The positive effects of the more than R5-billion rand in investment that the Coega project has already attracted to the Eastern Cape are being felt. Coega is providing a “platform for regional growth” in all sectors, says economist Dr Neal Bruton of Response Group Trendline. The Eastern Cape Development Corporation (ECDC) is the sole shareholder in the Coega Development Corporation company. “Our procurement policy which favours local businesses is helping to accelerate that growth,” says Coega Development Corporation (CDC) executive manager communications Raymond Hartle. The CDC is also helping local businesses to become more competitive by insisting that larger companies from outside the metro form partnerships with firms within the metro. “This is not window dressing. The companies are expected to train and mentor their local counterparts. We want Eastern Cape companies to be able to compete for both the big and the small projects here at Coega, nationally and ultimately internationally,” he says. Demand for those skills is going to grow fast, predicts Dr Bruton. “The Coega project provides a magnet for direct foreign investment into the Eastern Cape. As such, it has the potential to kick-start larger long-term development in the region,” he says. It is not only the manufacturing sector that will benefit, as there will be a knock-on effect to all sectors of the economy, believes Dr Bruton. The salaries earned by workers on the construction sites and on the new assembly lines will be spent on food, goods, houses, entertainment and schooling in the metro. This additional expenditure will create new jobs in these sectors. “New factories attract and accelerate further investment and development. They create investment and jobs. This, in turn, drives up economic growth and domestic incomes, which also leads to property values increasing,” says Dr Bruton. Higher property prices help create more jobs because entrepreneurs can borrow more money from the banks to finance their businesses. Home-owners can also take out second bonds to make improvements to their houses. “When property values increase, the credit worthiness of the population goes up, which means that they can spend and consume more. Greater spending power attracts more suppliers in the retail and leisure sectors, which in turn creates more jobs. “More business opportunities results in a greater flow of people to the region, which leads to the airways adding flights and creating additional inbound capacity, hoteliers building more rooms and the opening of more restaurants,” he says. “We can see this when we host investor groups that have come down to see the Coega project. Hotels are definitely fuller than they were just a year ago,” says Mr Hartle. The region has so much to offer that people who come down here on business often return with their families for a holiday, adds Dr Bruton. “Experience has shown that business travel to the Nelson Mandela Bay area often results in the business person coming back with his or her family on holiday. It is only when they come down here that they realise just how much we have to offer.” One of the big growth areas is and will continue to be tourism, believes Dr Bruton. “Many of the investors who set up in the Coega Industrial Development Zone will be foreign, or will use imported technology. That means there will be a flow of engineers, managers and consultants from around the world. They, like the domestic business visitor, will want to come back with their families on holiday.” Major developments like the Greater Addo Elephant National Park, the Baviaans Mega Reserve, Madiba Bay, the Statue of Freedom and the leisure potential of the existing harbour after Coega is operational will all add to the growth in tourism, which Dr Bruton says continues a trend initiated by The Boardwalk Casino and Entertainment World. “The Boardwalk was the first world-class tourism investment in the metro. It provided us with a venue to which we can take international investors like the people interested in Coega. “It also sparked the rejuvenation of our beach-front. You can see what is happening. Whereas it was difficult to find a place to eat overlooking our bay, more and more quality restaurants are now opening along the beach front. “Coega is now adding to that momentum by attracting much-needed foreign investment. Economic development, in its simplest terms, depends on value-creating risk capital. That money either comes from domestic savings or from foreign investment. “South Africa’s domestic savings are, unfortunately, not sufficient to promote required levels of economic growth. That means the country can only grow if it attracts foreign investment. “Coega has all the qualities to do just that,” he says.