The Durban economy: more than sandcastles and shipping

Disclaimer: Please note that this article is at least 12 months old.
Any information herein was accurate when published on 3 June 2008

Subscribe to the Industry News newsfeed

While Johannesburg and Cape Town typically command most of South Africa's attention when it comes to discussions around the economy, Mark Stewart, managing director: BDO Spencer Steward (KZN) Inc. maintains that Durban's local economy is one that cannot be ignored. Less panicked by economic fluctuations, this burgeoning city has the potential to become one of the showcase cities of both South Africa and the continent.

“Durban has a number of economic opportunities working in its favour. While the port and established industrial sector continue to be active economic contributors, tourism is also growing at a phenomenal pace,” says Stewart. “This is an area I believe the local economy will come to rely upon more and more.”

Stewart identifies five main areas critically linked to this economy's sustained growth. The first of these is entrepreneurial activity. “Durban's economy is largely an entrepreneurial one. Within this sector, knowledge is a critical commodity and, as such, we see a high prevalence of service driven SMEs, including those of IT and financial services. These are well supported by the established corporates in the area.” He mentions, however, that knowledge barriers to creating this type of SME remain high, and that entrepreneurs without formal qualifications are increasingly taking advantage of another main growth area – tourism.

While Durban is already well positioned as a local tourist destination, Stewart believes that the city is becoming far more aggressive in promoting itself to international travellers, “Durban is ideally placed to compete with Cape Town on the international front. We have an incredible climate, fantastic wildlife, and a rich cultural heritage and history. We have also been identified as a very ‘friendly' city – making us potentially more attractive to jittery tourists.” He adds that the International Convention Centre continues to be popular, both nationally and internationally, with the 12 000 delegate Tourism Indaba taking place in early May.

Export-focused manufacturing is another growth area local government and business are targeting. “Manufacturing has shifted away from the more traditional textiles and assembly to higher value-added sectors, particularly those of chemicals and metals. This has created a new set of skills requirements within Durban's economy, and offered more of the province's graduates local employment opportunities. That being said however, the growth potential of manufacturing in Durban is inherently linked to our ability to provide and retain these necessary skills.”

Stewart adds that Durban's harbour needs to continue to focus on developing and increasing its freight logistics centre capabilities in order to grow. Due to the significant investment in the expansion of the Maputo harbour, Durban may see increased competition from its regional neighbour. The new Dube Trade Port and King Shaka International Airport will act as much needed catalysts in this area, creating associated employment opportunities.”

The fifth and final sector Stewart identifies as one to watch is that of Durban's infrastructure. With the 2010 stadium already having boosted construction in the area, and government having several other development projects underway, the local economy looks set to benefit both from the employment these generate and having improved infrastructure in place. “These projects have substantial knock-on effects in boosting the other four growth areas.”

While the average South African's perception of Durban may be that of a “laid-back” coastal town where one can sun-tan and surf, this would seem to be an extremely limited one. With a stable local economy poised for further growth, Durban looks to be a city determined to make its presence felt on both the local and global stage. In Stewart's words: “Keep watching this space!”

Disclaimer: Please note that this article is at least 12 months old.
Any information herein was accurate when published on 3 June 2008