DIPA, Durban South Africa AfrIPANet Conference Presentationby Russell Curtis, Acting CEO, DIPA October, 2008.

DIPA, DurbanSouth Africa

AfrIPANet ConferenceAfrIPANet Conference

Presentation Presentation

bybyRussell Curtis,Russell Curtis,

Acting CEO, DIPAActing CEO, DIPA

October, 2008

Investment Promotion in Durban?

• Durban as SA’s 2nd largest City was not retaining Business well enough; not expanding fast enough; little FDI, etc…

• City Leadership & Business Leadership - Public Private Partnership in 1999

• Best Practice City Commission formed (BPCC), researched & made recommendations to City Council - 2000

• IPA was recommendation #1 & DIPA formed

• Fully funded by City Council, but lots of Business time invested

“Public-private partnership (PPP) mechanisms have become the clear choice for governments worldwide to improve clear choice for governments worldwide to improve service delivery, attract investment, reduce costs, and service delivery, attract investment, reduce costs, and increase accountabilityincrease accountability. Although tremendous progress has been made in the last ten years in designing and implementing PPP programs and transactions, most countries have only just "scratched the surface" of their enormous potential as an economic and governance tool.

The knowledge of the "why and how" to effectively use PPP strategies and techniques is a valuable resource, one that is slowly taking hold amongst all stakeholder groups including government, the private sector, and the public-at-large.”

The Institute for Public-Private Partnerships, Washington DCwww.ip3.org

Partnership!

Einstein’s Definition of Insanity

Continuing to do the same thing over and

over again and expecting a different

result!!

BPCC Overview• MESSAGE FROM THE COMMISSION:

“…recommendations are a ‘package of proposals’ that should be implemented holistically in terms of a concerted, co-ordinated, & comprehensive program. They should not be approached in a fragmented manner.”

• COMMISSION FINDINGS: • “Promotion and Marketing to Investors (Improvement needed?)

• “Specific Investment Information (Lacking?)

• “Decision-Making Procedures & Policies (Improvement needed?)

• “Professionalism and Courtesy” (Attention desired?)

• COMMISSION RECOMMENDATIONS (LIST):1. Investment Promotion Agency

2. Corporate Plan

3. Development Facilitation Centre

4. Policy and Legal Framework

5. Local Economic Development Zones

6. Attitudinal Changes

Projects

Vision

LTDF

Strategic focus areas

programmes

IDP - 8 Point Plan

Fit within City’s Strategic Alignment

““Investment Facilitation & PromotionInvestment Facilitation & Promotion

“INVESTMENT PROMOTION AGENCY”

Need to push for an IPA?

• UN’s work (inter alia) on the MDG’s has recently prioritised the Millenium Cities Initiative (MCI) to help Municipal investment achievement. DIPA has been invited by UN to help in Africa this year

• SA President’s State of the Nation address lists the “Apex Priorities” with Eco-Dev & “Business Unusual” as top of the Agenda

• Ruling ANC Party in SA & it’s current President has prioritised investment & economic development as best way to alleviate poverty

• Finance Minister & Nat’l Treasury has just released Commission Report saying accelerated growth (via pvt sector investment) is the best lever for SA’s future now

• DTI has reinvigorated Trade & Investment SA, appointed the CEO & reviewed some incentives

• IDC Board (with GTZ) is recommending & funding new investment Agencies in Municipalities across SA. CT has one & Jhb is busy setting it’s up

• Provincial Spatial Economic Dev. Strategy (KZN DED) has 4 Pillars which must be included in City IDP. Pillar 1 is “Accelerate Investment”

• City’s own Backlogs Strategy: Only 2 new funding sources

• Harvard Study highlights that the SA Current Account deficit at present levels requires us to accelerate inward investment. An IPA at this time is most NB

• On a Cost-Benefit basis, or ROI, an IPA is a massive direct profit centre which should be expanded

•BPCC Recommendations est’d. eff. 2002

•Established under Sec. 21 of Co’s Act (NPO), & full Council Resolution, but,

•Effective 2005: Leadership decision change & MFMA resulted in Co. dereg. & full absorption by eThekwini Municipality

•IPA Mandate (BPCC & now) - “First Stop Shop” for:

•Proactive promotion and marketing•Investor information•Gather relevant information•Referral of investor enquiries•Provide first level advice•An information management system•Provide Councils with strategic advice•Needs of existing investors•‘Deal-making’ function

DIPA: When & What?

……Durban Chamber of Durban Chamber of Commerce Board Resolution Commerce Board Resolution for BPCC Reviewfor BPCC Review

What is DIPA?• DIPA is a FREE advisory, facilitation &

promotion service of the City of Durban. • Its objective is to retain & grow jobs, +

new City revenue streams via promotion of investments into Durban, whilst growing existing investment base.

• It is a unit of the eThekwini Municipality• First City run IPA in the Country• Internationally recognised and

benchmarked• Formed out of BPCC

DIPA - How do we operate?• Promote the City - B2B, G2B & G2G• Facilitate Medium - Larger Projects

– Agribusiness; Mnf’g; ICT&E; Tourism/Prop; Maritime & Logisitics

• Retain / Expand existing investors (BR&E)

• Facilitate Medium - Larger Events– WIB; CBC Africa Investment Forum;

Celebrate Dbn; Sector B/fasts & W/shops

• Grow / Support new PPP’s & Linkages (e.g. KZNoS, DFO, Agribiz Forum, BSU etc.)

• Investment promotion & marketing

• Existing business retention and expansion(*)

• Foreign investor support

• Undercapitalised investment development

• Investment environment & policy review/improvement

• Land use controls & business development in townships

• Agribusiness Forum

• 2010 Economic Development Opportunities

DIPA: Main Activities

= Marketing & Comm’s; Business Consultancy; Project Management plus 2 new operational areas…

Who do we work with?(Fully funded by City – R10m*)

• City Units & Agencies (EDU, BSU, TD, DP&M, TPD, SX, KZNoS, DFO, ICC, SPU, etc)

• United Nations ; World Bank ; WAIPA• International Trade Centre & WTPF• Local & Foreign Media (Editorial &

Ad’s)• Commonwealth Business Council; CII

India• Our Nat’l Dept. of Trade & Industry,

NEPAD• Provincial TIKZN, & KZN Dept. of Eco.

Dev.• Organised Business (DCC , DAC,

Growth Coalition, Minara Chamber, BUSA, etc)

Cautions for IPA?• Frustration can occur due to a lack of skilled

human resources committed to IPA

• There can often be a lack of understanding of, or support for the Best Practice recommendations w.r.t. Investment Promotion prioritisation

• Operating within a highly politicised & bureaucratised environment is challenging

• No easy access to private sector project funding if there is Municipal structural internalisation

• Counter-productive interdepartmental dynamics

• Higher growth rates can strain some of the infrastructure (port, roads, elec., water)

• Insufficient platformed, serviced land

• Crime & the international perceptions

• Ad hoc excl. of the City by some in the Capital

DIPA: Key Achievements• Investment promotion of Durban: >150

Journals, Trade/Investment Publications, Business Newspapers, Sector Periodicals, + TV

• Led/participated in approx 50 Business Missions focusing on investment & jobs

• Led/participated in approx. 20 conferences & exhibitions locally & abroad promoting Durban

• Facilitated R10Bn+ worth of new fixed capital business investment (=Millions City revenue)

• Created/retained in excess of 10 000 jobs• Attracted participation in Durban of the

UN, World Bank, WAIPA, CBC - AIF, G8 Partners; plus key IBSA & East Asian counterparts

• PMR Diamond Arrow, Gold & Bronze Awards

• One of only IPA’s into the UN IAC, via UNCTAD

• Clean Audit Reports & always within budget

• Established & grew KZNonSource; Dbn Film Office; AgriBusiness Forum

THE GOLDEN RULE

Business stays and expands where it is well treated and appreciated

Broad LED StrategiesBroad LED Strategies

• Creating jobs through investment in infrastructure, services, land reform

• Retaining and growing existing business• Establishing new local business• Attracting investment and resources• Plugging the economic leaks• Investing in “soft infrastructure”• Marketing, attracting visitors

Form Task Team; appoint local Co-ordinator

Assess interest, obtain commitment

Agree scope of programme

Launch and promote local programme

Identify businesses to be visited

Recruit & train volunteers

Business visitation - conduct surveys

Prepare action plans

Analyse survey data,

Review other info sources

Review progress & impact

Feedback to stakeholders

Implement plans

Immediate follow up

Business Retention & Expansion (BR&E) Program

OutcomesOutcomes

• Growth of existing businesses creates as much as 60-80% of all new jobs

• They provide most of the investment for new local economic initiatives

• They generate ideas for new businesses• They play a vital part in encouraging

outside businesses to relocate or establish within their community.

“ALL HITS”

Super 7 of Durban

CBC’s Views:• “Today we (CBC) also address the following four

challenges, working in partnership with Commonwealth governments and the private sector.

• Changing perceptions – Globalisation - Technology & Skills – The Commonwealth Factor

• “Many Commonwealth countries offer good investment opportunities but suffer from popular misconceptions, uneven media coverage and failure to promote their economic strengths to important external audiences.”

Why ‘Super 7’?

Acronym:“ALL HITS”

• An easily understandable, mental tool to help us all highlight and expand upon why this is becoming Durban’s best decade of delivery and growth.

• Enlightening to our foreign business partners & Government Leaders.

• Will help to secure the economic & business benefits of Durban for All.

Award Winning Municipality

Lifestyle of Business & Pleasure

Largest Human Resource Pool

Highest Growth Rates

Infrastructure Leader

Tourism Crown

Substantial Business Base

Durban, KZN in a global context

“ALL HITS”

Why Localised IPA?• Highest vested interest in success• Business principles of FOCUS• Good opportunity for sustainable local

business partnerships & alignment• Compliments, reinforces & scales up

National efforts• Huge opportunity to generate

substantial, additional local revenue for City/Region (ROI)

• Gives the region/city a better competitive edge over others

“If you think you are too small to be effective, you have never been in bed

with a mosquito”

-Anita Roddick

Founder,

The Body Shop

Thank you for your attention & support

You are always You are always welcome inwelcome in

Durban, KZN Durban, KZN South Africa!South Africa!