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South Africa has been slipping on the world’s Ease of Doing Business rankings’ occupying 84th place out of 190 economies according to a 2022 World Bank report. That report has since been replaced by a new “Business Ready” ranking and the city that plans to stand out and become the easiest place to do business in Africa is Cape Town. Cape Town Mayor Geordin Hill-Lewis has launched an ease-of-doing-business index that will track ten critical indicators. Hill-Lewis told BizNews that the index will have a special focus on enabling greater infrastructure investment. He also said that he is still confident that Cape Town will be the first city in South Africa that stops load-shedding.
Extracts from the interview
Cape Town set on improving services that are under its control
We want to be the easiest place to do business in Africa. That is our ambition and we are dead set to achieve it. The way that we’re going to do that is by holding ourselves publicly accountable on a set of index indicators, which we have developed over the last months and those are all indicators which are internal to the city. In other words, things that we can control entirely ourselves. If they are not going well, we have no one else to blame, no one else to hold responsible other than ourselves. So, of course, businesses would immediately say, well, load-shedding is not on there and crime is not on there and logistics; the performance of the Cape Town Harbour is not on that. Those are many excellent points and all related to ease of doing business, of course. But we are looking at holding ourselves accountable for what we have full and total responsibility and control over things that are endogenous to the city’s ecosystem. So, that’s what this ease of doing business index is about. With this index, we are also launching an annual survey of the Cape Town business community where we get that feedback loop as to how we are doing. So, we are not marking our own homework, we are not saying we are doing great and look how well we are performing.
Aiming to be more business-friendly than Nairobi, Kigali and Gauteng cities
It’s not just about competing with other South African cities, but African cities. When I was elected, the World Bank Ease of doing business index was still in place. As you know, that’s now fallen away, which is why we needed to develop our own index. Cape Town was not the easiest place to do business on the African continent, and South Africa was not the easiest country in Africa to do business. Now, that is shameful, that is totally unacceptable for our country and we are going to try and put that right here.
It will lead to a kind of bifurcation. In many respects, we have already seen that. Cape Town has just overtaken Gauteng in approving the highest value of building plans. That’s never happened before until now. So, there’s a huge bifurcation in property investment. There’s a bifurcation in property values, and we want there to be a bifurcation in business investment as well because we want to address unemployment and get people out of poverty.
Confident that Cape Town will be the first major city to stop load-shedding
As we are talking, we are now in stage six of load-shedding. I wish I could make them go much faster. I want the load-shedding finished NOW. It is absolutely killing our national economy. It is strangling our country but there’s no silver bullet. It requires building new power projects and slowly connecting them to the grid as they come online and that takes time. But we are watching that timeline, we are trying to accelerate it as fast as we can and we are still confident that we will be the first major city that stops load shedding in South Africa or at least protects residents from four stages of load shedding by the end of my first term in office [early 2026]. We said that we want to protect residents from four stages of load shedding which prior to this year was very rare and accounted for
Cape Town launches Ease of Doing Business Index to drive economic growth and job creation
City of Cape Town Media Release, 9 May 2023
Cape Town Mayor Geordin Hill-Lewis has launched the City’s new Ease of Doing Business Index, with the ambition of making Cape Town the easiest place to do business in Africa. The index will track ten critical indicators for ease of doing business, with a special focus on enabling greater infrastructure investment and economic growth in Cape Town. The ultimate aim is to create more jobs in Cape Town by building a business-friendly environment. The Index was launched at City Hall on Tuesday 9 May by the Mayor, City Manager Lungelo Mbandazayo, and Alderman James Vos, Mayoral Committee Member for Economic Growth. Read more below.
The launch of the Index follows a city-wide survey of businesses and engagements with various industry bodies. Feedback from the private sector informs the indicators which the City will track to improve its business-facing services.
Cape Town’s Index also builds on the findings of the 2018 World Bank’s Sub-National Doing Business (SNDB) Survey, which ranked Cape Town as the top municipality in the country for granting electricity and construction permits.
The City now aims to reduce the time, costs and complexity of processes across these ten critical indicators for Ease of Doing Business:
- Building Plan Approvals
- Getting Land Use Rights
- Getting Electricity
- Connecting To the Water Network
- Rates Clearance Certificates
- Informal Trading Permits
- Digitisation of City services
- Permissions to lay fibre internet cables and pipelines
- Public Land Transfers
- Obtaining a Business Licence
‘We aim to make it much easier for businesses to start up, invest and expand in Cape Town, with a plan to not only be the easiest place to do business in South Africa, but in Africa overall. When businesses thrive, more jobs are created, helping more people out of poverty over time. We are encouraged by our city consistently having the lowest unemployment rate of metros, but so much more still needs to be done to enable job-creating economic growth.
‘We especially want to see faster, simpler and more cost-effective development approval processes to drive economic growth and job creation. That’s why much of Cape Town’s new Ease of Doing Business Index focuses on enabling infrastructure investment, from building plan approvals to connecting with the water and electricity network. We are on a journey of culture change in the City to make our government much more efficient, responsive and digitally accessible,’ said Mayor Hill-Lewis during an address at City Hall to launch the Index.
Alderman James Vos said the City intends using this new Index to be publicly accountable, with all progress viewable in real-time through an online dashboard, accessible at www.investcapetown.com.
‘We know that for businesses, time is money. My hope is that these measures will push the City to be quicker and more capable so that Capetonians can simply get on with the business of business,’ said Alderman Vos.
A bespoke governance structure will track progress across the ten indicators under the Mayoral Priority Programme for Ease of Doing Business.
The priority programme is already achieving encouraging progress, including:
- Automating Property Rates Clearance Certificates, reducing turnaround times to just four days once all support documentation is received
- 75% faster water connections for businesses by upping the City’s capacity to manage contractors better
- An upgraded online Development Applications Management Portal to streamline building plan and land use approvals
- Slashing the average number of days to get an informal trading permit from 43 to 26, with an online permitting system and a R256m injection into trading bay and service upgrades over the next three years
- Plans to end load-shedding over time by buying power on the open market
- Online application process for normal and small-scale embedded generation (SSEG) electricity applications which will significantly improve the electricity connection process
- Upgrades to the City’s digital ‘C3’ system for reporting service delivery issues, including a new status update function for outstanding requests
- The City has completed an organisation-wide heatmap, which classifies the current state of process automation or digitisation using a colour grading system where green means fully automated, amber means semi-automated, and red means not yet automated. This progress will now be tracked as part of the EoDB Index.
- Accelerating the rollout of fibre internet, pipelines and utility cables by fully digitising the ‘wayleaves’ permission process, with improvements in recent years already seeing an 83% reduction in application approval times
- Plans to digitise the Business Licence system for City Health approvals
- More efficient public land transfer by consolidating conveyancing services, with aspirations to digitally integrate with the national government-run Deeds Office
Issued by: Media Office, City of Cape Town
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