The reflections by the UN Conference on Trade & Development that Foreign Direct Investment (FDI) into South Africa in 2015 dropped by 74% translate to strenuous economic times for the country. The reality is that South Africa drew $1.5-billion (R24.7-billion) in foreign direct investment in 2015. That is less than Nigeria and/or Mozambique. In addition, the whole of the African continent is experiencing economic challenges, said the World Bank and IMF. These world financial and economic bodies continue to say that 34 of 45 countries in sub-Saharan Africa are in a worse financial state than in 2008, when they had a fiscal deficit of 1.7% of GDP. The average is 3% now.
In addition, given the known macro-economic challenges and volatile world markets affecting the South African economy, this has culminated in the recent fluctuation of the South African currency and downgrade threat from the rating agencies such as Moody’s, who are currently on a fact-finding mission in South Africa. Others are expecting to visit the country later this year, i.e. Fitch and Standard & Poors.
“Our country is experiencing challenging times and calls for all South Africans to rally behind the SA government, support the monetary policy committee decisions, and ministry of finance and economic development in order to turn the tide around,” said Dr Ayanda Vilakazi, CDC unit head of marketing and communications.
CDC’s performance relative to the macro-economic challenges
“The CDC, like many other organisations in SA and the world’s developing countries in particular such as Brazil and India, has found the current economic landscape not conducive to stimulate investment and growth. The CDC does not exist in an island, as such the organisation is not immune to local & global economic challenges,” adds Dr Vilakazi. The CDC however, in spite of all the challenges confronting South Africa and global markets has managed to go against the tide to ensure continued growth and sustainability. The CDC’s five year strategy 2015-2020 is premised on financial sustainability.
The CDC as a catalyst for championing of socio economic development has consistently performed exceptional in ensuring that job creation remained key in stimulating the economic growth.
“The CDC achieved not seen before numbers by any other IDZ in Southern Africa; where in the last 3 years the CDC signed 37 new investors with a combined value of R4.94-billion and created 44,465 jobs well exceeding its targets over the same period for investment and jobs,” added Dr Vilakazi. Furthermore, the CDC has developed an investment pipeline valued at R181-billion; these are projects under discussions with the various companies locally and internationally. In general, the CDC’s projects in the IDZ and elsewhere have touched the lives of more than 6-million communities in the country.
The CDC’s contribution to job creation has seen the organisation win a number of national prestigious awards in the country. One which speaks to the priorities of the NDP is the Job Creation Award, which was presented to the CDC at the 14th Annual Oliver Empowerment Awards and at the Annual Exporters Club (Exporters of the Year) awards in 2015. In addition, the CDC has been nominated as finalists for the Top Empowered: Vision 2030 Award and the Top Empowered: Job Creation Award at the 15th Annual Oliver Empowerment Awards to be held at the Caesars Palace east of Johannesburg in April 2016.
Despite the economic tide, the organisation exceeded its jobs target by 101% in the 2014/15FY creating over 14 765 jobs (bringing the total to 96 776 since inception). These jobs were created through activities both within and outside of the IDZ.
In addition, the CDC exceeded its training and development targets by providing training to more than 8 147 (71 445 people since inception). As regards SMME achievements, 46.17% contracts were awarded to SMME by the CDC.
Retention of key & critical skills
The recently released report by Deloitte on Global Human Trends 2015 states that – global organisations today must navigate a “new world of work – one that requires a dramatic change in strategies for leadership, talent, and human resources. In addition, an increasing number of skilled workers in this new world work on a contingent, part-time, or contract basis.
The CDC is no exception to this; it operates in a highly competitive environment benchmarked with top institutions locally, nationally, and to a certain extent internationally. As a FDI destination, the CDC has both national and a global footprint requiring highly specialized, skilled, and experienced personnel to deliver on the vision of the CDC – to become the leading catalyst for championing of socio economic development in the EC and greater South Africa.
The CDC competes with other industrial developmental institutions for the available pool of skilled labour, including construction companies such as Group Five, WBHO Construction (Pty) Ltd, Murray & Roberts Holdings, Stefanutti Stocks, Aveng Grinaker-LTA to name but a few. In addition, “the CDC is a highly performance driven institution. We value knowledge, excellence, intellectual capital as they lead to optimal efficiency and output for the organisation,” said Zola Ngoma, CDC Unit Head: Performance and Talent Management.
“Globalisation teaches us to understand and appreciate the specificities of our contexts so that we can deal with them strategically, including competitive remuneration and benefits offerings.”
“With the CDC directly operating and competing in a global arena for business, and it being a hybrid of a professional services organisation and a resource based operation, it gives a different picture to the complex problem of human capital retention. The organisation has been equally successful in its retention strategies which make the issue of employee value appreciation even more pertinent.”
“It is thus important for organisations particularly in the Eastern Cape, including the CDC, to recognise its human capital resource base as valuable, rare, inimitable and non-substitutable considering how global the world has become and how rife the competition for talent has become.” Therefore, valuable human capital resource must be compensated in accordance with the knowledge, excellence, and intellectual capital in order to lead the optimal efficiency and output for the organization.
“CDC’s Retention Strategy is based on key principles, namely – managing people well to ensure directed and motivated employees, paying people competitively and rewarding superior performance, developing people and retaining the best by providing perpetual learning and challenge and lastly, establishing a work life culture and climate that is attractive and supportive,” added Ngoma.
What’s in store in 2016?
On top of its economic agenda, the CDC seeks to maintain its trajectory as the preferred FDI destination of choice. Core to its alma manta is consistency in ensuring that projects brought about in the IDZ translate to tangible jobs and skills development.
This year has seen the operational commencement of the Coega Dairy project worth R25 million in zone 3 of the Coega Industrial Development Zone (IDZ) having created over 650 jobs. The project consists of the expansion of the Coega cheese product line and installation of a ware house and office block.
“We particularly proud of this project cause of its impact on Small Micro Medium Enterprises (SMME), our focus on SMME’s has produced a significant increase in the number of youth owned SMME companies. Two of the three SMME companies who took part in the project were youth and women shareholders. To us at CDC, it is encouraging to see an increase in youth owned businesses,” said Andile Ntloko, CDC SMME unit head.
In addition, another project which recently became operational was WNS – call centre situated at the Business Process Outsourcing (BPO) in the Coega IDZ, which afforded over 600 youths jobs.
“As CDC we cognisant to the country’s high youth unemployment rate of 63.1% and the broad triple challenge of inequality, poverty and unemployment and as such make it a point that whatever project is envisioned encompasses the categories of youth and women to benefit from those projects,” adds Dr Vilakazi.
One of CDC’s flagship projects the Dedisa Power Peaking Plant (PPP) a 3.5 billion investment situated in zone 13 of the Coega IDZ currently celebrated five months of commercial operation since it came on line in September 2015 and created over 1490 jobs during its construction phase.
Alan Straton
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