Being referred to as “the Detroit of Africa” was once a point of pride for our city but, as the global automotive industry faces its biggest disruption in a century, this can no longer be the basis of our longterm economic vision.
The economy of Nelson Mandela Bay was built around the internal combustion engine (ICE) but the global shift to new energy vehicles (NEV) and alternative, renewable energy sources requires us to refashion our thinking on the future economy of this metro.
We have long known the need to diversify the local economy and reduce our overreliance on the automotive industry; now it is a case of needing to fully reinvent it.
This comes at a time of major challenges to doing business, which has caused some multinationals to leave and impacted local companies to close down or restructure, contributing towards growing job losses and unemployment. And people are leaving. The 2022 Census results released last week showed that the Eastern Cape had experienced the largest outflow of people, 1.6-million over the past decade, mostly to the Western Cape and Gauteng in search of better opportunities as our provincial unemployment rate steadily climbed.
Reversing unemployment and creating more job opportunities and scope for entrepreneurs requires an enabling environment in which to do business.
We know the issues of crumbling infrastructure, insecure water and electricity supply, lack of service delivery, and red tape and bureaucracy that hinder new investment and the sustainability of existing businesses.
Coupled with that is the lack of social stability, the confluence of poverty, unemployment and inequality causing frustration, hopelessness, lack of dignity — and we have seen the results of that in Durban and Gauteng in 2021, and in frequent protests around the country on service delivery, employment and other issues.
A long-term solution thus calls for an economy that is not only reinvented to take advantage of the new opportunities presented in the transition to a low-carbon future, but that also takes people along with it to a better, more prosperous, future.
To answer the key question of “what will it take to save our city”, the Nelson Mandela Bay Business Chamber has assembled a Local Economy Reinvention Think Tank to consider the opportunities of the future economy and how to leverage our existing strengths and resources into new directions.
We believe the metro will always retain the strength of the automotive industry and its associated component suppliers, value chains and skills, but not in the way of the past.
While our key European markets are shifting fast to NEVs, we are behind the curve, with critical enabling policy yet to be finalised; threatening our export-driven local ICE manufacturing industry, while domestic demand is low, and Africa is unlikely to adopt NEVs on a large scale anytime soon.
However, we have strengths that can be adapted and diversified into the new opportunities of a new energy and mobility economy.
The planned R100bn Hive Hydrogen investment in one of the world’s largest green ammonia plants in our Bay is the potential anchor of a myriad of downstream opportunities such as manufacturing of electrolysers, small-scale hydrogen combustion engines, fuel cells, production not only of green energy but the equipment for generating that energy.
These are areas in which we have existing technology, manufacturing capabilities and skills that can be adapted and geared up to new technology needs.
The idea of an energy and mobility innovation hub links in with the thinking around Nelson Mandela Bay becoming a Climate Change Special Economic Zone, unlocking the economic opportunities involved in becoming a climatechange-resilient city.
We also have an underestimated strength in the pharmaceutical sector — another opportunity to take advantage of global gaps in medical devices and pharmaceuticals.
A further opportunity is moving to making components for older ICE vehicles and end-of-life engines still in use in countries not moving as swiftly yet to NEVs.
It takes some lateral thinking and linking what we have now to what is needed in the future economy, considering how we can adapt, repurpose and reinvent.
These are all opportunities being considered in the thinktank, with work streams formed to dig deeper and come up with achievable, practical solutions achievable over the short to medium term.
We can either focus on how things are now, lose hope and become victims of the new economy; or we can look at how things could be, reposition our thinking, build on our strengths to reinvent and diversify, and win in a new, sustainable economy.
We firmly believe that Nelson Mandela Bay, as a two port city and with untapped potential such as engineering and technical capabilities, is well placed to make this happen.
