Zuma sets course for investment in South Africa’s ‘ocean economy’

Out-Law News | 17 Oct 2014 | 5:26 pm | 1 min. read

South Africa’s president Jacob Zuma has announced plans for a range of ‘ocean economy’ projects to boost growth in infrastructure, operations and skills development across the country.

Zuma said a ‘national marine spatial planning framework’, expected to be drawn up by the end of 2015, would help identify investment projects in marine transport and manufacturing, offshore oil and gas exploration, aquaculture and marine protection services and ocean governance.

Zuma said proposals under the framework would be linked to 'Operation Phakisa', a programme that sets out “priority” areas to support infrastructure and skills development in tourism, freight and logistics and the automotive and rail sectors.

Operation Phakisa, which forms part of South Africa’s National Development Plan, is based on adapting methodology applied by the government of Malaysia in developing that country’s “economic transformation programme”.

Next year will also see the publication of an ‘Oceans Bill’, as part of legislative and regulatory measures that Zuma said would guide initiatives to expand South Africa’s ports’ capacity for repair work on ships and oil rigs. There would also be a target of boosting locally-made components for boat and shipbuilding by 10%, Zuma said.

“The work stream on offshore oil and gas exploration has set a target of drilling 30 exploration wells in the next 10 years,” Zuma said. “Over the next 20 years, this work could lead to the production of 370,000 barrels of oil and gas per day. The result would be 130,000 jobs and a contribution of $2.2 billion to gross domestic product (GDP).”

In addition, Zuma said South Africa is working to establish a national shipping company in partnership with South Korea.

A report released by South Africa’s National Treasury in 2012 (16-page / 908 KB PDF) said that, in recent years, the government had sought to accelerate public infrastructure spending, while also encouraging greater private sector investment. The country’s public sector capital investment stood at 7.4% of GDP in 2010, while investment by private enterprises amounted to 12.2% of GDP.

The African Development Bank’s ‘Results-based Country Strategy Paper for South Africa’ (34-page / 384 KB PDF) for 2008-2012 said major investment plans by state-owned enterprises such as Transnet presented opportunities for further involvement by the private sector in supporting greater investment in the nation’s infrastructure.