South Africa: Business Fears Economic Stagnation


By Bradley Waltman

Durban Chamber of Commerce

The Durban Chamber of Commerce and Industry has expressed the concerns of the business community about bleak prospects for economic growth in the city. At the heart of the concerns is the rising cost of doing business.

From 1st July increases in electricity and other service tariffs, together with much higher rates assessments have hit businesses hard, and at a time when the economy is already showing signs of even more strain. “The justification for much higher rates bills – some companies are facing increases in excess of fifty percent – is difficult to find,” said Chamber CEO, Andrew Layman. “The increase in rate randage has been minimal and this means that new levels are attributable to supplementary valuations. The property market since 2008, when the valuation roll was last determined, has not shown the sort of market value increases reflected in the assessments for 2012/13, and business people are bewildered by new values which, they claim, are out of touch with market reality.”

The Chamber believes, that while foreign capital is important for economic growth, local investment is the most immediate way in which economic boosting and job creation can be effected. Yet, the climate for these essential circumstances is not conducive and, in fact, becoming increasingly inhospitable. Property developers, for example, reeled at the prospect of a series of development charges, the implementation of which has been delayed for this financial year. Also delayed, but accepted in principle by the City Council, are the so-called Transport Mobility Systems Charges. These are to be levied on new developments based on the volume of traffic expected to use the road network as a result of the development. “Developers have rated these charges as punitive,” said Layman, “and it is a common view within the sector that Durban is less hospitable to property development than its competitor cities.” A survey commissioned by SAPOA last year, showed this to be a justified perception.

The Chamber acknowledges the financial constraints facing the Municipality, and, indeed, the socio-political imperatives which determine how public money should be spent. Backlogs are extensive and redress a matter of urgency. However, the capacity of government to deliver a better life for all depends on the extent to which the local economy grows and the rates base expands. The CEO urges: “contain the costs to business, enable and encourage and Business will deliver.”

Chief Executive Officer


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