Interview with CEO of the iLembe Chamber of Commerce, Industry and Tourism

The Local Economy is Key to Business Success
It is at local economic level that a business can thrive or die. Local authorities must heed business communities’ pleas for progressive policies, says Cobus Oelofse, CEO of the iLembe Chamber of
Commerce, Industry and Tourism.

The saving grace of our country will lie in the wellbeing of our local economies, because business happens locally. Local and district municipalities across South Africa deliver the utility services that businesses require, maintain such infrastructure, enforce by-laws and determine tariffs
and tariff structures that aid competitiveness. It is in the local economy where the business environment is either made or broken.

This was the nub of a discussion this newsletter had with Cobus Oelofse, CEO of the iLembe Chamber of

Commerce, Industry and Tourism, on the role of business within iLembe, key concerns of the business sector and how the business environment can be enhanced to unlock economic growth. Oelofse stressed that business chambers should not be seen as pressure groups but rather, in the South African
context as social partners that promote and protect the interests of business and the business community. Government at local, provincial and national spheres exert a great deal of influence on the way business is conducted through policies, rules and regulations.

Focus, time and interest seldom allow individual businesses to engage on behalf of the collective on, for example, matters of policy or process. Therefore, the Chamber promotes the collective interests of business, through engagement with and representation to relevant government departments – often not only addressing concerns but also making suggestions to promote and safeguard interests of the business community.

The Vision
The vision of the iLembe Chamber of Commerce, Industry and Tourism is to represent, promote and energise local business thereby fostering a strong economic environment that will make ilembe District the preferred place to do business in.

The iLembe District – the smallest district municipality in KwaZulu-Natal – wedged between Durban and
Richards Bay, consists of four local municipalities, viz. KwaDukuza, Mandeni, Maphumulo and Ndwedwe.
The Chamber has great confidence in the economy of iLembe District and hence pushes for an environment that attracts and retains investors. “The iLembe Business Confidence Index (iBCI) consistently highlights concerns about infrastructure failings and decay, and the need for policies that create an
environment that is conducive for business,” said Oelofse.

Investor-friendly policies
He said there was a need for policies that keep abreast of what investors are looking for. He recently had an enquiry from a significant business about which KZN municipalities offer rebates for energy-efficient or green businesses – a future-proofing approach that would economically benefit any of the iLembe local municipalities if it was in place. “Hence, as a Chamber, we endeavour to influence policy that will ensure that our district remains attractive and appealing. “The lifestyle of iLembe District, our KZN North
Coast beaches, weather and sought-after lifestyle are all important and positive factors. But we also need to be obsessed with looking after our economically-critical infrastructure. “It is not only the roads that must be maintained. The state of our beaches is also paramount if we want to attract, especially, overseas visitors. The high spending visitors that we need to target do not wish to deal with anti-social behaviour, disorderly informal trading or filthy beaches.

A comparative study was recently conducted by Urban-Econ Development Economists into municipal rates and tariffs to ascertain the competitiveness of the KwaDukuza commercial property sector when measured against the Johannesburg and eThekwini Metropolitan Municipalities and the George and Stellenbosch Local Municipalities.

“The commercial property sector is viewed as the backbone of local economic growth and development
within the KwaDukuza Local Municipality, currently and in the future.

“The competitiveness and long-term sustainability of this economic sector is fundamental to the socioeconomic well-being of the KwaDukuza region and its surrounds, as well as the financial viability of the local authorities that benefit from property rates and municipal service/ utility revenues. “A region’s business value proposition is often dependent on competitive municipal tariffs, charges and fees. If
not, this catalytic regional economic sector will be vulnerable to investor rejection and business value
destruction, making it unsustainable in the long term,” said Oelofse.
The study ascertained that KwaDukuza Local Municipality is the most expensive municipal area for the development of retail property, among the study subjects, and the second most for the development of office and industrial property, after the eThekwini Metro. This represents a significant challenge in efforts by both the public and private sectors to retain and attract new investment and development into this municipality.

Remain competitive
Oelofse said rapid growth within the iLembe District has resulted, often, in infrastructure lagging and there was a need to continuously play “catch up”. He hailed the construction of the Dukuza substation as a significant step that is reassuring to new business investors and residents alike.
“We are well-positioned as a relatively new and fast-growing area to develop new, modern infrastructure,
although the upgrade of ageing or infrastructure not fit for purpose remains a challenge for our authorities.”
Oelofse said approaches and policies must be put in place that will enable iLembe District to remain competitive in the long term. Voicing disappointment, he said the Isithebe Industrial Estate, employing more people than all the Special Economic Zones (SEZ) in the country put together, and which
sits between the Dube TradePort SEZ and the Richards Bay SEZ, is not adequately attended to, protected and promoted.
“This is hugely frustrating, especially considering the hard work put in by the Mandeni municipal leadership and the iLembe Chamber’s Isithebe Business Cluster. I am afraid that it feels like Isithebe is always sucking the hind tit – it is a significant economic asset, not only for iLembeand KZN, but for the whole country,” said Oelofse. Ease of doing business, in line with the Vuthela iLembe LED Programme intentions, remains front of mind for the Chamber. In addition to policy, implementation of policy
and associated processes need to be streamlined in order for it to be a unique selling point in luring investors to iLembe. “The cost of doing business must be simple, it must be fair, easy to administer and most importantly, transparent. Too often investors are caught off-guard by charges that they were not made aware of when wooed. Businesses need to know what they are in for from the outset.”
“The local business community also shares the common national concern around corruption and value for money delivery of services and infrastructure,” Oelofse said. Oelofse indicated that the iLembe District was the second most impacted area, after the eThekwini Metro, by the April and May 2022 KZN floods, with 35 people sadly losing their lives in the disaster. The iLembe District should be prioritised for the restoration of especially road infrastructure that has rendered the municipality isolated from an access point of view. Oelofse said that such economic infrastructure n iLembe should be repaired without
unnecessary delay.

iLembe Business Confidence Index
Turning to the impact of Covid-19 on the business sector, he said the resilience of iLembe’s local economy was severely tested. “We are hopeful that we can quickly recover to pre-pandemic levels, especially in the tourism and hospitality sectors.” Oelofse said the 2021 iBCI demonstrated the hardiness
of the iLembe District’s economy during the pandemic, and a turn on a positive trajectory that was aided by the economic recovery strategy of the region. He said the iBCI was set against the backdrop of more
relaxed economic restrictions associated with the Covid-19 Risk Adjusted Strategy, the global negative reaction to the fourth wave in South Africa attributed to the Omicron variant, and the destruction of businesses and business confidence during the violent civil unrest that engulfed KwaZulu-Natal, and parts of Gauteng, during July 2021. According to the iBCI, political volatility in KwaZulu-Natal was also a debilitating factor for economic activities. The July 2021 unrest had badly dented investor confidence
and requires greater political stability to restore business assurance.