areas. Warwick Junction Infrastructure Warwick Avenue is the entry point for commuters to the city centre and for traders wanting to meet their needs. Every day hundreds of buses, taxis, and trains enter and leave the area bringing and taking many workers to the centre, as well as thousands of visitors, shoppers, and informal traders. This major transport hub is being revamped and restructured, to become a multi-modal transport precinct with better safety and efficiency, plus improved access. The first projects to be implemented are as follows: • A flyover will reroute traffic so that mainly buses or taxis will be allowed through Warwick Junction. The inbound flyover will be completed by December 2009. • Public transport ranks and pedestrian facilities will be enhanced, • Warwick Mall which will straddle the railway lines at Berea Station, introduces a vast new retail element to the Warwick Junction eThekwini Municipality Strategic Projects unit head, Julie-May Ellingson referred to the Warwick Triangle viaducts as, "the most important transport project in the city in the last 20 years". Road Network CCTV Monitoring and Surveillance This system will be used to monitor security and traffic incidents in the city so that appropriate action can be taken. Road Traffic System A solar-powered LED traffic light programme is currently being developed Non Motorized Transport The city is developing pedestrian and cycle paths in the city. Notwithstanding these projects , further afield other investment in transport infrastructure is underway. * the R350 million P700 Corridor from Richards Bay to Ulundi will reduce the distance between Ulundi and Richards Bay * the R300 million P577 from Mtubatuba to Hlabisa and Nongoma, and * the construction of the R260 million Nsezi Bridge on the John Ross Highway near Empangeni, which is 1,2 kilometres long and the longest bridge in South Africa is scheduled to be completed in 2010. The Enseleni floodplain, on which the bridge is situated, is an environmentally sensitive area. Environmental factors have been taken into consideration throughout the course of the project, including the hippopotami living near the building site and the fact that the site is home to a variety of flora and fauna. Grassroots Development KwaZulu-Natal has prioritised the development of rural road networks, aimed at integrating previously marginalised communities into the urban framework. The project aims to stimulate economic activity and create job opportunities for emerging contractors and suppliers. Over R2 257-million has been invested in the African Renaissance Roads Upgrading Programme (Arrup), which has promoted the participation of emerging Vukuzakhe contractors in the upgrading of eight major rural road transport corridors and one urban transport corridor in KZN. The Zibambele Road Maintenance Contract System is a similar initiative, involving the employment of poor households by the KwaZulu-Natal Department of Transport to maintain rural roads in the Province. Zimbambele households maintain road drainage systems, ensure roadside visibility, maintain the road surface and clear the roads of litter and noxious weeds. A total of 37 586 Zimbambele contractors were appointed earlier this year to maintain 23 638 km of rural roads. Strategic Bridge City Of note in the development of transport infrastructure in Durban is the development of Bridge City. A new town centre is being created 17 kilometres from Durban city centre, bridging the communities of Phoenix and Inanda, Ntuzuma and KwaMashu (INK) and linking them into the urban system. Located on the well known KwaMashu Highway strategic access between Bridge City, KwaMashu and the Phoenix Industrial Park will be provided. The mixed use node will house major retail activity, civic buildings, commercial business and easily accessible transport infrastructure. A railway station is planned to be built below the two-level shopping centre that will allow people to embark and disembark into and through the shopping centre. Above the shopping centre, 750 residential apartments will be built The centre is due to open its doors in October 2009 together with eThekwini Municipality's new bus and taxi rank (located adjacent to the shopping centre and the future rail station). The bus/taxi inter-modal facility is expected to accommodate approximately 100 000 people per day and 40 000 in each of the morning and afternoon peak periods (3 hours each). The new commuter station and rail link within the transport precinct will provide direct access between Bridge City and all the major metropolitan areas of KwaZulu Natal. The rail station is due to be opened in December 2011. A Competitive Economy The government and business people of KwaZulu-Natal are committed to building a Province capable of meeting the challenges of the 21st century, which means having a modern and competitive economy. The Province is second only to Gauteng in terms of its percentage contribution to South Africa's GDP. Although one of the Province's strengths is that it has a diversified economy, four key sectors have been identified as the drivers of economic growth in the Province. These are:  Services sector, including financial, social, transport, retail and government.  Agriculture and agri-industry  Industry, including heavy and light industry and manufacturing.  Tourism, including domestic and foreign tourism. Transforming lives The finance, real estate and business services sectors contribute greatly to KwaZulu-Natal's economy. Providing basic social services to all households is an important part of socio-economic growth in the province and currently social service sectors showed the most growth in employment numbers in South Africa. According to President Zuma in his State of the Nation Speech in June 2009, "It is about transforming our cities and towns and building cohesive, sustainable and caring communities with closer access to work and social amenities, including sports and recreation facilities". Socio-economic growth is about creating cohesive new living spaces for people and the Cornubia development, situated on a 1 200-ha greenfield site north of Mount Edgecombe, will do just that. Cornubia involves a R4,6-billion investment in roads, bridges and housing for more than 100 000 people and will create as many as 100 000 jobs. The development will deliver houses at scale and near to jobs, schools and clinics. The private-public partnership between property development business Tongaat Hulett Developments and the eThekwini municipality is the largest multi-land-use development in South African history, and, once completed, will generate R250-million. Swelling Real Estate Development As a consequence of the excellent prospects, a high demand is evident for industrial and commercial land in proximity to the Dube TradePort. Together with this, the demand for homes is moving even further north. Substantial residential developments actively being marketed in the region include: Simbithi, Blythedale Coastal Resort, Seaton Delaval, and Brettonwood. Ballito is also growing fast and has its own schools, hospitals and major shopping centres destined for major growth. Royal Palm Estates is one of the largest new developments on the North Coast of KwaZulu-Natal, with phase one spanning an area of over 700 hectares. This first phase includes a 380 hectare residential estate (Palm Lakes Residential), a 47 hectare office park (Palm Lakes Office), and a further 280 hectare corporate park (Palm Lakes Corporate). At Simbithi Eco-Estate between Ballito and Salt Rock, some 30 minutes from the new King Shaka Airport at La Mercy, total potential land sales are in excess of R800 m, which will transform into total land and building value at approximately R6 bn. A fair share of buyers have bought apartments as holiday homes, triggering a domestic market. When complete, the 430 ha estate will include a wellness centre, along with a golf course and equestrian site. According to Mark Taylor, CEO of developers, the eLan Croup, the company believes \"very passionately in the growth potential of the KwaZulu-Natal North Coast.\" The Elan Group is involved in a development at another \"mega resort,\" Blythedale Coastal Resort, within close distance of the Hluhluwe & Umfolozi Came Park, the St Lucia Wetlands Park, Kosi Bay and Cape Vidal. A poverty-stricken rural community is the new part owner of the R10-billion Blythedale Coastal Resort, which was launched earlier this year. After a decade of squabbling over a land claim, the Dube community on the KwaZulu-Natal North Coast secured a 20% stake in the luxury resort, to be built on their ancestral land. As part of the settlement reached in January, the state bought the land on behalf of the 687 families for R 200-million, of which R 50-million will be given to the community to develop itself. Blythedale Hills will provide more than 1 000 social and affordable housing units. Low-income earners and the wealthy will live together on the upmarket, 1000 ha estate, with its boutique hotel, spa, an 18-hole golf course and swimming pools. Houses, ranging in price from R42000 to R20-million, will have similar decor and style, and entry-level units will be government subsidised. Other proposed facilities include a shopping centre, wellness centre and several schools. "We are so happy to be a part of this development... this is going to be a huge benefit... as a community we can now see where we're going," said community representative Musa Dube. Mark Taylor, éLan Group chairman, said the agreement was an example of what could be achieved if everyone worked towards a "common goal". The development was expected to create 80000 temporary jobs and 10000 permanent jobs. These developments are in addition to various other private sector investments in major economic centres such as Durban, Pietermaritzburg and Richards Bay. After some delay, work on the Durban Point Development Area has recommenced; a project which will add prestige to the city. This location, which extends from Bell Street to the harbour and from the beachfront to Point Road, includes uShaka Marine World, but there is still another 45 ha of precincts to be completed. The regeneration of old buildings and upgraded infrastructure has already improved the area. The eThekwini Municipality also proposes to extend the Central Beachfront promenade from uShaka Beach to Country Club Beach and to redevelop facilities at Addington Beach, New Beach, Dairy Beach and the area around the existing XL Restaurant as well as to upgrade the Mini-town facility. The national Government Urban Development Zone (UDZ) tax incentive has been extended by five years from 2009 to enable the private sector to play an increasingly significant role in assisting with the development of South Africa's inner cities. For the refurbishment of existing buildings, investors are eligible to receive a 20% tax deduction in the first year of earning income, plus an annual depreciation of 20% over a four-year period. For new developments, this incentive offers a tax deduction of 20% in the first year, plus an annual depreciation of 5% for the next 16 years. This ultimately leads to a substantial subsidy that should stimulate the inner city's property sector. Already investments valued at a massive R1 billion have been pumped into Durban\'s inner city Urban Development Zone (UDZ), impeding decay and contributing to the restoration of the city\'s high-profile business and residential status. The eThekwini Urban Development Zone consists of the Durban CBD, including parts of Walter Gilbert Road. Successful developments under the scheme include Albaraka Bank and the Standard Bank regional offices at Kingsmead Office Park, the ABSA building, the JBS building, housing a Mr Price shop, and the Olwandle Guest House in Stalwart Simelane Street, General Motors Dealership on the corner of Prince Alfred Street and Old Fort Road, Himalaya House at 273 Yusuf Dadoo Street. Advanced Information Communication Technology Durban is a leader in information communication technology with good IT infrastructure, including modern telecommunications and a sub-sea cable connectivity to the Internet. The Smart City of Durban intends to be the leading African city in the provision of affordable, high quality, broadband access to its citizens, the business community and visitors. Construction of the new Seacom undersea fibre optics cable along the east coast of Africa, including land-based infrastructure, and laying of the cable under the ocean floor, has been completed and operation is set to begin. The landing station in South Africa is at Mtunzini, near Durban, on the north coast. Neotel, South Africa's second national operator, and Seacom, the developer of the private cable, which will connect South and East Africa to Europe and India, have agreed to commercial terms for the partnership of landing the sea cable system in South Africa. Ajay Pandey, MD, Neotel said that through the partnership, Neotel will own the cable landing station and all facilities within the South African territory. The terms of the agreement ensure that the operation of the cable will meet current and future regulations, in line with the Electronic Communications Act of 2006. Neotel will operate the facilities on an open access basis. Neotel and Seacom believe that such a policy will stimulate the South African international bandwidth market and make available affordable bandwidth to South African customers. Broadband is about dynamic media transfer, and it is instantaneous. The bandwidth that it will bring to the continent could facilitate development in education, healthcare, conservation, as well as significantly lowering the cost of doing business for companies. Niche Agricultural Production As KwaZulu-Natal is South Africa's best watered province; it has a larger area of high quality agricultural land than any other province, and it is the national leader in several agricultural products. The Midlands area between Pietermaritzburg and the Drakensberg is the heart of this high quality agricultural area concentrate on vegetable, dairy and stock-farming. The KwaZulu-Natal coastal belt yields sugar cane, wood, oranges, bananas, mangoes and other tropical fruit. Another major source of income is forestry, in the areas around Vryheid, Eshowe, Richmond, Harding and Ngome. Attempts are being made to boost the Province's enormous potential in agriculture into competitive advantage by: • Utilising all 590 bio-resource regions to produce timber, vegetables, fruit and meat products for export. • Reducing reliance on imported foods and bringing down food prices. • Moving subsistence farmers upwards into first economy. While prices of generic agricultural commodities continue to decline, those of niche products are on the increase. KwaZulu-Natal offers plenty of opportunities in range of products from essential oils to biodiesel from timber, sugar cane or coconut or palm oil nuts. Enterprise iLembe, the economic development arm of the iLembe District Municipality, is working with The Stables Wine Estate, a wine farm located in the KwaZulu-Natal midlands, to promote the north coast area as a new wine farm destination. The Stables Wine Estate consists of 27 hectares of vines - eight in Nottingham Road and 19 in Greytown. The wines being produced from the grapes of these vines have already won medals, proving that quality wines can be produced in KwaZulu-Natal. The development of a wine industry in KwaZulu-Natal offers substantial employment to the region, in both agriculture and tourism. Manufacturing Sector- Robust and resilient According to a report from a recent workshop hosted by Deloitte in Durban, "The manufacturing sector in KwaZulu-Natal is robust and resilient, and is facing the global economic downturn head-on, confident of emerging from the crisis stronger",(March 2009). KwaZulu-Natal\'s diversified manufacturing sector is the second largest in the country, after Gauteng Province. The manufacturing sector is geared for export, with nearly a third of South Africa\'s manufactured exports being produced in KwaZulu-Natal. According to the provincial government, manufacturing is the biggest contributor to the province\'s gross geographic product (GGP). The province has serious, globally competitive manufacturers with original designs and great components. The largest manufacturing industries are the automobile and component sector, pulp and paper products, chemicals and petrochemicals, and food and beverages. Automotive Development Programme In order to support the motor industry, details of a motor vehicle development programme that aims to boost local production to 1,2-million units a year by 2020 was released in September 2008. The automotive industry is the largest and leading manufacturing sector in the domestic economy. The new tariffs are meant to protect continued local vehicle assembly. Besides having the huge Toyota manufacturing facility located at Prospecton, south of Durban, the region benefits substantially from an increasing number of automotive suppliers locating in KwaZulu-Natal. Other vehicle manufacturers include MAN Truck and Bus SA, Volvo Trucks and Bell Equipment. More than 50 major automotive component suppliers are located in KZN, with 18 of them being secondary suppliers who provide individual components or raw materials to the manufacturers of components or sub-assemblies for the motor assembly plants. Value-added support aims encourage increasing levels of local value addition along the automotive value chain with positive spin-offs for employment creation. The industry generates strong linkages with: • Input industries such as aluminium, chemicals, electronics, leather & textiles, plastics, steel, machinery and equipment, • Service industries such as engineering, logistics, tooling, • Others such as financial, wholesale & retail, advertising. This sector is supported by the ports, which provide a sound logistical platform for manufacturing operations dependent on either inbound or outbound seaborne freight. The Maritime Vessel Construction and Repair (MVC&R) sector, also known as ship building industry, is vast and fast evolving. In recent times, Shipbuilding has changed from a \"heavy industry\" to become a capital and technology intensive activity. Mining Resources The mining sector which includes coal, titanium dioxide, zircon along with iron, steel and ferroalloys is important. KwaZulu-Natal has an abundance of untapped resources to stimulate the economies of the northern part of the province. "Mining in smaller towns of the province will be a major source of job creation and will serve as a catalyst for economic growth and development in these areas," says Zamo Gwala, CEO of Trade and Investment KZN (August 2008). There are many opportunities for small businesses in value added initiatives. Miranda, the mineral exploration and investment holding company, Sesikhona Kliprand Colliery project is the first in its coal pipeline in KwaZulu-Natal to move into the production phase. \"The award of our first mining right will unlock value at Sesikhona and move Miranda into a revenue producing exploration company with positive cash flows,\" said Miranda CEO Ron Nel (March, 2009). Leading Tourism Destination Despite its distance from the affluent first world markets, South Africa ranks within the top 30 tourism destinations in the world. KwaZulu-Natal is now the market leader for domestic tourism in South Africa, as well as number two in term of international tourism. The Province has great accommodation facilities, wonderful leisure and recreation opportunities, a rich history and diverse cultures. Many interesting sites have a colourful history of heroic people, struggles and wars represented in numerous battle sites. The Durban International Convention Centre (ICC) remains the best conference centre in Africa and is considered to be amongst the top 10 worldwide. Since its opening in August 1997 the ICC has contributed as much as R 6 billion to the local economy. An ICC conference delegate survey done in October 2008 by Tourism KwaZulu-Natal, shows that on average delegates spend R6 400 per conference and that 47% of those polled said that they were "extremely likely" to return to the city on holiday with in five year period. The ICC's expansion into an entertainment arena that has been especially designed for concerts, sports such as wrestling, ice skating shows and exhibitions will bring new benefits. Set apart by extensive sections of undeveloped coastline, many investors have taken note of KwaZulu-Natal. Those looking for development potential should consider the province\'s South Coast and game reserves, as well as Durban\'s CBD where a number of hotels require upgrading, and there is a necessity for new ones. There are currently a number of new hotels and a number of guesthouses at various stages of development in the province in Richards Bay, Durban, Hluhluwe, Umhlanga, Ballito and Bergville, as well as a hotel scheduled for the new King Shaka International Airport. On the cards for KwaZulu-Natal are accommodation facilities \"within shopping malls and connected to beach facilities\". With the means to invest anywhere in the world, IFA Hotels & Resorts\' decision to invest in the South Africa and the Indian Ocean region was prompted by factors such as a well developed transport infrastructure and the strength of both domestic and international tourism. Further, the developer expects tourism in KwaZulu-Natal to expand rapidly. As such an investment of US$ 250m by IFA Hotels & Resorts into the new Fairmont Zimbali ensures that a property of the highest international standard will be delivered. The Fairmont Zimbali will feature an ultra-luxurious resort hotel, a championship Gary Player designed golf course with clubhouse and golf academy, full-service Willow Stream Spa, Signature Beachfront Villas, Golf Chalets, Apartments and Villas, as well as a Fairmont Heritage Place Private Residence Club. The Tusk Umfolozi Casino, in Empangeni, in KwaZulu-Natal is relocating to Richards Bay, with bigger and better facilities by Peermont, the gaming, hotel and entertainment group in 2010. The relocation and expansion of the casino, which currently does not have a hotel, was decided on after a market research and feasibility study was done on the Richards Bay area to determine the practicability of the relocation. The project is valued at approximately R 220-million and will consist of the new casino, a hotel and a 400-seat conference centre. The casino will have 300 slot machines, 16 tables, and a Metcourt hotel comprising of 80 rooms and suites, a restaurant and a show bar. Peermont chief commercial officer Mark Jakins says that the Richards Bay region is currently undergoing rapid economic development which, the company believe will strengthen sustainable demand in the years ahead for the expanded hotel, gaming and conference facilities in the area. Further inland, there are plans for developments at wildlife-rich Jozini Dam along the Elephant Coast, while a public private partnership process is being implemented by KZN Wildlife at Royal Natal National Park in the Drakensburg. Tourism has been identified as another means to transfer wealth into township areas in Pietermaritzburg by Msunduzi's municipal manager, Rob Haswell. Msunduzi is also the city of Nelson Mandela, Harry Gwala, and Mahatma Ghandi which provides a strong liberation heritage that will be a great tourism product once it has been properly packaged. The city is also looking at ways to further capitalise on the major international events it hosts: the Midmar Mile, Duzi and the Comrades Marathon. The aim is to increase the amount of time people spend in the town. Zulu culture and history forms a key part of the Province's heritage and the Zulu monarchy of KwaZulu-Natal is the monarchy specifically provided for in South Africa\'s Constitution. As such KwaZulu-Natal's history and culture has not been forgotten in the face of progress. The ancestral burial ground of the early Zulu kings in eMakhosini Valley of the Kings in Ulundi is receiving a multi-million rand facelift which will put it in a position to attract scores of local and international tourists. The centre would include a magnificent conference centre, a restaurant, viewing tower and an amphitheatre. The aim of the centre is to conserve ancestral burial places, historical battlefields and other sites with historical and cultural significance. The KwaBulawayo Tourism Development project was identified as a means for uplifting the local communities in the culturally rich Umlalazi region of the uThungulu District Municipality. The region is home to King Shaka\'s KwaBulawayo Military Capital, and is recognized as being one of the key sites of Zulu heritage. Graphic visual and aural heritage information, plus displays and models, will be provided. In order to contribute to tourism growth in the region, the Development Bank of Southern Africa (DBSA) recently announced a new strategy designed to prioritise tourism projects in South Africa and the SADC region. The DBSA says it will only consider medium to large sized tourism projects, which equates to an investment amounting to more than R20 million in South Africa or US$10 million in SADC countries. Environmental Challenges Climate change is receiving greater focus globally with corresponding imperatives for South African industry to comply. The South African Chamber of Commerce and Industry, April 2009 commented that in terms of present industrial and commercial activity, there is a trade-off between growth and development and those measures designed to mitigate the impact of economic activity on the environment. Environmental consultants are developing innovative frameworks to assist local and provincial government primarily in the implementation of stringent environmental legislation, which will particularly affect infrastructural development in the KwaZulu-Natal region. This is necessary, given that the province, which is rich in biodiversity, has become increasingly vulnerable to the effects of global climate change. Investment is Key to Growing the Economy No analysis can capture the true extent of what might happen in the 2010s. Closely linked to the Dube TradePort, is the province's inward investment and trade promotion strategy, which is driven by the KZN Department of Economic Development and Tourism, and Trade and Investment KZN (TIKZN). Increasing the levels of Foreign Direct Investment (FDI) into the province is the most direct and effective way of stimulating economic growth in the short to medium term, especially if this investment is in the form of fixed investments. Government's spending on fixed investment, will also be focused on areas which, are growing or have the potential for economic growth, in order to attract Private-sector investment, stimulate sustainable economic activities and create long-term employment opportunities. The province has been elevated to the status of being a major actor on the international stage, through bilateral agreements with many countries such as China, India, Spain and Japan. KwaZulu-Natal has established three partnerships in China. Relations with Belgium have been strengthened since 2004. In 2005, co-operation with India was established through the signing of a memorandum of understanding (MoU) with the province of Punjab. KwaZulu-Natal is currently working on strengthening relations with Baden-Württemberg in areas such as social development, education, sport and recreation, 2010 FIFA World Cup and tourism. More than 4000 jobs will be created when a company from Vietnam opens its first African furniture manufacturing plant in the uMshwathi area outside Pietermaritzburg. Navifico, a furniture manufacturing company, wants to invest more than R100-million in the province. Speaking after meeting a delegation from Navifico, Economic Development MEC Mike Mabuyakhulu said the investment would be a major boost for the province. Relations built with Mozambique and other neighbouring states have been strengthened, particularly in the areas of commerce, health and co-operation between security services. The focus for the next five years will be to build on the firm foundation laid over the past five years. This will be achieved by pursuing three main objectives: * to continue strengthening relations that have been enshrined in formal co-operative agreements with a specific focus on value-adding programmes that directly contribute to our growth and development efforts * to support the national foreign policy direction, in this regard playing a pivotal role in African Renaissance and strengthening African Renaissance efforts on the African continent * to continue to expand the drive of economic diplomacy that South Africa has commenced, since 2006. Investment in KZN is encouraged by grants and low interest loans available from various sources. The province has established the KZN Growth Fund for projects in excess of R30m, while the Ithala Development Corporation funds developments specific to the province. Another avenue of aid, Gijima KZN, provides assistance with skills development, government and private sector networking, and applications for financial assistance. Government incentives applicable to the whole country are available in the form of programmes from the Department of Trade and Industry. In the foreword to a new book called Africa\'s Greatest Entrepreneurs, Sir Richard Branson says that across Africa the spirit of entrepreneurship is very much alive, leaving him \"constantly amazed by the incredible energy and determination and innovation coming from entrepreneurs across the continent.\" Entrepreneurs help to shape changes in the economic landscape of the continent, bringing much-needed services to marginalised communities, creating spin-off small business opportunities, providing jobs in poverty stricken areas, and up-skilling the workforce

The Concise Oxford Dictionary defines the word 'initiatives both the ability to initiate or begin something as well as a fresh strategy intended to resolve or improve something. KwaZulu-Natal is once more on the move and the various stakeholders in the Province; from government departments to civil society are not afraid to try new approaches in their drive to succeed. Considering the many challenges in the Province, both at a global and at a local level; the ability to find fresh strategies at every level of business is particularly relevant. Millennium Development Goals Forming the basis of socio-economic development in the Province are the eight Millennium Development Goals, which range from halving extreme poverty to halting the spread of HIVAIDS and providing universal primary education, all by the target date of 2015. The goals form a blueprint agreed to by all the world's countries and all the world's leading development institutions. The consensus is that 'business unusual is needed to get on track in achieving the much acclaimed Millennium Development Goals, through new and innovative approaches and ideas. The United Nations Secretary-General, Kofi Annan, stated, 'We will have time to reach the Millennium Development Goals - worldwide and in most, or even all, individual countries - but only if we break with business as usual. We cannot win overnight. Success will require sustained action across the entire decade between now and the deadline. It takes time to train the teachers, nurses and engineers; to build the roads, schools and hospitals; to grow the small and large businesses able to create the jobs and income needed. So we must start now. And we must more than double global development assistance over the next few years. Nothing less will help to achieve the Goals". The need to try new approaches was also referred to by KwaZulu-Natal MEC for Finance and Economic Development, Dr Zweli Mkhize in his address at the Local Economic Development Conference in November 2007. He stated, "South Africa's transaction to democracy has given its citizens the power to influence and direct the direction of this country. This signals the need for a new approach: an approach which requires today's leaders to define development priorities, plan for the attainment and collaborate in their implementation. With the millennium development goals in view, the country needs to raise its economic growth rate to an average of 6% between 2010 and 2014, and to halve the unemployment rate by 2014. Of necessity, a transparent and high-quality economic governance approach is the key to a healthy business environment. Provincial strategies take their cue from - and are supportive of - national policies and goals, such as the Accelerated and Shared Growth-South Africa (ASGISA) programme. Specific KwaZulu-Natal strategies include the Provincial Growth and Development Strategy (PGDS), the Provincial Spatial Economic Development Strategy (PSEDS), and the Provincial Industrial Development Strategy (PIDS). At the local government sphere, the Integrated Development Plans (IDPs) and Local Economic Development Plans (LED), complement and support these provincial strategies. The different initiatives in action are evident in government departments and businesses. The provincial priorities in KwaZulu-Natal consist of: • Strengthening governance and service delivery • Sustainable economic development and job creation • Integrating investments in community infrastructure • Developing human capability • Developing a comprehensive response to HIVAIDS • Fighting poverty and protecting vulnerable groups in society. KwaZulu-Natal's Economy KwaZulu-Natal has historically been a key component of the southern African economy. With the national and provincial governments providing a sound foundation, which is crucial for investment and growth, KwaZulu-Natal has the basis for success. Notwithstanding this base, the Province has a well-developed infrastructure, including an excellent roadrail system with access to two deep water ports providing easy links to Mozambique, East Africa, Asia and Europe. There is widespread availability of energy, water and sewerage utilities and the telecommunications system links to regional and global markets. KwaZulu-Natal has the second biggest economy in the country, which has developed as a logical step to the many advantages that the Province offers, over the past years. KwaZulu-Natal's Contribution to the National Economy (Source: Trade and Investment KZN) In his State of the Province Address in 2008, KwaZulu-Natal Premier, Sibusiso Ndebele stated that the Province's economic development strategy aimed to; transform the structure of the provincial economy and narrow the gap between first and second economies; to increase investment; to build skills and capacity, to broaden participation in the economy; and increase competitiveness. Given its potential to stimulate economic growth across the board, infrastructure delivery will remain on the key focus areas of this government. Infrastructure expenditure by provincial government has more than doubled between 200304 and 200708 from a baseline of ZAR 2, 9-million to ZAR 6, 4-million and it alone will grow to ZAR 9, 8-million in 200910. Economic sectors KwaZulu-Natal's diverse economy consists of activity in a range of different sectors. The provincial government has identified four key sectors as drivers of economic growth. These are: Agriculture and agri-industry (including land utilisation mapping and giving particular attention to Land Reform).  Industry, including heavy and light industry and manufacturing.  Tourism, including domestic and foreign tourism.  Services sector, including ICT, financial, social, transport, retail and government. Some highlights of the economy include:  Lucrative agricultural production;  Largest sand mining and mineral processing operation in the Southern hemisphere;  The world's largest smelter;  Vast prime industrial land along the coast and further inland;  Good sized Business Outsourcing Processing market with the fastest growing call centres in Africa;  Stunning tourism opportunities from ranging from mountains to game-parks and beaches. The Information Communication Technology and Electronics (ICTE) sector has also been selected as a key driver on the basis of its potential to generate high-value knowledge intensive employment and promote wider social enterprise and social development. ICTE was also identified as the industry sector with the greatest potential to drive the long-term competitiveness of the provincial economy. A number of local electronic manufacturers such as Siemens, Altech UEC, and PFK Electronics are making their mark on the local and local marketplace with innovative products. KZN GROWTH FUND Although not linked to a specific sector, an important initiative devised by the provincial government to stimulate economic growth and employment creation is that of the KZN Growth Fund. The strategic objectives of the Growth Fund can be summarised as follows:  An intervention to enhance growth & development in KZN  Accelerate socio-economic upliftment via job creation  Create opportunities and promote effective BEE  Target productive infrastructure to crowd-in private sector investment into KZN  Enhance existing comparative advantages of the Province by focussing on: tourism, provision of bulk water supply, transportation and logistics and sector-specific infrastructure projects. The Gijima KZN programme is a European Union initiative which aspires to create an enabling environment by expanding business activity to all parts of the province, particularly in rural areas. These include socio-economic boosters such as tourism, clothing and textiles, crafts, wood products, logistics and communications technology. A number of beneficiaries across these sectors are beginning to reap the rewards of the grants e.g. • Muthi Futhi, an innovative agricultural co-operative in the Uthungulu District focuses on the cultivation, processing, packaging and marketing of medicinal plants. • Crosswind Business Projects serves the surrounding community with a variety of products, including its own maize meal and samp brand called Inkululeko (freedom in Zulu.) Small micro and medium sized enterprise To achieve the objectives of economic growth, South Africa's small micro and medium sized enterprise (SMME) economy has been actively promoted since 1995. SMMEs encompass a very broad range of firms, from established traditional family businesses employing over a hundred people (medium-sized enterprises), down to the survivalist self-employed from the poorest layers of the population (informal micro-enterprises) The KwaZulu-Natal Department of Economic Development has recently opened the One Stop Shop Business Support Centre to help Small Medium to Micro Businesses (SMMEs) to grow. SmartXchange is eThekwini Municipality's vehicle designed to build the city's ICT Cluster and grow the BEE SMME base. Since its inception in 2004, SmartXchange has invested heavily in building the technical and business capacity of the SMMEs and their employees to enable these companies to become nationally and globally competitive. Key to meeting the objectives of the ICT Cluster and SMME development are the creation of partnerships with big business. Co-operatives The co-operatives initiative in KwaZulu-Natal (KZN) was started in 2005 with an initial investment of R110-million. Since then over 3 200 cooperatives have received training from Further Education and Training (FET)colleges to develop skills required to draw business plans. The co-operative form of enterprise lends itself well to the African value of ubuntu as it allows members of the community to work together to in producing or offering services to other members of the community and other markets. Foreign Trade The composition of South Africa's foreign trade is typical of an emerging economy, with exports being dominated by resources-based and relatively low value-added commodities and imports primarily by higher value-added goods. Among non-gold merchandise exports, the top five categories are precious and semi-precious stones and precious metals, mineral products, vehicles and other transport equipment, machinery and mechanical appliances and electrical equipment, and base metals and articles thereof. Much of the growth in these categories, particularly growth of vehicles and other transport equipment, has been linked to the preferential market access South Africa enjoys under the African Growth and Opportunity Act (AGOA). KwaZulu-Natal's share of overall South African exports has remained constant over a 10-year period, at around 17 percent. There has been constant growth in provincial exports, with ore, slag and ash, aluminium products and products from the iron and steel sector amounting to more than 49 percent of KwaZulu-Natal's exports, while there has been a decline in exports of wood pulp, waste and scrap paper. The top five import product categories comprise machinery and mechanical appliances, mineral products, chemicals, vehicles, and original motor vehicle components. Export-focused manufacturing has been a strong growth area identified in KwaZulu-Natal. Manufacturing has shifted away from the more traditional textiles and assembly to higher value-added sectors, particularly those of chemicals and metal. A number of opportunities linked to a range of niche markets are also available in the KwaZulu-Natal. The need to develop the beneficiation of primary products in minerals, agriculture and fishing will add value to the economy. This push to beneficiate opens up many opportunities for emerging black entrepreneurs and investors alike. This trend demands new skills and provides local employment opportunities for graduates. KwaZulu-Natal's top export destinations are the United States, China, Japan, India, the United Kingdom, the Netherlands and Germany. Exports from the Province are set to increase with the construction of the new airport and the Dube TradePort. Growing cities A growing economy attracts people as such the role of cities in the global economy is changing. Cities and towns are expanding; as urban populations grow by 3.8 per cent a year, the world is undergoing an era of unparalleled urban transition. This growth is particularly visible in developing countries of which South Africa is no exception. Predictions are that urban areas will hold more than half the world\\\'s entire population within a decade. The quality of the locality is now an important criterion for investment decisions, in addition to costs, infrastructure and availability of skills. Of relevance is that well-managed cities are a pre-requisite for attracting investment, and are essential for national competitiveness. "Cities have a social infrastructure that facilitates contact between people and exchange information, where they have office buildings, international hotels, conference centres, prestige residencies and distinct architectural design. This social structure is supported by sophisticated transport and information systems", (www.socyberty.comwritersPrit ). The above definition may well be applied to KwaZulu-Natal's major cities of Pietermaritzburg, Durban, while others such as Richards Bay growing in statue. Smaller centres including Port Shepstone and Newcastle are also moving upwards. A New Metropolitan Pietermaritzburg's reputation is slowly changing from sleepy hollow to that of "City of Choice'. Since the re-instatement of Pietermaritzburg as the provincial capital, the city has done much to reinvent itself. Pietermaritzburg combines both style and vitality apart from a centre of governance, the city is a regional centre for impressive sports events, outdoor festivals, shows, education, and the arts. Until recently Pietermaritzburg which falls in the Msunduzi Municipality was under the jurisdiction of uMgungundlovu District Municipality. Msunduzi has recently been declared a metropolitan as it deserved recognition for its status as home to the capital city and as the power-house of inland KwaZulu-Natal. Msunduzi more than meets the criteria of the Municipal Demarcation Board to be called a metropolitan. These are as follows: Areas of high population density; Intense movement of people, goods and services; Extensive development and multiple business districts and industrial areas; A centre of economic activity with a complex economy; A single area for which integrated development planning is desirable and; Strong interdependent social and economic linkages between its constituent units. According to Municipal manager Mike Haswell, since its inception Msunduzi has continued to perform all of the power and functions designated to the district. While it was hoped that the new metro boundaries would be extended beyond the present municipal demarcation to include the neighbouring local municipalities, this has not occurred. Pietermaritzburg is now South Africa's smallest metro. A further review of the municipal boundaries is expected after the forthcoming national and provincial elections which will be held in 2009, and local elections in 2011. Economy Pietermaritzburg has a diverse economy with a robust manufacturing sector. Current economic activities include: Industrial: Aluminium, footwear, textiles, furniture, wood products, electronics, motor components  Agriculture: Timber, beef, dairy, sugarcane, citrus, exotic fruit, cut flowers  Business: Major service centre for the KwaZulu-Natal Midlands area, legal services  Tourism: Parks and Gardens, historical buildings and architecture, dams The past few years have seen the economy of the city becoming more buoyant. Since 2003 an unprecedented growth in economic activity has been achieved, with business confidence currently very high. The property and retail sectors have grown substantially; major recent developments include the Liberty Midlands Mall, the Golden Horse Casino and Hotel,"Motor City"- a zone of all the established motor dealerships and the Victoria Country Club Golf Estate. There are definite signs of a strong recovery in airport activity; the increasing number of passenger arrivals suggests a growing interest in the local economy. According to Clive Coetzee's April 2008 Economic and Business Report on Pietermaritzburg, Capital Expenditure increased from a quarterly average of ZAR 816 million in 2003 to ZAR 1.07 billion in 2007. This represents an average yearly increase of 7.8% from January 2003 to December 2007, which well indicates the sustained economic development and growth in the City. Business investment is a key driver of an economy and based on the growth rates of the demand for business finance it is possible to argue that the local economy has experienced significant rates of business growth and expansions. Examples include the recent construction of Toyota's ZAR 4, 5 million rand new forklift premises; the expansion of the Hulamin plant and Alltube's current ZAR 8 million investment in new plant and tooling in order to expand its market with a number of new products. Alltube aims to more than treble its local sales in 2008 while adding another 28% to product sold abroad. The vision of Mkhambatini Game Reserve developers is to create a 110 sq km game reserve ten minutes from Pietermaritzburg. The park's enormous competitive advantage over the established game parks is that visitors will be able to view rhino, elephant, buffalo, antelope and a variety of smaller predators at a convenient location. Coetzee's April 2008 report also states that the expanding local economy is evident in terms of the increasing number of households. Professionals declined by 34.50% per annum between 1996 and 2001, but from 2001 to 2007 have increased by 114.57%. Professionals are a key employment category that is synonymous with a burgeoning middle class and hence a positive future economic growth outlook. This is clearly indicative of a strong and healthy economy with an environment conducive to earn good earnings andor make good profits. Along with increasing number of households come potential consumers. In addition the capital's government wages will, on a limited scale, protect the Pietermaritzburg economy from any major downturn. The expenditure patterns or behaviour of government employees is fairly stable and predictable, thus contributing to the stability of the local economy. The growth in the economy has created a shortage of affordable and middle-income homes. This in turn has provided the trigger for the development of a ZAR 2 billion eventual small town on a 500 ha site near Ashburton incorporating 4 000 free-standing housing units and a 1 000 unit retirement village. Amdec one of South Africa's leading property development, investment and project management specialist firms, and plans substantial investments in Pietermaritzburg, Hilton and Howick during the next decade."There is huge potential in the midlands region and we have great confidence for its future. These developments will serve to assist in enhancing local economies, infrastructure and services," said Regional Director for Amdec Property Development Magnus McDowall. Amdec ranks as one of the country's biggest private property developers. The company has developed from its origins as an entrepreneurial family business into a national concern active in almost all sectors of property development with projects in the Cape, Gauteng and Eastern Cape. Amdec's first foray into the province will see a total investment in the area at an estimated ZAR 750 million over the next five to seven years. The economy of Pietermaritzburg is also bolstered by the diverse and interesting functions, sport and entertainment that take place in Pietermaritzburg on an on-going basis. The positioning of the City as the cycling capital of Africa is fast becoming a reality as road cycling, BMX and Mountain Biking are all taking place in Pietermaritzburg in February, March and April 2009. The Intaka Tech World's View Challenge is South Africa's first UCI 1.1 status series of events with the teams competing for a total prize cheque of R650 000 as well as points for the UCI Africa Tour leader board. The UCI 1.1 status ranking means that these events are the highest-quality events on the international cycling calendar. Pietermaritzburg and the KZN Midlands with its rolling hills, perfect altitude and close proximity to both ocean and mountains, makes it the ideal choice for major cycling events. The capital of KwaZulu Natal is fast becoming the cycling capital of not only South Africa but the entire continent. Durban The City of Durban, with a population of 3, 7 million people, offers much as one of South Africa's fastest growing urban areas. A previous winner of the United Nations Award for Best Managed City in Africa, eThekwini Municipality maintains effective control of the City's resources while steering its progress. Durban is emerging as a focal point for investment activity, which is being given momentum by the city's enthusiastic approach to the regeneration of the Central Business District. Mark Stewart, MD of BDO Spencer Steward (KZN) claims that "Less panicked by economic fluctuations, this burgeoning city has the potential to become one of the showcase cities of both SA and the continent."With a stable local economy poised for further growth Durban seems to be a city determined to make its presence felt on both the local and global stage"; Dube TradePort Central to Durban and the rest of the Province's logistics development will be the construction of the state-of-the-art King Shaka International Airport. The facility is to be situated about 30 kilometres north of Durban's city centre, in close proximity to the Indian Ocean. The new airport will be built, owned and operated by Airports Company South Africa (ACSA). The airport is being built to boost passenger capacity in Durban, as well as to allow bigger, new-generation aircraft, such as Airbus's A380 superjumbo, to land in the city. The Airport will include a four-million-passenger-a-year terminal, runway, air-traffic control tower, multi-storey, car park, fuel farm and related infrastructure. Construction of the airport began on August 24, 2007 and this is well progressing steadily. The total investment required for the airport, is about ZAR 2, 5 billion and the Development Bank of Southern Africa will provide ZAR 500 million in debt funding. Durban International Airport will relocate to King Shaka International, when it is operational. The new airport should boost tourism as there will be more international flights to our Province. The facilities will provide easier access to the wealth of attractions present. Clearly though, the effects of the airport will not only be in felt in the tourism sector but in trade. The second step of this development will be the Dube TradePort, with full customs and excise facilities and bonded areas. The Dube TradePort will be connected to the national N2 freeway and the busy R102, with a railway station alongside the site. In the future, the new dual freeway road corridor between Durban and Richards Bay will stimulate growth by effectively linking to the two ports. Further development of the transport corridor, linking Durban to Gauteng, the inland economic heartland, means that Durban can supply Gauteng with a variety of manufactured goods. The overall aim is to integrate air, land and sea transport. The multibillion-rand initiative will also contain commercial developments such as hotel and conference facilities, as well as service activities, residential elements, and a resource centre focusing on training workers to international standards. This exceptional project is expected to provide an outstanding environment for manufacturing, agro-industrial, logistics, transportation and e-commerce related activities. These measures will ensure that KwaZulu-Natal remains strong in transportation and logistics; contributing to the southern African economy for decades to come. The development will provide a boost for the participation of the southern African region and the entire African continent in the global economy. As a consequence a high demand is evident for industrial and commercial land in proximity to the Dube Tradeport. Together with this, the demand for homes is moving even further north. Substantial residential developments actively being marketed in the region include: Simbithi, Blythedale Coastal Resort, Seaton Delaval, Palm Lakes and Brettonwood. The Port of Durban The Port of Durban is an exciting hub of economic activity and the largest of South Africa's seven ports. The Port handles in excess of 31, 4 million tons of cargo a year, with a value in excess of ZAR 100-billion per annum - approximately 65 percent of the value of all cargo going through South African ports. According to Clive Coetzee's Economic and Business 2008 Report on Durban and eThekwini Metropolitan Area, harbour activity surged from November 2004 and has stayed at these higher levels throughout the period, increasing very moderately through 2007. The average monthly number of vessel moves increased from 355 in 2003 to 851 in 2006, representing a massive 140% increase for the period. The massive increase in the number of vessel moves is most probably due to the surge in imports experienced in South Africa due to the strength of the Rand and the strength of domestic demand during this time. Established export-led businesses, such as the Toyota assembly plant, have invested heavily in expansion, significantly increasing the number of vehicles exported out of Durban through the Port. More than ZAR 3-billion has been set aside for investment in Durban Port's infrastructure since 2002 for improvements. The widening of the harbour mouth and deepening of Durban harbour will enable the Port to contend with the new generation of super-tankers. From new locomotives to the upgrading of strategic rail links and the building of new stations, road restoration as well as the increasing port capacity, mutual advantage can be derived from private public partnerships in these opportunities. The eThekwini's Municipality's Economic Development Department has recently spearheaded the formation of a maritime cluster. The maritime cluster will ensure that this sector consistently operates at the better end of international standards. Members of the cluster will work together and share views, plans and experiences for the benefit of the industry. The cluster includes shipping, boating, cargo handling, storage, transport and logistics. Support services, such as ship repairs, communication, pilotage, customs clearing, inspection services, and marine insurance are also covered. The Department's Acting Head, Shunnon Tulsiram, said: "The development and operations of the port and city are interrelated. To achieve a common vision for the sustainable development of the port and city in the future, and to ensure their successful coexistence, joint planning is essential. Urban development Zone Investment finance has been committed to Durban's inner-city Urban Development Zone (UDZ), which will assist in the arrest of urban decay and contribute positively to the restoration of the city's business and residential status. The past decay has been the result of the displacement of capital from the inner city to other urban areas and the suburbs. The eThekwini Municipality regards the investment turn-around in Durban as being indicative of the overall success of the UDZ incentive scheme in the city. Existing projects such as uShaka Marine World and the Point Development Project have had the effect of attracting further interest in areas outside the zone. Head of eThekwini Municipality's Strategic Projects Unit (SPU), Julie-May Ellingson, said, "The successful regeneration of Durban's CBD has been, and continues to be, a partnership between the private and public sectors and clearly indicates the confidence investors and developers have in our city. The city has received more than 350 enquiries from prospective investors since the inception of the scheme and forthcoming developments qualifying for the depreciation allowance will bring the total value to some ZAR 1,2 billion". Successful developments under the scheme include the new Standard Bank regional offices at Kingsmead Office Park, the recently launched ABSA building in Gardiner Street, the JBS building, housing a Mr Price shop, and the Olwandle Guest House in Stalwart Simelane Street, General Motors Dealership on the corner of Prince Alfred Street and Old Fort Road, Himalaya House at 273 Yusuf Dadoo Street, and Albaraka Bank at Kingsmead Office Park. The scheme, originally set to expire in March 2009, has been extended by five years to enable the private sector to play an increasingly significant role in assisting with the development of South Africa's inner cities. The extension of the scheme means that projects regarded as being under threat of the scheme's cut-off, will now qualify, while others in the pipe-line are set to proceed, giving further impetus to the city's regeneration. The city has welcomed the extension as a means of maximising investment and development in previously neglected areas Critical to the city's regeneration is the transformation of the depressed Warwick Junction area. The Warwick Junction Precinct Plan includes a ZAR 400 million private investment for the construction of the 22 000 square metre Warwick Mall, which will be complimented by an eThekwini Municipality contribution of a comprehensive 500-bay taxi rank. The project is to be developed by Warwick Mall (Pty) Ltd, a Durban-based Black empowerment company specialising in property. Company Chief Executive Officer, Mr Carlos Correia, said: "Warwick Mall, which will straddle the railway lines at Berea Station, is the catalyst for the entire precinct plan and introduces a vast new retail element to the Warwick Junction inter-modal transport node". Smartest City in Africa Durban also aims to become the Smartest City in Africa. The idea is to connect up all the citizens with free or affordable broadband in order to change the delivery of government services, business processes, education and people's access to information. Business unusual Business tourism focuses exclusively on the provision of facilities and services to the millions of delegates who annually attend meetings, congresses, exhibitions, business events andor who participate in incentive travel and corporate hospitality. The Durban International Convention Centre (ICC) and many of the other facilities and attractions beyond the city are attracting an increasing number of business delegates from around the globe. Having played host to the Tourism Indaba over a number of years Durban has proved that it is capable of handling the capacity and numbers associated with events such as these. The ABSA stadium, home to the Sharks Rugby team has also hosted a number of events ranging from rugby, to football matches and music concerts such as Sir Elton John and Celine Dion. Kingsmead Stadium is host to a large number of international cricket matches. Fifa World Cup The FIFA World Cup™ in JuneJuly 2010 will bring to South Africa one of the biggest single sporting events in the world. The statistics involved are impressive: a global television audience of 30 billion; a total of 3 million tickets sold; and 360, 000 international arrivals along with many possibilities. Durban as a host city will be given exposure to a global audience, tourists and potential investors, which budgets could otherwise not afford. Consequently the FIFA 2010 World Cup provides an unprecedented opportunity for Durban to showcase its business capabilities and prospects, tourism attractions, sport and leisure facilities as well as its lifestyle. Currently the World Cup is a catalyst for a range of infrastructural projects which in turn will provide a legacy for the Province beyond 2010. Former President of South Africa, FW de Klerk recently expressed his confidence in the event . "The 2010 World Cup is helping our socio-cultural development. I am very optimistic because everyone in South Africa wants the World Cup to be a success". The eThekwini Municipality has established the Strategic Projects Unit & 2010 Programme to drive and co-ordinate all strategic initiatives in the city as well as all the projects required to fulfil the City\\\'s hosting obligations. A key component of the business plan is the iconic Moses Mabhida Stadium which is currently under construction. This 70 000 seater stadium is centrally located within Kings Park Sporting Precinct and is expected to be completed in June 2009. The multifunctional stadium will accommodate a range of sporting and other activities. Beyond the stadium and its precinct, the city is also planning a number of transport upgrades, as well as redesigning and upgrading major roads and intersections within the city. In addition, smaller sporting hubs are to be established around the identified training venues which are located in previously neglected parts of the city. Another spin off is the change over from analogue to digital television transmission. South Africa needs to update its broadcasting capacity ahead of 2010. The country will switch to digital broadcasting from November 2010. And Beyond Durban It is not only the centre of Durban but the areas beyond its boundaries that are growing. Durban is definitely a multi-nodal complex; stretching across the Umhlanga Ridge, Gateway and the La Lucia Office Estate, the area is recognised as South Africa\\\'s fastest-growing commercial and residential property development region. Other major existing nodes are at Pinetown, Amanzimtoti, IsipingoProspecton, Hillcrest, and Westville. The construction of a new 35 000 m2 Westwood Shopping Centre in Westville well indicates the growth occurring in the suburbs. The ZAR 345-million construction contract is being undertaken by Grinaker-LTA Building, part of the JSE-listed Aveng Group. Bridge City The new 60 000 m2 Bridge City Precinct is an initiative by the eThekwini Municipality and Tongaat Hulett Properties to establish a mixed use node to serve the people of KwaMashu, Inanda, Ntuzuma and Phoenix. \\\"There is a railway station planned to be built below the two-level shopping centre that will allow people to embark and disembark into and through the shopping centre. Above the shopping centre, we also have plans to cater for about 750 residential apartments,\\\" said Crowie Projects director Fred Pietersen. The shopping centre is due for completion at the end of October 2009. Grinaker-LTA, along with its joint-venture partner Enza Construction, said that about one million bricks would be used in the project, together with 47 000 m3 of concrete and 5 300 t of reinforcing steel. Located on the well known KwaMashu Highway strategic access between Bridge City, KwaMashu and the Phoenix Industrial Park will be provided. The new commuter station and rail link within the transport precinct will provide direct access between Bridge City and all the major metropolitan areas of KwaZulu Natal. The rail infrastructure, which formed part of the bigger 650 000 m2 of high-density, mixed-use public private-partnership development, would provide an underground destination station serving 40 000 commuters a day, an inter-modal taxi, bus and car terminal will ease internal traffic congestion. The development represents over ZAR 4 billion in investments with as much as 25 000 much-needed permanent jobs created. Beyond this, other \\\'emergent nodes\\\' are identified at Hammarsdale and Cato Ridge. It is thought that Cato Ridge will become the \\\"Midrand\\\" of KwaZulu-Natal over the next decade and an integrated approach to the development of the Durban-Pietermaritzburg corridor is also essential. eThekwini Municipality is considering a number of plans from companies and groups. One plan proposes a housing development on one side of the N3 from Pietermaritzburg to Durban, at Cato Ridge, and an industrial development on the other. eThekwini Mayor Obed Mlaba has also stated that Durban needs an inland dry port and that Cato Ridge is an ideal venue for such a development. Mauritius-based Safal Investments, which owns steel-coating facilities in eastern and southern Africa, plans to build a US$100-million plant in Cato Ridge, is the company\\\'s third investment in the country and will create about 300 jobs for the local community. Safal South Africa chief executive Ronnie Graham stated that the Cato Ridge plant would produce 150 000 tons of coated steel a year in its first three to four years (Business Day, 2007). Richards Bay Richards Bay is one of the fastest growing industrial areas in the Province and the centre of operations for South Africa\\\'s aluminium industry. The modern Port of Richards Bay is South Africa\\\'s premier bulk cargo handling port and is well situated to serve the KwaZulu-Natal and Mpumalanga coal fields and has expanded into other bulk and break bulk cargo, including timber and granite. The port handles in excess of 85 million tons of cargo per annum and is one of the few South African ports with the flexibility to expand with demand to become one of the largest ports in the world. Harbour activity has increased consistently, albeit at a moderate rate, since the beginning of 2004 and could be due to the surge in international trade experienced in South Africa due to the strength of the world economy and the demand for commodities from countries like China and India. The number of vessel moves increased from a monthly average of 286 in 2003 to 308 during 2007, representing a 4.64% increase for the period (Coetzee, 2008). Driven by the country\\\'s economic growth, the National Ports Authority has announced that Richards Bay will receive a ZAR 600-million boost for the upgrading of the coal terminal and improvements to the bulk liquid berthing capacity. Port Manager Thami Ntshingila said that the investment will enable the port to handle increased cargo volumes and also reduce the costs of operating out of the port. This upgrade will make the facility the world\\\'s largest coal export terminal. The cost of the expansion will be borne by RBCT\\\'s shareholders which are; AngloCoal, BHP Billiton\\\'s Ingwe, Xstrata, Eyesizwe, Kanga Coal, Sasol and Total Coal South Africa. Economic activity in Richards Bay is still expanding at a fairly rapid and somewhat surprising pace. The region is home to some of the biggest business concerns in the country namely Foskor, Richards Bay Minerals, Hillside Aluminium, Bayside Aluminium and Richards Bay Coal Terminals. The Richards Bay Coal Terminal is instrumental in securing the country\\\'s position as the second-largest exporter of steam coal in the world and Richards Bay Minerals is the largest sand-mining and mineral-processing operation in the world. The manufacturing sector is the dominant sector in the local economy contributing 74% of total turnover and 50% of the total wage bill. According to Clive Coetzee\\\'s June 2008 Economic and Business Report for Richards Bay and Uthungulu District, the Business Confidence Index (BCI) for the Richards BayEmpangeni and the uThungulu District is 61.4 at present compared to 80.9 in 2007 (48 for South Africa at March 2008) and should be interpreted as follows, i.e. a value of 50 is indicative of neutrality, 100 indicates extreme confidence and 0 indicates extreme lack of confidence. It seems that businesses are still extremely positive and confident about the current and future state of business in the Richards BayEmpangeni and the uThungulu District. Further to Coetzee\\\'s Economic Report, year-on-year economic activity expanded by a very healthy 14.09% year-on-year during 2007, which is a huge contrast to 2006, where economic activity expanded by only 2.07% for the year. The increase in economic activity seems to suggest that a combination of factors due to the structure of the economy has caused the increase. In addition, the interest rate increases and the general deterioration of the national economic environment seem not to have had a significant impact on the regional economy. The Richards Bay Industrial Development Zone (RBIDZ), on the north-eastern coast of South Africa, encourages international export competitiveness through tax and duty-free incentives, world-class infrastructure and competitive input costs. The IDZ, which totals 540 hectares, comprises five sites that have been developed to suit various industry types. The site for light industry is presently being developed into a customs-controlled secure estate, while the other four sites that focus on medium to heavy industry are being developed to client specifications. Prospective tenants are geared to take up export opportunities which will be afforded to them through their extremely close proximity to the port, a dedicated customs facility, and the incentive of non-liability for import duties and VAT. In addition, they will also be able to utilise incentive programmes in respect of establishing new companies, increasing competitiveness and innovation, the import of new machinery, and the establishment of export markets. A further advantage for industries locating in the IDZ is the immediate supply of feedstock, including: aluminium, heavy metals, various chemicals, wood, pulp, paper, agricultural products, gas, coal and electricity, with numerous of these opportunities having been scoped by the IDZ, for uptake by investors. Tata Steel rated as the most efficient steel producer in the world, started construction of its ZAR 670 million ferrochrome plant at in the IDZ in 2007. Ferrochrome is used in the manufacture of stainless steel and the plant's output will be exported to Tata Steel's existing customers, principally in Asia, Europe and the United States. Tata Steel is the largest fully integrated chrome manufacturer in India, where its operations extend from chrome mining to beneficiation and the manufacture of ferrochrome for local and international markets. Managing Director of Tata Steel, Mr B Muthuraman, said that that the high carbon ferrochrome plant would be \\\"the cleanest in the world\\\" with state-of-the-art production processes. Tourism Besides rapid industrial expansion, the tourism industry of this region is flourishing. The commercial and industrial development of Richards Bay has been a bonus for the sophisticated tourist and holiday maker. Its bustling business centre has every modern facility and the town boasts excellent recreational facilities for residents and visitors alike. The north coast also offers magnificent scenery, unspoilt beaches in coastal conservation areas. Industrial Tourism is actively promoted and industrial plants, mines and other operations may be visited. Port Shepstone Port Shepstone, which falls under the Ugu District Municipality, is fast approaching a boom time. Port Shepstone is today the administrative, commercial, distribution and transport centre of the South Coast. The demand from national retail and corporate tenants looking for space in the region is an indication that growth is occurring with potential for more investment. An urban renewal programme had been proposed with the specific aim of stimulating the tourism economy in the area. It will include the development of: - Residential property along the seafront and riverfront - Office blocks in the commercial core - Four new hotels (4- and 5-star), including a conference facility - The "Settler's Park" A recent trip to Portugal and Spain by Ugu District Municipality, the Hibiscus Coast Local Municipality and Trade and Investment KZN to build relationships with businesses and government in these two countries was successful. One result is that the Portuguese company Construta do Tamega is planning to builds a multi million rand Portuguese village in the Port Shepstone area for the World Cup 2010. Other projects in the region include the development of the Biofuels industry; the development of clinics and hospitals in rural areas; local skills development; developing a tourism and agricultural master plan for the region; investment in electricity generation infrastructure; the proposed upgrading and expansion of the Margate Airport; and setting up major local manufacturing operations. Current challenges Of significance in any assessment of KwaZulu-Natal's current business activities and opportunities, as well as chartering a course for the future is to acknowledge the significant challenges facing the Province both on a global and local level Taking a new direction (and not a positive one) may well be applied to the current decline in many of the global economies. The biggest test is the global oil market, which has currently undergone steady and disquieting price increases from $90 to nearly $150 a barrel. Few businesses predicated that the oil price could spiral upwards at such rate and many a boardroom discussion on future scenarios had scoffed at the idea of oil at $150 a barrel, never mind the unimagined threat of $200 a barrel. While the prices appear to have stabilised at present future price predictions are uncertain. To add to the economic woes, dwindling global food supplies are causing ripples of discontent. According to Canada's National Farmers Union (NFU), rising population, water shortages and the growing costs of fossil fuel-based fertilisers point to a calamitous shortfall in the world's grain supplies in the near future. While the biofuel industry has been blamed for increasing food costs, eliminating the demand on grains created by ethanol production would be nothing more than a quick fix temporary solution. Of note is that the rising demand for grain in China, stemming from an increase in meat consumption, is overwhelmingly the cause of supply and demand imbalances in corn production. The only real long term solution is finding ways to increase supply through increased yields, bringing idled farmland back into production and improved farming practices (Biofuels Digest, 2008). Other declines in the global economy are apparent in the housing market slump that got underway during 2006-2007, led by the United States, United Kingdom and Spain. A similar housing decline is currently being experienced in South Africa, fuelled by increasing interest rates as well as inflation. As pointed out by Cees Bruggeman, Chief Economist for First National Bank, this fall has significantly eroded household wealth, employment and real income growth in the affected regions. The decline is also suggestive of the housing market correcting itself given the rapid increases in prices that had previously occurred. The growing middle class has had an enormous impact on the South African economy in respect to purchasing power in the retail market. The negative side had seen a sharp rise in credit, which is similar to trends seen in many other emerging and developed countries. The potential inflationary impact of excessive growth in consumer spending prompted the South African Reserve Bank (SARB) to raise its benchmark repo rates by 5 percentage points since June 2006 in an effort to curb high inflation, which hit a 512 year peak of 10.9 percent year-on-year in May 2008. The current increases in interest rates is set to continue both internationally and locally, ultimately the Reserve Bank aims to achieve a creditable circle of low inflation, moderate interest rate cycles and high and sustained economic growth.. In a televised interview on CNBC Africa in July 2008, South Africa's central bank Governor Tito Mboweni said that "at global level it is clear interest rates have to go a bit higher and monetary conditions have to tighten because we still have inflationary pressures throughout the world. How large these interest rates changes will be I don't know... In South Africa we have had quite a prolonged period of less accommodative monetary stance so I don't know, I wish I knew." These increases have had major repercussions for many businesses. Raw material prices are going up, energy costs to operate facilities are increasing, and distribution costs to transport their products to customers are rising. According to PricewaterhouseCoopers, manufacturers must decide how much, if any, of these rising costs to pass onto their customers. Many are attempting to do so, but tightening margins indicate that end markets will only absorb so much. It's a delicate balancing act. Predictions are that global growth will continue once the market has stabilised. For the world to resume progress by way of high growth, it apparently may first have to regress a bit, sacrificing a year or two (or more) in order to clean up some of these imbalances accumulated over years of uncritical prosperity (Bruggeman). Climate Climate change cannot be ignored as a threat to human security and South Africa is well placed to play a meaningful leadership role in the global debate. Of necessity, care for the environment is growing in importance, not just as a moral issue, but, increasingly as an integral part of the purchasing criteria of major organisations such as local authorities, government departments and large businesses. Environmental Affairs and Tourism Minister Marthinus van Schalkwyk recently stated that climate change could cut South Africa's maize crop by 20 percent within 15 to 20 years as the west of the country dries out while the east is afflicted with increasingly severe storms. As such, as a signatory to the Kyoto Protocol efforts to reduce the country's carbon footprint and the implementation of other energy efficiency processes need to be taken seriously. A FutureWorld presentation on 'Business and the Environment' recently stated that increasingly, organisations around the world are recognising the value of demonstrating transparency and accountability beyond the traditional domain of financial performance. This trend has come about through increased public expectations for organisations to take responsibility for their non-financial impacts, including impacts on community and the environment. Many KwaZulu-Natal companies are leading the way in using business as the vehicle for responsible environmental change. Forestry giant Mondi has acknowledged the importance of ecosystems and that, unless the global degradation of ecosystems is checked and then reversed, where possible, the survival of people and business would be seriously threatened. Mondi and WWF have signed an agreement to extend their partnership in the Gilboa Wetlands in KwaZulu-Natal for another five years. Mondi has been involved in the programme for seven years and has confirmed its commitment to the wise use and rehabilitation of South Africa's wetlands through a contribution of ZAR 20-million and continued partnership with WWF and MWP. Technology is also the source of new energy-efficient and environmentally friendly solutions. Increasingly, major corporations are recognising that going green is not only the right thing to do, but makes business sense too. Pulp and paper group Sappi is in talks with Eskom about a 40 MW co-generation facility at its chemical cellulose Saiccor plant at Umkomaas in KwaZulu-Natal, as well as another 10 MW at its Tugela mill. In the past, "black liquor" a chemical by-product of the pulping process in the paper making industry killed aquatic life in the rivers it was unthinkingly released into. These days it has considerably more value when it is burned in order to generate electricity. Sappi hopes to have some commercial projects ready by 2012. Indications are that Eskom may pay between 65c and ZAR 1.05 a kilowatt-hour to private generators bringing capacity on stream before 2012 - enabling Sappi to earn a higher rate than it pays for the electricity it buys from Eskom (Business Report, August 2008). Localized factors Economic growth is the fuel to fund and drive a new, positive future for the Province. However, localized factors also affect South Africa's and KwaZulu-Natal's current economic growth rate. Eskom Eskom's inability to supply sufficient power to the county during much of the first half of 2008 has been problematic. However, steps are currently underway to correct the problem. Eskom intends to bring three 'mothballed' power stations back into operation within the next 12 months as well as build two new plants. The additional capacity will help meet soaring industrial demand, alleviating growing pressure on the country's electricity grid. Part of the solution to meet expansion demands is to raise tariffs. While this has raised much concern over the cost of doing business, Eskom CEO Jacob Maroga bragged that at $0.03 (23c) per kilo Watt hour for industrial customers after increases, prices still remained competitive (January 2008). That's the understatement of the year, given that US electricity is three times and Danish electricity eight times more expensive than what the average firm here pays. Crime Crime is often singled out as being a deterrent to investment and to living standards in South Africa. In response to these concerns the government is to increase its safety and security budget by R10-billion over the next three years as South Africa moves to strengthen its police force and judiciary. Presenting his 200809 Budget in Parliament, Finance Minister Trevor Manuel said the allocation would see more than 200 000 police officers in the country by the end of March 2011 - 22% more than the current 163 000 - as well as more prosecutors, judges and magistrates. Action for a Safe South Africa is another new initiative that has been launched to actively address the causes behind high levels of crime in the country, with the aim of realising the vision of a safer South Africa. The programme intends to focus on reducing the demand on the country's criminal justice system, as opposed to focusing on improving the country's police force, prisons and courts. The Action for a Safe South Africa aims to intervene within the cycle of violence at key junctures through the collaborative efforts of eight working groups. These include A Million Mothers, Peace in the Home, Opportunity of Youth, Action for Victims of Crime, A Role for Every South African, A Sober South Africa, (Guns) Unsafe in Anyone's Hands, and Second Chance. Locally, the city of Durban has set aside ZAR 12 million to boost the Metro Police service. Durban is the country's only city with its own City Metro Police in addition to the national police force. The aim is to develop a firm, but friendly police presence where personnel are geared towards both enforcing the law and acting as ambassadors. Security in the city is also enhanced by sophisticated technology, including surveillance cameras for incident free events. Political leadership President Thabo Mbeki is fast approaching his political retirement in 2009 after two terms at the helm of country. Currently there is much debate as to his successor, with controversial Jacob Zuma as the current leader of the African National Congress (ANC), the people's choice. However, Zuma has spent much of his time assuring big business that there will be no significant changes in economic policy under his presidency. During a recent address by MEC Zweli Mkhize business, political and media leaders were told that as the ANC held the broader interests of South Africa as the main priority, they should not be concerned about political developments in the country (KZN Growth Coalition breakfast August, 2008). Land Reform Land reform is a priority in South Africa - and the government has given its assurance that the free market system will remain one of the pillars of its redistribution programme. South Africa has the resources to negotiate and sustain a successful programme of land reform. At present the restitution process has successfully settled almost all urban claims. However, the slow pace of processing and settling the remaining large and complex rural claims appears to be largely attributable to huge backlogs, inexperienced and inappropriate staff and understaffing in the Department of Land Affairs (DLA) and the Land Claims Commission, both nationally and provincially. This problem needs to be solved as a matter of urgency as some proposed developments' progress is currently being hampered causing much frustration and loss of revenue. And the Promising However alarming the individual negative factors are, the bigger picture is not so murky. Trade and Industry Minister, Mandisi Mpahlwa Mpahlwa recently stated that the South African economy has increasingly shown resilience, and the capacity to cope with global challenges, as well as having undergone qualitative changes in macroeconomic policy (Engineering News, July 2008). China's largest bank, Industrial and Commercial Bank of China (ICBC) invested ZAR 36.7 billion in Standard Bank (a 20% share) in 2007. The deal was also the largest investment made into Africa in 2007 which clearly shows the positive sentiment that exists towards South Africa's future. Bain LLC's acquisition of the Edcon Group valued at ZAR 25 billion also ranks highly in Ernst & Young's latest Mergers & Acquisitions Handbook. Speaking at the launch of the handbook, Ernst & Young's Sean McPhee said that South Africa has benefited from international interest in emerging markets, which generally show higher growth than the developed markets. McPhee believes that private equity will remain a significant driver of mergers and acquisitions in the future. "We are encountering more and more foreign private equity groups that find the South African market attractive. This stems from the growth our market is experiencing, access to resource-rich Africa and the opportunities in infrastructure development," says McPhee. Optimism South Africa and KwaZulu-Natal are indeed raising the stakes when it comes to initiatives to cope with many of the challenges facing the country and the Province. According to Grant Thornton's 2008 International Business Report, South Africa is placed as the ninth most optimistic country for 2008 in the survey where 34 countries were included. The optimism for the future covers key areas such as employment and economic growth. This claim is supported by the Organization for Economic Co-operation and Development (OECD)who recently stated that "a combination of sound macroeconomic policies and structural policies aimed at increasing competition appear the most promising to unleash the enormous potential of South Africa's labour force and address social ambitions". South Africa also made her debut in the 2007 Foreign Direct Investment (FDI) Confidence Index at 18th place. South Africa joins the Gulf States as newcomers to the index as corporate investment increasingly targets developing nations. The index, compiled by global strategic management consulting firm A.T. Kearney, lists the world's 25 most attractive FDI destinations."Although South Africa is the only African country featured in the index, the report states that there has been a boost in investor optimism in Africa due to reducing government bureaucracy and the introduction of financial or tax incentives. South Africa's position places the country ahead of Central Asia, South Korea and Poland, among others. The KwaZulu-Natal government has also embarked on a strategy to attract international investors to the Province. MEC for Economic Development, Zweli Mkhize reported that the regional economy has shown resilience with investments totally nearly ZAR 8 Billion from only 19 investors arriving in the last 24 months (Growth Coalition Breakfast, August 2008). The hosting in October 2007 of the much talked about first South African International Trade and Investment Conference and Exhibition contributed greatly towards profiling KwaZulu-Natal as an investment and trade partner. The conference attracted over 800 delegates from many targeted countries including Germany, Switzerland, USA, China, Nigeria, Mozambique, India, United Arab Emirates and Portugal to mention a few. On January 8, 2008, a memorandum of understanding was signed between the KwaZulu-Natal government and international developer Ruwaard Holdings who are based in Dubai. The proposed project involves a multibillion- rand investment on the northern side of uThukela river, in the Macambini area on the KwaZulu-Natal north Grant Adlam www.kzntopbusiness.com

2006-03-26 In March 2006, a packed stadium and thousands of other fans at home, watched as one of the most extraordinary games of cricket, ever encountered in the history of the sport, was played out before their eyes. Victory to South Africa seemed impossible in the light of the record- breaking target set. Astoundingly, the batsmen achieved the required runs and South Africans experienced a collective spirit of victory, optimism and national pride that was felt for weeks. The Protea's team had to compete on a level that they had never achieved before and did so highly successfully. We all want to be on the winning team and sporting victory is a current icon of achievement. The same principles that went into winning an international sporting event can be applied to those venturing into the market place. The 21 Century belongs to entrepreneurs; individuals who like the Protea\'s captain, Graeme Smith, have the courage to dream, who can see opportunity, and turn their dreams into reality. However, to achieve, motivation, planning, a competitive spirit, the utilization of assets and cooperative team play is required. Especially, as being successful in today's global world means having to compete resourcefully, effectively and to be innovative. The reward is in bringing home profit and adding value to the economy. KwaZulu- Natal shows all the signs of winning and a number of factors can be considered in contributing to this success. The South African Context KwaZulu Natal has to first be positioned in the overall context of the South African market. South Africa is a fast developing and growing economy with unlimited investment opportunities. United Nations secretary-general Kofi Annan, at the joint sitting of the South African Parliament in Cape Town (March 2006), described South Africa's success in relating to the wider world as the best model for the entire developing world. He stated that South Africa's robust economy, stable democracy, support for the rule of law and - perhaps most important - the fully inclusive constitution have made South Africa, a beacon of tolerance, peaceful coexistence, and mutual respect between people of different races, languages and traditions. According to revised StatsSA 2005 data, the current size of the economy, at an estimated R1.39-trillion, is one of the strongest in 50 years. The economy has grown by more than 4% every quarter since 2004 and is continuing on an upwards climb. The seasonally adjusted real GDP at market prices for the first quarter of 2006, compared with the fourth quarter of 2005, increased by an annualised rate of 4, 2%. The main contributors to the increase in economic activity for the first quarter of 2006 were the finance, real estate and business services industry, the wholesale and retail trade, hotels and restaurants industry; the manufacturing industry, the transport and communication industry, and the construction industry. The government is also powering ahead with its plans for the new Accelerated and Shared Growth Initiative. This strategy will build on the steady economic growth of about 5% with a view to making the envisaged 6% achievable in the next few years. An expectation for further growth is desired by many economists who are no longer easily satisfied with the present growth rate but predict that more significant levels will be achieved. This prediction is in accord with the South African Reserve Bank (SARB), in forecasting that the current period of economic expansion will continue. The South African Government has also targeted an economic growth rate of between 6% and 7% over the next decade. Inflation ought to remain in the range of 3% to 6% for 2006/7. The world economy, including a number of emerging markets, appears to ensure good prospects for a steady demand in exports but higher imports will make sure that the current account remains in deficit of 3.6% of GDP. According to Chris Hart, Absa treasury economist, the biggest driver of the economy in 2006 will be investment. 'I think by the end of the year growth is going to be on the upside and GDP will hover between 4% and 5%. You are going to see not only government spending but also private sector investment - both imported and local - in the economy in order to take advantage of the strength we have seen in the past year' (TradeInvestSA, January 2006). The 12th annual Index of Economic Freedom, by The Heritage Foundation and The Wall Street Journal, calculated that South Africa's overall score improved from 2.83 to 2.74, tying the country with Kuwait as the world's 50th most economically free countries out of the 157 countries measured. The Heritage Foundation\'s view is that countries with the most economic freedom also have higher rates of long-term economic growth and are more prosperous than are those with less economic freedom. South Africa is considered more economically free than emerging market competitors such as Mexico, Brazil, India and China. Significantly; South Africans have a competitive advantage in Africa. With the current growth in the economy, an increasing Upper and Black Middle Class is emerging. Over 2 million people have joined the middle class ranks in the last 10 years. This increase has a considerable impact on the South African economy in respect to purchasing power in the retail market. The combination of a strong economy, boosted by higher consumer spending and increased business activity, means that there is a rising level of confidence in the South African market. It is plain to see that South Africa has unsurpassed opportunities in bowling out the competition. KwaZulu-Natal What happens at national level usually has a dynamic effect on regional economies and KwaZulu-Natal is no exception. The Zulu Kingdom has historically been a key component of the southern African economy. The Province links southern Africa through trade to the rest of the world, as well as provides a base for those wanting to venture into African markets. A number of unbeatable factors contribute to this advantage. 1. The KwaZulu-Natal Economy According to latest figures, out of the nine South African provinces, the KwaZulu-Natal's contribution is the second highest contributor to the Gross Domestic Product (GDP). In 2005, real annual GDP at market prices increased by 4.9 percent, compared with 4.5 % in 2004. Gauteng contributed 33.8% and KwaZulu-Natal contributed 16.3%. After a relatively depressed economic period during the late 1980s and early 1990s, KwaZulu-Natal has experienced positive economic growth over the past 7 years. Moreover, the Province's GDP has, since 2000, grown in excess of the national growth rate. The Province is experiencing a boom in the exports, manufacturing, business, entertainment and tourism sectors. The manufacturing sector accounts for 36% of the GPP and therefore plays a major role in the economy and its diversified nature is significant in the Province's economic growth rate. This sector's impressive growth is due to the change from a policy of inward industrialization to an open outwardly focused economy. 2. Resources KwaZulu-Natal has natural, mineral and metal resources, agriculture, and forestry. As KwaZulu-Natal is South Africa's best watered province; it has a larger area of high quality agricultural land than any other province, and it is the national leader in several agricultural products. The Midlands area between Pietermaritzburg and the Drakensberg is the heart of this high quality agricultural area, another area of importance is the North coast region. 3. Good Governance The provincial government of KwaZulu-Natal is committed to providing stability and effective governance, which is the foundation for sustained economic growth. Increased political tolerance has also contributed to solidity in the Province. Good governance and better intra-regional relations are keys to helping Africa unlock its potential and take economic growth to higher levels through trade. 4. Business Environment KwaZulu-Natal is the stepping stone to Africa markets and this is a real advantage in setting up a business base in the Province. KwaZulu-Natal has a business-friendly environment with an informed financial system, a sound banking sector, strong investment ratings, effective trade support facilities, and a huge emerging market. KwaZulu-Natal has a plentiful supply of both skilled and trainable labour, as well as proven entrepreneurial abilities, with the dedicated workforce. Labour costs are low and productivity superior, with high standards of local management. KwaZulu-Natal\'s skills base provides a wealth of opportunities for software development, website development and ICT outsourcing and training. A review by a Brussels-based international investment adviser has found that certain selected industrial undertakings can be operated more profitably in KwaZulu-Natal than in competing investment regions in the world. Based on a survey of potential investors, the following are some of the other criteria that are important for making decisions about investing: • Favourable tax rates • Planning advice and assistance • Marketing aid • Land cost and availability • Competitive investment incentives The Province of KwaZulu-Natal endeavours to meet all these needs and more and the various municipalities, chambers of commerce and industry, as well as the investment promotion agencies are committed to raise business confidence and encourage new investments in the Province. All are ready to work with potential investors, when required, to create a platform for long term business development. 5. Infrastructure KwaZulu-Natal has a well-developed infrastructure, including an excellent road/rail system with access to two deep water ports. Durban and Richards Bay Ports are southern Africa's busiest in terms of handling cargo by value and bulk respectively. There is widespread availability of energy, water and sewerage utilities and the telecommunications system links to regional and global markets. The Province has extensive cellphone networks. Durban is the only city in Africa with a fibre optic cable network. Due to this well established IT infrastructure, the Province has become a popular location for international call centres and the outsourcing of business services. Providing air-links to all national major cities, Durban International Airport currently has approximately l 5 000 people a day passing through its doors (according to eThekwini Municipality). Recent indications are that the private sector and the government are committed to investing in improving and developing infrastructure to sustain long term growth. 6. Trade Trade reform processes are generating new opportunities. Positioned as Africa's global trade gateway, KwaZulu-Natal is poised to compete for a market share of the global economy. The volumes of trade between KwaZulu-Natal and the rest of Africa are growing. Exports by KwaZulu-Natal firms already account for some 30% of GGP, and whilst Rand strength has hurt the pattern slightly recently, the long term prognosis is that this share is bound to grow in the future. Exports are important to regions as global market activity allows nations the potential to raise levels of income by, 1)Meeting the needs of markets beyond the limits imposed by the countries borders, and 2)Through importing goods produced more competitively elsewhere to meet local demand. As such, an economy that is open and which has an export orientation is seen as one most likely to benefit from the process of globalisation. Manufacturing and agriculture continue to be responsible for the top export products. A number of opportunities linked to a range of niche markets are also available in the KwaZulu-Natal. At present KwaZulu-Natal would appear to favour some pharmaceutical (bandages) and cocoa products. Relative to the world, South Africa and KwaZulu-Natal are specialising in fur, essential oils and cosmetics and in nickel products. The benefication of primary products in minerals, agriculture and fishing will create additional export products. This push to 'add value', opens up many opportunities for emerging black entrepreneurs and investors alike. 7. Foreign investment Investor confidence into the region is high - statistics from the South African Department of Economic Trade and Investment show an annualised increase of 9% with a total investment of US $ 20 billion into KwaZulu-Natal in the period 2003 to 2006. According to Carl Eaton of the Notae Group, investment optimism is fuelled by South Africa's well balanced economy, the country's growth history over the last couple of years, KwaZulu-Natal's tourism market and the City of Durban's Economic Development plan. To date, the two most significant and largest Foreign Direct Investments in South Africa are the R35-billion takeover of ABSA by the UK-based Barclays and the R15-billion Vodafone-Vodacom deal in 2005. Companies from India are also entering the South African economy. Tata, the Indian industrial conglomerate, known in South Africa for its passenger and commercial automotive offerings, has significant plans to increase its interests in the country, and use it as manufacturing and export base. Tata's goals in South Africa are significant, ranging across sectors from steel and ferrochrome, to telecoms, energy, information technology and leisure. Proposed investments include • Construction of the new a R600-million high-carbon ferrochrome smelter in Richards Bay, KwaZulu-Natal, in 2006. Tata Steel, MD Muthuraman said that Richards Bay had been selected ahead of a competing site in Australia, owing to South Africa's competitively-priced power, as well as the fact that Richards Bay had an efficient deep-water harbour. • Building electricity utility Eskom's two gas turbine power stations (Tata has been shortlisted with BEE partner J&J Group) • The Group's telecoms subsidiary, Videsh Sanchar Nigam Limited (VSNL), is to become a leading participant in the so-called second network operator (SNO). Tata anticipates that the roll-out of the much-anticipated competitor to South Africa's telecoms monopoly, Telkom, will cost an initial R8-billion to R9-billion. ICICI Bank, India's largest retail bank has opened its office here and is currently expanding across the country. Well over thirty U.S. companies are now located in the Province, the second highest concentration in the country behind Gauteng. Sara Lee (America's largest employer in South Africa) and Masonite are good examples of this high-level presence. Other \"Fortune 500\" companies here comprise: DOW, Citibank, Mobil Oil, Deloitte and Touche, Price Waterhouse Coopers, Lykes Lines, Rohm & Haas. In the investment area, these sectors offer promise: tourism, manufacturing, agribusiness and food processing, chemicals (including petrochemicals) intermodal transport logistics; IT; health care; machinery and supplies. 8. Business Confidence The benchmark business confidence index compiled by the South African Chamber of Business (Sacob) recently rose to 129.4 points from 126.5 in November 2005. Overall business confidence averaged 127.1 points in 2005, compared to 124.4 points in 2004. In particular, the building sector is also benefiting, with its' confidence index increasing from 90 to 94 points. According to a report by the Economic Information Management unit (EIM) at the Department of Economic Development KwaZulu-Natal (November 2005), business confidence in Kwa Zulu-Natal is also growing. 2005 figures show the solid improvement in the index, which is due to the strong performance of the following underlying variables: • The volume of full containers shipped from the Port of Durban is increasing while the volume of containerised imports continued to grow. • The share-price performance of 19 KwaZulu-Natal firms listed on the Johannesburg securities exchange was exceptional. • A record number of new passenger and light commercial vehicles have been sold in the Province • Growth in manufacturing output in the province had a positive effect on the business confidence index. 9. Tourism and Sport KwaZulu-Natal's magnificent Drakensberg mountains, sub-tropical coastline with glorious beaches and game parks are closest to the main national population and economic centres in Gauteng. The Province has great accommodation facilities, wonderful leisure and recreation opportunities, a rich history and diverse cultures. As a consequence, KwaZulu-Natal remains the nation's premier domestic tourist destination, with twice as many domestic tourists as any other province; and it also has a significant share of international tourists. The ICC remains the best conference centre in Africa and its expansion into an entertainment arena this year will bring new benefits. The promotion of business tourism to the Province has many spin-offs for the holiday destinations. A current provincial strategy focuses on ensuring that world class events are attracted to the Province of KwaZulu-Natal, which reinforces our passion for sport, art and culture During the next three years, including some annual events, KwaZulu-Natal will host the A1 Grand Prix, Clipper Round the World Yacht race, World Veterans Tennis, World Cycling, World Beach Soccer Series, FINA Swimming, Duzi Canoe Race, Comrades Marathon, the Midmar Mile, Tour Durban cycle race, Amashovashova cycling race, the Zulu Rally and the Vodadom July Handicap to name but a few great sporting occasions hosted in the Province. 10. Unsurpassed quality of life And if all the above reasons are not sufficient, there are even more advantages if you look as the wider social fabric cannot be ignored. There is plenty of land, houses to suit most income groups, good medical care and education. KwaZulu-Natal offers an unmatchable combination of assets- sunshine, leisure opportunities, relaxed lifestyle, and a growing economy. It is alive with possibility! Distribution of Economic Activity Economic activity is distributed around the Province in a number of nodes but many other areas have high potential for growth, which should not be overlooked. 1. The Durban-Pinetown metropolitan area possesses over 80% of KwaZulu-Natal's factories, and with more than 10% of those in the Republic, is South Africa's second or third most important industrial region. Its factories are associated primarily with shipping, food processing, chemicals, sugar, and oil refining. The Department of Trade and Industries (the dti) is promoting Durban as having the potential to develop into the country\'s largest industrial hub within the decade because of the excellence of the Durban Port. 2. Just outside Durban the Umhlanga area is growing rapidly as a commercial and business heartland. Stretching across the Umhlanga Ridge, Gateway and the La Lucia Office Estate, the area is recognised as South Africa\'s fastest-growing property development sector 3. The buoyant economic outlook in Pietermartitzburg has been confirmed in a study which points to a 50% growth in turnover by factories over the past decade. George Oldham and Mike Hickson, of the School of Economics and Finance in Pietermaritzburg, reported that through growth in manufacturing, Pietermaritzburg is re-establishing itself as an industrial growth point. Hulett Aluminium, the capital city\'s largest industrial operation, is to embark on a R54 million heat-treated plate expansion project. Pietermaritzburg has a number of industries consisting of an aluminium plant, several footwear factories and food processing plants and has experienced an increase of almost 100% in economic activity from January 2003 to June 2005 (Coetzee, Economic and Business Report, January 2005). 3. The lower Umfolozi area (Richards Bay/Empangeni) is home to some of the biggest business concerns namely Foskor, Richards Bay Minerals, Hillside Aluminium, Bayside Aluminium and Richards Bay Coal Terminals. The expansion plans for the Richards Bay Port and the creation of an Industrial Development Zone will promote future growth in the region. 4. The Ladysmith - Emnambithi region, The KwaZulu-Natal (KZN) Provincial Growth and Development Strategy and the National Spatial Development Framework state that one of the primary development corridors run through the uThukela Regional Council (RC) area from Pietermaritzburg to Harrismith, with a branch off to Ladysmith and Newcastle. Ladysmith is thus centrally located with respect to the important development corridor and transport routes in the region. It is generally accepted that the corridor will increase economic opportunities in and around Ladysmith leading to growth of the town and increasing migration and commuting. 5. The Newcastle - Madadeni region. Analysis suggests that the past decade has seen rapid, growth in Newcastle of service and retail activities - such that Newcastle's position as Northern KwaZulu-Land's Service Hub is being increasingly recognised by both the private and public sectors. 6. The South-Coast is also showing signs of increasing economic activity, especially in tourism related projects. Economic Sectors A brief look at a few of the economic sectors and the plans for future expansion in the Province indicate that KwaZulu-Natal will be forging ahead in attaining a record growth rate. Manufacturing KwaZulu-Natal's economy is driven by the manufacturing sector and in particular the automobile and component sector, paper and paper product industries, and chemicals. The mining sector which includes titanium dioxide, zircon along with iron, steel and ferroalloys is important. The manufacturing sector, in particular, plays a major role in the economy and its diversified nature is significant in the Province's economic growth rate, and to providing employment. Chemicals account for about 20% of manufacturing output, while clothing and textiles accounts for 20% of manufacturing employment. There are many opportunities for small businesses in value added initiatives. Of note is the importance of downstream development, which is required to increase capacity and lay a foundation for successful economic development where it is most needed. One of the industries considered conducive to more downstream development is the aluminium industry, where beneficiation both by large companies and financially-assisted small, medium and micro enterprises (SMMEs) is considered to be economically feasible. Automobile There are 1 317 motor retail businesses in the province. According to Brand Pretorius, chief executive of McCarthy Limited, who addressed delegates at the annual Durban Motor Show on 17 March 2006. " It is expected that around 80 000 new vehicles will be sold in KZN in 2006," said Pretorius. "The province currently holds a 16% share of the national new vehicle market, with Gauteng 46% and the Western Cape 17% respectively." These statistics well indicate the importance of the automobile sector to KwaZulu-Natal. Toyota South Africa based primarily in Durban, has established its dominance in the domestic market as a key producer of passenger and light commercial vehicles. Toyota has committed itself to expand production at its Durban plant to facilitate its export programme. This will see it doubling production to 200000 units a year. To facilitate growth an automotive supplier park is being developed in south Durban by Toyota, the provincial and local governments. The park, a few kilometres from Toyota\'s assembly plant in Prospecton, will be based on a 30ha site owned by the Airports Company South Africa (Acsa). Combined Motor Holdings, and both are currently in the process of expanding their national and KZN dealer networks. McCarthy Limited is a division of Bidvest and currently its number one local profit contributor. Revenue increased during the 2005 financial year to R13.6 billion, and the company recorded an operating profit of R501 million. The company employs 5 289 people at its operations around the country. " McCarthy Limited is planning to invest R225 million in new facilities in 2006," said Pretorius. "The expansion of McCarthy Limited's portfolio in the KZN province includes a mega Toyota dealership in Kingsmead, a new Toyota dealership in Ballito, and a Renault dealership in Pietermaritzburg". Swedish manufacturer Volvo has announced it is to open a production plant in Durban. Volvo Trucks has been assembling kits for both truck and bus products in Gaborone, Botswana since 2000. However, in-line with an aim to achieve higher global efficiencies, the decision has been taken to move production to Durban from Gaborone. Volvo is investing almost R41 million in the production plant, creating 82 jobs. Agriculture Agriculture is a labour-intensive sector, which is especially relevant in a provincial context of high unemployment. Growth in this sector is being actively pursued as there are many schemes being implemented, which have the potential to provoke socio-economic upliftment in the Province. In line with this thrust the identification of crops and the creation of opportunities for SMME agribusiness prospects are of importance. Proposed projects include: - honey farming, the growing of cut flowers, the production of essential oils for on-sale into the pharmaceuticals and cosmetics markets, and the cultivation of plants that can be marketed as indigenous medicines. Some studies show high value/ low mass floriculture and horticulture for export are likely to take the lead in the future. The potential for sugar cane to be used as biofuel is also of importance to entrepreneurs. One such project is being undertaken by the Ilembe Local Municipality where research has indicated that rose, geranium and lavender plants for essential oil production would grow particularly well in the area, generating commercial opportunities for local workers. According to Municipal Manager, Dr Buks Pretorius, Ilembe is presently trying to find a strategic position relative to Dube Trade Port and the King Shaka International Airport, (which will be operational in 2009) for an agri-processing facility to allow for rural produce to be grown and processed for export. Timber is the main feedstock of the Province's large world-class and expanding pulp-and-paper industry due to that availability of lumber resources in KwaZulu-Natal. The manufacture of wood products remains a part the manufacturing activities but for the most part paper production occurs. Due to Durban's port, which offers export linkages to international markets Durban is the site of a number of paper and board mill operations who export a significant amount of their production. Mondi supplies a number of BEE operations which include furniture production and paper making. Mondi South Africa Ltd. CEO, John Barton, believes the "Proudly South African" campaign reinforces the company's marketing slogan "South African Roots - Global Reach"; launched in conjunction with major restructuring in November last year. While Mondi is a global company, Mr. Barton says Mondi South Africa and subsidiary Paperlink are "delighted to participate in this demonstration of both our good practices and our commitment to South Africa." The Mondi group restructuring led to the creation of two major Black Empowerment companies. Shanduka Resources Ltd, a broad based BEE company, acquired 42% of Mondi's newsprint business and 45% of Mondi's packaging operations, resulting in Mondi Shanduka Newsprint and Mondi Packaging South Africa becoming truly BEE companies. Sugar-processing includes the broader activities of food and beverage processing. This sector should grow significantly in the years to come with the growing middle class. In addition, the influx of people moving to urban areas causes more food to be purchased, rather than grown. Construction and Property development The construction and property development sector is booming across the Province with numerous residential and commercial projects underway. Durban is experiencing an increase in inner-city rejuvenation as investors are being attracted to urban renewal projects, specifically in commercial conversions of former offices into upmarket residential units. The Durban Point Development Project near the city's central business district is bringing significant volumes of property stock to the market, providing numerous opportunities for property management companies and agents. A prime example is Shaka's Gate, a R400 million development which is to be built at the Durban Point Waterfront. Described by the developers as one of the most exciting and magnificent development projects, Durban has seen for decades, Shaka's Gate will offer 220 luxury air-conditioned apartments and penthouses all with secure basement parking, world-class security, a swimming pool, spa and a gymnasium. Construction commenced in 2006 with completion anticipated in December 2007. The Umhlanga Ridge area, which in the past five years has boomed into Durban\'s new central business district, has been acknowledged as South Africa\'s fastest-growing commercial hub. The influx of workers has fed demand for large-scale, upmarket residential property developments and provoked a property boom not experienced in the city for decades. Billion rand deals from the oil-rich Middle East Arab countries whose companies are shifting money away from Europe and the US are occurring. Kuwait-based IFA Hotels & Resorts K.S.C.C ("IFAHR Kuwait"), the largest single foreign investor in KwaZulu-Natal tourism to date, boosted the SA economy when it reverse-listed two SA subsidiaries onto the JSE main board under the banner IFA Hotels & Resorts Limited ("IFAHR SA"). The company perceives South Africa to be a springboard for expansion into the continent. Through its two subsidiaries IFAHR SA now owns the exclusive Zimbali Lodge on Kwa-Zulu Natal's north coast, rated by Condé Naste as one of the world's top hotels, and a 50% stake in the multi-million rand Zimbali Coastal Resort. The Zimbali integrated resort project jointly developed with Moreland Developments, which indirectly owns the remaining 50% interest, offers hotels, luxury residences, golf courses and leisure facilities. The rapid take-up of properties has prompted the joint venture to develop a 300 ha extension, Zimbali Lakes, which will include a Gary Player signature golf course. The multiple award-winning Midlands Mall in Pietermaritzburg, R120 million extension project is due for completion in 2006. The state-of-the-art regional shopping and lifestyle centre is owned by Liberty Group Limited and its extension forms part of the Liberty expansion programme to add further value to one of South Africa's best performing property portfolios. The strategically situated Midlands Mall development is Liberty Properties\' first major retail development in KwaZulu-Natal. Stephen Roberts, Bentel Associates International's project director for the retail development stated that, "The centre has added a new dimension to the area, it has become the focal point of retail activity and entertainment in Pietermaritzburg and the resultant increase in local confidence has provided a fresh impetus for further economic activity and development. The expansion is expected to sustain local construction industry jobs and job creation in retail and service sectors will further reduce unemployment in the area". Richards Bay Keystone Investments has been approved by the Umhlatuze Municipality Council as the preferred developer of land in the southern block of the Richards Bay CBD and proposes to develop a R340 million regional shopping mall. The proposed mall, known as Inkwazi Regional Mall, will have about 30 000m2 of lettable space with high quality finishes, wide pedestrian malls and roof lights. The developers have also committed to constructing a 'town-square' in front of the Richards Bay Civic Centre. Demand for residential property in Richards Bay remains high. Development plans for a number of new development have been passed, which include the R300 million Richards Bay Golf Course Estate and town house complex on a portion of the Empangeni Golf Course and the Tennis Club. The Zini River Estate will transform former sugar cane farmland into a 175h housing estate on the northern side of Mtunizni. Services Sector A new company, KZNonSource, has been established as a result of the strategic partnership to drive the services sector and position the Province as a location for outsourcing. Factors influencing the growing in call centres in the Province include cost effectiveness, English fluency, accent and language skills and a compatible time zone to many countries. William Goldstone CEO of KZNonSource anticipates a period of rapid growth. He stated that the company is starting to see the fruits of its work in publicising the region and that it was a very exciting time. He believes that it is vitally important to continue to support training and skills development and ensure that KwaZulu-Natal has the infrastructure in place to support existing and emerging call centres to meet the challenges ahead. The transport sector and freight logistic is extremely relevant to the KwaZulu-Natal context. The communication sector is making impressive in-roads in increasing its contribution the KwaZulu-Natal economy. Tourism Tourism has been identified as a catalyst for economic growth and the rapid growth in tourism presents a variety of investment opportunities. Present indications are that the KwaZulu Natal coast will continue to draw tourists for the next 10 years due to its beaches, excellent weather, golf courses and shopping facilities. Current successes include uShaka Marine World with its world-class aquariums and research facilities and Africa's leading convention centre, Durban's International Convention Centre, is nearing completion of a R460-million expansion. The regional tourism authority, Tourism KwaZulu-Natal, has a number of new investment projects underway. The multi-million rand projects being developed include five casino developments, the eMakhosini Valley cultural conservancy, the Port Shepstone marina, Shushu hot springs, the Mkhambathini Game Reserve and a tourism centre in Mnweni valley in the uKhahlamba-Drakensberg world heritage site. There are number of sound opportunities for investment in tourism properties. According to Fred Parsons, chairman of Realty 1, the decision by international hotel group Marriott to build a R1, 6 bn five-star hotel in Umhlanga Rocks 10 km north of Durban represents "one of the biggest foreign direct investments in the history of South African tourism". The project is a joint venture between US-based international five star Marriott Hotel group and Notae Resorts, an international entertainment, development and investment company with offices in Durban, Johannesburg and New Jersey, US. The leisure and entertainment centre will boast a 150-room, five-star international hotel, 300 apartments and a retail component. Carl Eaton, CEO of the Notae group, disclosed that the funding for the project would be provided by US hedge fund, Creators Structures. Parsons was also confident that the majority of apartments, which range from R1, 8m to R10 m, will be bought by overseas buyers. The tourism sector of Richards Bay\'s robust economy is set for expansion - close to one third of all overseas arrivals to South Africa visit KwaZulu-Natal and a significant proportion of these visit the north coast and Zululand. Richards Bay is an hour\'s drive from the Greater St Lucia Wetland Park World Heritage Site and offers easy access to \'Big Five\' game-viewing opportunities within a 45-minute drive. Richards Bay Marina and Waterfront Development Initiative for the development of tourism and related activity infrastructure have earmarked several projects. • The Ridge - medium-density housing and terraced residential apartments; golf course with clubhouse. • Pelican Island - private beachfront residential units; private boat mooring facility; public commercial facilities. • Bayshore- Alkantstrand - chalet-type residential development and commercial facilities; waterfront shops and cafés; active recreation and watersport entertainment facilities. • East Bay - outdoor entertainment facilities; mooring jetty for ferry and beach hotel complex. Indaba Organized by Kagiso Exhibitions, Durban has become home to Indaba, the continent's premier travel trade exhibition. During May this year, more than 10 000 people descended on the ICC Durban and the Durban Exhibition Centre (DEC). Indaba has grown in status, quality and diversity to become one of the top three must travel trade shows on the global calendar. Indaba 2006 brought together a showcase of Southern African tourism products and services for the international travel trade. Challenges While KwaZulu-Natal has many advantages and successes, its' challenges in the process of development and economic growth should not be discounted. The following factors are of concern. • Poverty: Eradication of poverty remains the number one priority in improving living standards • Labour: Government has identified labour legislation as a problem and the possibility of deregulation in order to reduce the unemployment problems has been mooted. • HIV/Aids: Somewhere between 4.5 million and 6.5 million people in South Africa are HIV positive and KwaZulu-Natal is badly affected. Economically, however, most listed companies and increasingly unlisted companies have programmes ensuring that HIV/Aids is a manageable disease and allowing workers to remain productive for years to come. • Oil: The global shortage of refining capacity and the rising petrol price will push inflation. • Service Provision: The developmental needs of KwaZulu-Natal are substantial, especially in the provision of basic needs and services, but there is room for investors in these areas. • Crime: The necessity to reduce the crime rate requires greater attention at all levels. Meeting the Economic Challenge To maintain the overall growth trajectory, South Africa is striving to fulfill the obligation of labour market reforms and effective civil service, through a skills strategy and infrastructure expansion in the context of a dual economy. One economy is wealthy, regulated, first world and modern, while the other is poor, marginalized, unregulated and informal, which is characterized by high unemployment levels and "survivalist" economic activity. The economic challenge is to enable greater economic self-reliance and vitality in the second economy so that the two economies can become mutually dynamic and more interdependent. The emerging fact is that the first economy cannot, on its own, achieve high levels of growth and stable development for all. The second economy must also become a major driver of the national economy. A number of objectives have been proposed to achieve this goal. • The promotion of technological innovation and competitiveness in key economic sectors • The implementation of initiatives that improve logistics capacity and enhance key supply chains • The provision of integrated economic support for selected project categories • The implementation of flag ship projects to create sustainable jobs and empowerment of previously disadvantaged. • Promote industrial development and stimulate internal competitiveness of KwaZulu-Natal\'s economy. • Providing support to small towns to stimulate their economies • Support for the development of SMMEs Central to this tenet is an urgency to build the economy through competitive investment and development programmes. Distributed around the Province, KwaZulu-Natal has a number of such economic development projects in progress. In order to facilitate economic growth, centralized provincial funds are managed by the Provincial treasury. These include: 1. The Provincial Growth fund the mains purpose of which is the provision of capital for large infrastructure projects to seed private sector investment. 2. The Poverty Alleviation Fund is aimed at financing small scale community or individual driven economic projects and provide a safety net for the poorest of the poor. The fund will be used to stimulate micro-enterprise development and will support co-operatives and related enterprise formations linked with IDP projects. The idea is to encourage people to play a practical role in the economy by offering them a seed fund to kick-start their own income generating businesses. The focus will be on viable sectors such as agriculture, transport, tourism, health and micro-manufacturing. At present the KwaZulu-Natal government is planning to spend billions on infrastructure to meet its wished-for 6% growth targets. From new locomotives to the upgrading of strategic rail links and the building of new stations, road restoration as well as the increasing port capacity, mutual advantage can be derived from private public partnerships in these opportunities. An integrated transport plan has been submitted to the Treasury for a major upgrade of transport facilities and a people mover within the city centre is being planned. In addition to its existing roads, KwaZulu-Natal's 14000 km of local and 1 300 km of freeways are being upgraded. Durban's public transport system (taxis, buses, minibuses) is being overhauled. Dube Trade Port Central to KwaZulu-Natal's logistics development will be the Dube TradePort (DTP), which will include the state-of-the-art King Shaka International Airport. The Dube TradePort is to be situated about 30 kilometres north of Durban\'s city centre, in close proximity to the Indian Ocean. Further development of the transport corridor, linking Durban to Gauteng, the inland economic heartland, means that Durban can supply Gauteng with a variety of manufactured goods. The Dube TradePort will be connected to the national N2 freeway and the busy R102, with a railway station alongside the site. In the future, the new dual freeway road corridor between Durban and Richards Bay will stimulate growth by effectively linking to the two ports. The overall aim is to integrate air, land and sea transport. The development will incorporate an air platform for both freight and passenger use, in addition it will be linked with other cargo-driven airports such as Johannesburg International Airport, thereby unlocking additional sources of revenue. The multibillion-rand initiative will also contain commercial developments such as hotel and conference facilities, as well as service activities, residential elements, and a resource centre focusing on training workers to international standards. This exceptional project is expected to provide an outstanding environment for manufacturing, agro-industrial, logistics, transportation and e-commerce related activities. These measures will ensure that KwaZulu-Natal remains strong in transportation and logistics; contributing to the southern African economy for decades to come. The development will provide a boost for the participation of the southern African region and the entire African continent in the global economy. Construction on Durban\'s new international airport, King Shaka International, is set to begin in 2007. The project, which has had slow start, will be operational by 2009, thanks to a R1, 7 billion, three-year allocation from the provincial treasury. The total investment required for the airport, is about R2, 5 billion and the Development Bank will provide R500 m in debt funding. Durban International Airport will relocate to King Shaka International when it is operational. The spin-offs will not only be in trade but in tourism. There will be more international flights to our province, which will provide easier access to the wealth of attractions present. In addition, large industrial and commercial developments are being built from Mt. Edgecombe and Simbithi right up to Richards Bay. Richards Bay The Zululand region is making huge strides in attracting both local and foreign investment. However, the success of the Industrial Development Zone (IDZ) depends on the sustained efficiency of the region's infrastructure. Driven by the country\'s economic growth, the National Ports Authority has announced that Richards Bay will receive a R600-million boost for the upgrading of the coal terminal and improvements to the bulk liquid berthing capacity. Port Manager Thami Ntshingila said that the 2006 investment will enable the port to handle increased cargo volumes and also reduce the costs of operating out of the port. This upgrade will make the facility the world's largest coal export terminal. The cost of the expansion will be borne by RBCT's shareholders which are; AngloCoal, BHP Billiton's Ingwe, Xstrata, Evesizwe, Kanga Coal, Sasol and Total Coal South Africa. The expansion will be completed by July 2008. To further facilitate efficient transport from the coal fields of Mpumalanga, Spoornet is expected to spend R 3.8 billion over the next five years on upgrading the coal line between Witbank and Richards Bay. Transnet has announced that it would spend R 3.5 billion on 110 new locomotives to boost the capacity of its Richards Bay Coal Line by 30%. It is thought that 85% of all goods and services required will be sourced from local suppliers and the expansion project will generate the creation of jobs and likewise work will be created through the development of new mining operations. Emphasis is to be placed on developing human capital, to ensure that with the added capacity, a skilled and technically-trained staff is developed. World Cup 2010 Of significance is the World Cup in 2010, which will contribute greatly to stimulating economic growth and investment. Economists estimate that the economic effect of staging the World Cup could boost the country's GDP by a massive R21 billion (€2.68 billion) with the construction sector alone benefiting by an expected R2.3 billion (€287.5 million) through spending on new and upgraded stadiums and infrastructure, especially roads and hotels. The development and rolling out of the 2010 soccer strategy that ranges from establishing a soccer academy, a coaching school, a schools' soccer league, developing translators in all the international languages is an all-inclusive and strategic exercise for the Province. The anticipated influx of visitors for the 2010 World Cup augurs well for the development of tourism in the region. By 2010, 10 new hotels would be built in Durban. The government has indicated that small and medium enterprises will be afforded a key role in the public and private infrastructure and other improvements that are expected in the build-up to World Cup 2010. This significant opportunity for both entrepreneurs and investors could just be the catalyst that the SMME sector has been waiting for, with an expected 159,000 jobs created. Senzangakhona Stadium The new Senzangakhona Stadium, named after King Shaka's father, which was unveiled in June 2006 at Durban\'s ICC by KwaZulu-Natal\'s Premier S\'bu Ndebele and eThekwini Mayor Obed Mlaba, will be a world-class stadium. The first-class multi-purpose sporting facility will be built by the Ibhola Lethu consortium on the site of the existing King\'s Park stadium. Projected capital expenditure on construction of the stadium is R1, 6 billion, making it the most ambitious construction project undertaken in South Africa to date. The stadium will have a seating capacity for 70 000 people, cover 320 x 280 square metres and will be 45m in height. According to Durban's Mayor, 'the City of Durban is ready, willing, geared up and getting kitted out for 2010''. A host of other projects are in the pipeline to get ready for 2010 and these have much potential for investors. Sustaining Momentum It is not only the responsibility of government but the private sector in KwaZulu-Natal must develop an ongoing game plan in order sustain the current momentum so that we can all be on the winning side. In order to prosper, companies need to develop an innovative culture to be competitive and to invest in new technology and processes. At present, opportunities lie in providing products and services, which have unique value, and this requires a creative spirit. Research is essential and it is apparent that the most important business resource is no longer labour, capital, or land, but is knowledge. Acquiring intellectual capital is a powerful means of shaping the success of businesses today and in the future. This is especially relevant to being competitive in the global market, where the impact of countries such as China can be detrimental if a clear growth plan is not established. The overall health of the global economy is also a very important factor, via the demand for export goods. However, the effect of the stronger Rand on the export market has caused many businesses to reassess their strategy in the market place. Transformation Many of the top companies operating in the region, such as Grindrod, Toyota, Mondi and Sappi are committed to ensuring that their business concerns are not only sustainable and profitable, but contribute to the overall well being of KwaZulu-Natal s environment, resources, people, and economic growth. To avoid stagnation, the necessity to embrace change in organizations, companies, and government departments, is at the heart of progress in the region. With empowerment fast becoming one of the major differentiators for successful companies, any strategy that fails to incorporate a well-defined approach to Black Economic Empowerment (BEE) will have little relevance. The evolution of Black Economic Empowerment (BEE) has been a source of much controversy. However it is now apparent that such strategies are a source of any growth initiative and an increasing number of BEE deals are being finalized. Companies such as the Notae Group, Metallon, Enaleni Pharmaceuticals, Mondi, Afripack, KPMG and many more besides are leading the way of progress and reaping market benefits by using this South African business imperative to its fullest advantage in procuring business deals. As the companies meet the needs of black economic empowerment policies, they also are expanding! However, a mere change of ownership is not sufficient but mentoring and skills development is essential if such transactions are to be sustainable. Skills KwaZulu-Natal needs skills and opportunities exist to provide and nurture these. Learning opportunities and training programs are the venture capital of the future. Despite increases in the number of individuals participating in the labour market, skills constraints remain an impediment to faster growth in the South African economy. Currently wide-ranging legislation is aimed at promoting training and skills development in order to fast-track the improvement of world-class competence. There is significant capacity in the strong network of educational and training institutions to develop skills further. According to S'bu Ndebele in his 2006, State of the Province address, the Province of KwaZulu-Natal is currently aiming to forge strategic partnerships, not only with the traditionally affluent western nations, but also with third world countries with which South Africa shares a common history for liberation and similar visions of development An essential aim is to ensure that local knowledge is integrated with international expertise to develop new ideas and technological approaches in meeting global standards. Priority growth sectors include oil and sugar refineries, clothing and textiles, mining, metals and minerals, automotives and transport, chemicals, tourism, agriculture, information and communication technology, cultural industries, services and aerospace Current relationships have provoked a range of projects as well as the exchange of knowledge. Examples include: • Dry Land Rice and Mushroom technology has been imported from China to address the basic need of food security; • Furniture making and wood carving skills are being imported from Indonesia. Strong links have also been facilitated in the textile and garmenting industry. • Belgium has committed a R60 million rand grant over five years at 12 million rand a year to food security programme. • Invaluable insight into the organising, programming and preparation for the 2010 World Cup is being obtained from Germany. •Strong linkages have been established with India which has become a world leader in the field of science and technology. A Memorandum of Understanding was concluded on the evening of the 24th December 2005 with the Province of Punjab. This province, known as the "food basket of India", produces more grain and wheat than countries such as Canada and Australia, will be sharing their agricultural expertise with us. SMMEs Along with skills development, it is argued that small and medium enterprise development represents the core of local economic development. KwaZulu-Natal has become the third province in the country to open the offices of the Small Enterprise Development Agency (SEDA) - North West and Mpumalanga were the first. The launch of SEDA in KwaZulu-Natal well indicates the Province's commitment to the promotion of small medium and micro enterprises. The retention and expansion of the Province's broad base of medium to larger businesses, through local and foreign direct investments, is a key to future sustainability. But in addition, the development of small, medium and micro businesses should be perceived as a building block for current economic growth. The growing SMME sector has enormous potential to reduce unemployment, increase average household incomes, reduce the poverty gap, and increase the tax base. The "informalisation of employment" gained speed in the 1990's and has become a major feature of business in the Province, especially in Durban and Pietermaritzburg. The development of SMMEs has generated considerable interest in the Province, due its attractiveness to proponents of the free market ideology and the relief it may provide government in providing jobs for its people. As a consequence of increased competition and in part, through reduced employment by large firms and increased employment by smaller firms, Small Medium and Micro Enterprise (SMME) growth has occurred. SMMEs range from factories employing 50 highly skilled workers to the self-employed street trader. The SMME fund holds the key to the achievement of the goals of the Provincial Growth and Development Strategy. The SMME fund will target:- • Training and Skills Development programmes, •Growth sectors in the KZN economy and opportunities for beneficiation, • BEE deals with the focus on reviving township and village economies through the establishment of village markets, craft markets, franchising etc; By the end of February 2006, Ithala Development Finance Corporation, KwaZulu-Natal\'s major development agency, had approved 678 SMME applications for loans totalling more than R471 million. A number of other bodies have been formed to promote SMMEs e.g. • The Department of Economic Development has established the Small Enterprise Development Agency (SEDA). • The Ethekwini business Development Centre. • Durban Chamber of Commerce Advice Desk Tourism SMMEs are being supported by various government and public-private initiatives. SMMEs have particular advantages as they transfer the benefits of tourism spend directly into the pockets of SMME owners and operators. Further Smme's can occupy niches that connect tourists directly to some of South Africa's world class experiences and best kept secrets Local Economic Development Local economic development refers to those initiatives that help strengthen the economic base and competitiveness of a locality, through improved access of local enterprises to market opportunities and enhanced collective efficiency of businesses. In South Africa, the Integrated Development Plans (IDPs) that are based on the principles of participation have been effective in uniting local stakeholders around programmes of development. The KwaZulu-Natal Local Economic Development (LED) support program is a six year program supported by the European Commission (EC). The program will support LED initiatives, provincially and initially from four selected 'learning areas' - the Districts of uMgungundlovu, Umkhanyakude, Uthungulu and Ugu. It is worth some 37 Million euros. A major challenge for locality development in KwaZulu-Natal will be to go beyond the once-off impacts of public works programmes on employment, business formation and income generation and to focus on complementary private investment in economic activity geared to commercial markets. Both the Extended Public Works Programme (EPWP) and the Municipal Infrastructure Grant (MIG) provide such an opportunity. Many municipalities are actively looking for partners in growth. Some of the other major projects proposed or underway in KwaZulu-Natal include: • Richard\'s Bay Dry Dock - Privatized greenfield development on Portnet-leased land • Privatization [operating concessions] for 3 Municipal Airports: Richard\'s Bay, Port Shepstone/Margate, Pietermaritzburg (Oribi) • Port Shepstone Marina - public-private partnership; game parks and additional resort developments included in the Port Shepstone-Port St. John\'s corridor running for 200 km along the Indian Ocean coast. • The re-development of Port Shepstone beachfront, including the riverfront of the Umzimkhulu River into a world-class tourism resort • Lubombo SDI: Cluster of a dozen tourism/resort developments. • Richards Bay Industrial Development Zone • Lilani: once a luxurious health spa has all the natural resources and development potential to make it an ideal site for building and developing a successful holiday destination. In Durban a large number of projects can be found. The expansion of the ICC; development of the Bluff Headlands for public access and a Peace Centre; rejuvenation of the city's beachfront; South Durban Basin redevelopment projects, including proposals for a 'Unity Bridge' across the bay; a People Mover system and the Point Development project are just a few of the initiatives underway or being planned.. I firmly believe that with accurate research, 2006 will provide investors with great opportunities to find good investments. Entrepreneurs and investors must • Build, harness and channel capital to achieve goals • Think strategically • Use skills and education • Be innovative • And determined Here is to a year of us all increasing our financial intelligence and taking advantage of the many prospects available. It is important to stand together for what is best for the province, to make the most of all those assets. KwaZulu-Natal is ready to welcome entrepreneurs and investors! May KwaZulu-Natal have a future beyond all our expectations! The Winning Spirit Grant Adlam In March 2006, a packed stadium and thousands of other fans at home, watched as one of the most extraordinary games of cricket, ever encountered in the history of the sport, was played out before their eyes. Victory to South Africa seemed impossible in the light of the record- breaking target set. Astoundingly, the batsmen achieved the required runs and South Africans experienced a collective spirit of victory, optimism and national pride that was felt for weeks. The Protea's team had to compete on a level that they had never achieved before and did so highly successfully. We all want to be on the winning team and sporting victory is a current icon of achievement. The same principles that went into winning an international sporting event can be applied to those venturing into the market place. The 21 Century belongs to entrepreneurs; individuals who like the Protea\'s captain, Graeme Smith, have the courage to dream, who can see opportunity, and turn their dreams into reality. However, to achieve, motivation, planning, a competitive spirit, the utilization of assets and cooperative team play is required. Especially, as being successful in today's global world means having to compete resourcefully, effectively and to be innovative. The reward is in bringing home profit and adding value to the economy. KwaZulu- Natal shows all the signs of winning and a number of factors can be considered in contributing to this success. The South African Context KwaZulu Natal has to first be positioned in the overall context of the South African market. South Africa is a fast developing and growing economy with unlimited investment opportunities. United Nations secretary-general Kofi Annan, at the joint sitting of the South African Parliament in Cape Town (March 2006), described South Africa's success in relating to the wider world as the best model for the entire developing world. He stated that South Africa's robust economy, stable democracy, support for the rule of law and - perhaps most important - the fully inclusive constitution have made South Africa, a beacon of tolerance, peaceful coexistence, and mutual respect between people of different races, languages and traditions. According to revised StatsSA 2005 data, the current size of the economy, at an estimated R1.39-trillion, is one of the strongest in 50 years. The economy has grown by more than 4% every quarter since 2004 and is continuing on an upwards climb. The seasonally adjusted real GDP at market prices for the first quarter of 2006, compared with the fourth quarter of 2005, increased by an annualised rate of 4, 2%. The main contributors to the increase in economic activity for the first quarter of 2006 were the finance, real estate and business services industry, the wholesale and retail trade, hotels and restaurants industry; the manufacturing industry, the transport and communication industry, and the construction industry. The government is also powering ahead with its plans for the new Accelerated and Shared Growth Initiative. This strategy will build on the steady economic growth of about 5% with a view to making the envisaged 6% achievable in the next few years. An expectation for further growth is desired by many economists who are no longer easily satisfied with the present growth rate but predict that more significant levels will be achieved. This prediction is in accord with the South African Reserve Bank (SARB), in forecasting that the current period of economic expansion will continue. The South African Government has also targeted an economic growth rate of between 6% and 7% over the next decade. Inflation ought to remain in the range of 3% to 6% for 2006/7. The world economy, including a number of emerging markets, appears to ensure good prospects for a steady demand in exports but higher imports will make sure that the current account remains in