The Economic Potential Of The Ocean - Business Media MAGS

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The Economic Potential Of The Ocean

The ocean is SA’s next economic frontier offering previously untapped opportunities for development and employment, writes Duma Gqubule.

South Africa’s oceans economy could contribute R170-billion to the country’s GDP by 2033 compared with R54-billion in 2010, according to a government plan to unlock opportunities in the sector. The plan could create up to 700 000 jobs, the government says. In 2010, 316 000 people were employed in the oceans economy.

The number of jobs could rise to between 800 000 and one million by the year 2033. The Oceans Economy programme, launched in 2014, is part of the government’s Operation Phakisa (“hurry” in Sesotho) effort to bring together stakeholders from the public sector, business, labour and civil society to agree on concrete programmes to kick-start development in various sectors of the economy.

In his State of the Nation Address, President Cyril Ramaphosa provided an update saying: “Since the introduction of the oceans economy in 2014, we have secured investments of nearly R30-billion and created over 7 000 direct jobs.

Investments have been mainly in infrastructure development, marine manufacturing, aquaculture, and the oil and gas sector. Expected investment in the oceans economy over the next five years is estimated at R3.8-billion by government and R65-billion by the private sector. These investments are expected to create over 100 000 direct jobs and more than 250 000 indirect jobs.”

Plentiful opportunities 

South Africa has 3 900km of coastline with an exclusive 1.5-million kmeconomic zone, which extends 370km from the coastal baseline. This area is larger than the country’s land mass of 1.2-million km2. Within this sea zone, South Africa has exclusive rights to explore and use marine rights. Every year, more than 30 000 vessels pass through South Africa’s seas with 13 000 docking in the country’s ports.

There are about 80 oilrigs off the Western Cape coast that require land-based operational support. The country also has huge potential resources of oil and gas.

In February, oil company Total and its partners announced that they had discovered a potential one billion barrels of gas at the Brulpadda block off the Western Cape coast. The find could yield up to $1-trillion, according to analysts.

The Operation Phakisa Oceans Economy initiative is a Department of Environmental Affairs programme that involves more than 20 departments and stakeholders from civil society. It has six focus areas: marine transport and manufacturing; offshore oil and gas exploration; aquaculture, marine protection services and ocean governance; small harbours development, coastal and marine tourism; skills development and capacity building; and research, technology and innovation.

The four largest sub-sectors  — marine transport and manufacturing, ocean-related tourism, construction, and fisheries and aquaculture — accounted for 85 per cent of the oceans economy’s GDP contribution in 2010. In employment, three sub-sectors — tourism, construction and fisheries and aquaculture — accounted for 89 per cent of the jobs in the ocean economy.

Big growth anticipated

In 2010, marine transport and manufacturing contributed R16-billion to GDP, which was equivalent to 30 per cent of the oceans economy. It also employed 15 000 people. By 2033, the sector could contribute R42–R61-billion to GDP and employ 40 000 to 56 000 people.

In 2010, coastal and marine tourism contributed R15-billion to GDP and was equivalent to 28 per cent of the oceans economy. It employed 90 000 people. By 2033, the sector could contribute R25–R35-billion to GDP and employ 150 000 to 225 000 people.

In 2010, construction contributed R8-billion to GDP and employed 162 000 people. By 2033, its contribution could increase to R21-billion and employ 400 000 people.

In 2010, fisheries and aquaculture contributed R7-billion to GDP and employed 30 000 people. By 2033, the contribution could increase to R16-billion and employ 200 000 people.  The Total gas find could be a game-changer in the oceans economy, one that could eventually result in upward revisions to all these projections.

Image: The KZN coastline

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