By Miyelani Mkhabela
Johannesburg - Faiez Jacobs is a South African politician who serves as a member of the National Assembly for the governing ANC. He took office as an MP on May 22, 2019.
Jacobs started his political life in 1986–1990 at high school, as a leader of the Congress of South African Students and the Western Cape Students Congress (Wesco). In 1989, he became general secretary of Wesco, led the Defiance Campaign in high schools across the Cape, and was later detained at Victor Verster Prison for his political activities.
In 1992-93, he became a vice-chairperson of the SRC while studying at the Science Faculty of UWC, and subsequently chairperson of the Delft RDP Forum from 1992-93 and, from 1993-94, he integrated as an Umkhonto we Siswe cadre into the National Peace Keeping Force De Brug. His passion for education made him an elected Western Cape ANC election student and education coordinator in 1994.
In 1995–1999, he served as a National Education, Health and Allied Workers' Union (Nehawu) Western Cape provincial education secretary. In 1997, he conducted the first political school on Robben Island and trained more than 500 shop stewards on basic leadership, labour relations, basic conditions of employment, and political economy: class, race, and gender.
He served as a provincial executive of the Western Cape SACP, PEC of ANC Youth League, PEC of Cosatu, WC Cosatu Provincial Educators Forum, and represented Cosatu on the National ABET Forum.
In 1998, he represented Nehawu and Cosatu on the Board of Cape Technical College.
From 2015 to 2019, Jacobs served as the provincial secretary of the ANC Western Cape, leading delegates to the 2017 National Conference, where 180 delegates voted for change and renewal of the ANC.
The economy of the Western Cape is dominated by the city of Cape Town, which accounted for 70% of the Western Cape’s economic activity in 2022.
The single largest contributor to the region’s economy is the financial and business services sector, followed by manufacturing, while the fastest-growing sector in the Western Cape is agriculture and agroprocessing, with above 40% growth in the past decade.
Jacobs is committed to the economic expansion and business transformation of the Western Cape, with a focus on agriculture and agroprocessing, financial and business services, manufacturing, hospitality and tourism, transport and utilities, and the future of infrastructure and energy generation and its maintenance in the Western Cape for a stable and reliable investment destination.
The Western Cape has resilient human capital with a high potential for innovation and excellence. This cohort of specialists must be categorised into their sector appetite and afforded the opportunity to build a new breed of conglomerates to be listed in domestic and global stock exchanges for maximum resilience, good governance and accountability.
The Western Cape needs to contribute to climate change mitigation and adaptation, as well as sustainable energy; foster sustainable development and efficient management of natural resources such as water, soil, and air; and further contribute to the protection of biodiversity, enhance ecosystem services, and preserve habitats and landscapes.
The Western Cape is in an unemployment crisis, with a narrow unemployment rate of 27.5% in the second quarter of 2022.
The declining labour force participation rate indicates a working population that is losing hope and is less willing to actively seek employment opportunities.
Growing unemployment levels will exacerbate the long-term trend of rising income inequality in the Western Cape. By the second quarter of 2022, employment levels were still 6.3% lower than before the pandemic.
Compared to the rest of South Africa, the Western Cape has a more service-oriented economy with a relatively strong contribution from the finance sector and a unique dependence on the tourism and wine industries. In 2021, the Western Cape was the third largest regional economy in South Africa, accounting for 14.2% of the South African economy, behind Gauteng (35.2%) and KwaZulu-Natal.
In 2018, the Western Cape was the second largest contributor to the economy, with 22% of the GDP, behind Gauteng with 37%. Now Western Cape GDP has plummeted below KZN, which remains at its 2018 GDP contribution of 16% to the country.
The Western Cape dropped with 7% GDP contribution to the country in four years, and those are signs of an economy that relies on financial services, agriculture, and tourism but has not diversified and transformed. The Eastern Cape and KwaZulu-Natal provinces will still take a good margin from Western Cape, mainly with Transnet Cargo and freight moving to the Eastern Cape province. Since the Northern Cape contributes 2% GDP to the country, it means the Western Cape has lost four times the value of Northern Cape, or the exact value of Mpumalanga or Limpopo.
In the R12 million loss in the tourism industry, a huge percentage points to the Western Cape, and the authors suggest that the province, with this current leadership, will struggle to experience economic recovery. In the context of relatively slow economic performance over the last decade, the agriculture sector significantly outperformed other sectors in the province.
The inspiring performance of this export-driven sector provides hope and possibly some future policy insights that could be applied to the rest of the economy. Agriculture (44%), mining (1.7%), manufacturing (4.4%), utilities (13.7%), construction (20.7%), government (21.8%) and personal services (16.9%).
While fixed capital stock declined to 16% in 2021 from 18% in 2018 and 2019, fixed investment is an important indicator of long-term potential productivity. It includes the accumulation of physical assets such as machinery, land, buildings, installations and vehicles.
All things being equal, an expansion in fixed capital allocated per worker will increase productivity per worker. Gross fixed capital formation, net fixed capital formation, and fixed capital stock (FCS) continue to decline annually.
Growth in FCS signifies an increase in production capacity and a positive economic outlook, and that’s not the case in the Western Cape. We cannot forecast a positive economic outlook as a result of drastically declining FCS.
On the health-care front, the number one cause of death in the Western Cape is diabetes (7.6%), followed by ischemic heart disease (6.1%), cerebrovascular disease (5.9%), HIV (5.7%), chronic lower respiratory disease (5.1%), and TB (4.1%). Nationally, South Africa's health care competitiveness is at 58%, based on the Global Competitiveness Report, which demands high attention from all provincial MECs for Health and the Minister of Health to have a strategy to improve health competitiveness to at least 80% before future crises attack the nation.
The Western Cape government’s greatest future weaknesses lie undoubtedly in its health and infrastructure mandates, as infrastructure needs increased investment for upgrades and continuous maintenance and modernisation.
The greatest strength of the Western Cape is education, but education must be transformed to impact positively on black people in the province if they are to see value for their investment.
The politics and business of the Western Cape are controlled by whites, and black people are workers in both the public and private sectors. Over the past decade, the Western Cape has been subjected to a relatively substantial expansion in informal settlements (25.2%), which will impact housing and municipal service demands.
The number of houses built by the government in 2021/22 accounted for 1.05% of the registered housing demand in 2022. By way of example, take Boschendal Wine Estate. The vineyard is about 1 700 hectares, and not far from there is a town called Pniel that’s not even a hectare.
This scenario is one of many in the Western Cape where people aren’t valued and the restaurants in vineyards are massive, even bigger than the farm towns where black people live. Racial poverty is a harsh reality in the Western Cape.
The challenges of shared growth and stakeholder capitalism are deeply rooted in the Western Cape, and this will have disastrous consequences with limited opportunity for serious interventions.
The Western Cape must give the ANC a chance to govern the province for economic expansion and business transformation, to mainstream black people to own a percentage of Western Cape agriculture, manufacturing and financial services, as most black, Indian, and coloured people have developed levels of sophistication and extensive experience in multiple industries.
Inequality is a reality at the Western Cape, where vineyards dating from 1670 to 1750 were all owned by white people. The government is working on transforming Durbanville, Stellenbosch, and Franschhoek vineyards through special acquisitions for transformation purposes.
Failure to operate an inclusive growth and transformed business is inviting unexpected economic challenges with high unemployment, inequality, increasing crime and old infrastructure that’s not properly managed and maintained.
With the past three years of decreased productivity and low revenue collection, we can confidently put the Western Cape province at risk for future economic shocks and poor employment growth.
Transformation has become a huge risk that the current Western Cape leadership hasn’t mitigated, and experienced professionals are leaving for their traditional provinces for better job opportunities and to escape underemployment in the Western Cape.
An economy is a balance of managing productivity, trade, consumption and investment, and when professionals and consumers leave the province, the province will struggle. The Western Cape is facing uncertain times that need a strong service ethic and mindful leadership to start governing the province.
We must mitigate the shrinking economy and transform business for shared growth and sustainability. In a diversified nation with multicultural organisations, leaders need to learn to create value out of diversity. There is a cosmetic diversity that can come when an organisation decides they need internal diversity when they meet external stakeholders who are diverse.
Those stakeholders need to be interacted with by someone like them, but the Western Cape political leaders posture apartheid attitudes toward the black people, the coloureds, Africans and Indians, who constitute more than 75% of the Western Cape population.
The ANC invites all businesses, professionals and the entire society to collaborate for a government by the people and for the people to realise a better life for all.
Miyelani Mkhabela is a South African economist and capital markets strategist, writing in his personal capacity. Contactable at: [email protected]