A metro cannot tax its way to prosperity

POLITICS

For too long, Buffalo City has balanced its books the easy way: raising rates, increasing levies and asking residents and businesses already stretched thin to carry the cost of a metro that has not done enough to grow its own revenue base. It is the fiscal equivalent of drawing water from a well without ever refilling it.

Eventually, the well runs dry, and everyone standing around it feels the consequences at once. What should concern every business leader watching this metro is that the response so far has simply been to dig the well deeper rather than find a second source of water.

I make this argument not only as a candidate but also as someone trained in economics, and that training shapes how I read this metro’s balance sheet. A municipality that funds itself almost entirely through rates and levies is not practising fiscal discipline. It is substituting the hard, patient work of growing an economy with the much easier exercise of billing the same shrinking base more ag-gressively each year.

This is not a small metro without assets to build on. Buffalo City has the second-largest economy in the Eastern Cape, worth close to R84-billion and accounting for nearly a fifth of the provincial economy. We have a deep-water port, King Phalo Airport, an industrial develop-ment zone and a manufacturing base anchored by Mercedes-Benz South Africa and roughly 120 other large enterprises. Alongside these are agriculture, aquaculture and agro-processing with real export potential, as well as emerging sectors in renewable energy, the ocean economy and the creative industries that barely feature in the metro’s economic planning.

A city with this foundation should not func-tion like one with no options beyond raising bills for residents already struggling. A broad unemployment rate exceeding 35% is not a stat-istic to manage. It is a signal to the private sector that the gap between this metro’s eco-nomic potential and its economic performance has become too wide to ignore.

Part of the problem is one that researchers studying this metro’s development strategy have highlighted for years: an approach too focused on large-scale, pro-growth industry while leaving the pro-poor economy, township enterprises, informal trade and small busi-nesses without comparable investment.

Growth in the automotive sector has not translated into visible change in Mdantsane, Duncan Village or Zwelitsha. A strategy that speaks only to large investors while leaving informal traders without secure trading spaces, sanitation or access to finance is not a strategy for this metro’s actual economy. Business leaders who have tried to build supply chains connecting large industries to smaller local operators know exactly how much untapped capacity is sitting idle as a result.

Revitalising this economy starts with fixing what currently throttles it, because municipal dysfunction does not simply inconvenience businesses; it destroys jobs outright. When water supplies are unreliable, power cuts are constant, sewage backs up and roads deteri-orate, companies do not simply complain – they close.

Clover shut a major facility in Lichtenburg after years of municipal service failures, taking 330 jobs with it. This is a warning that any metro relying so heavily on failing infrastructure should heed.

Every business forced to run private gener-ators, truck in water or pay for private security because the municipality cannot deliver basic services is a business with less money available to employ people, less capacity to expand and less reason to choose this metro over a compet-itor next time.

Small and medium-sized enterprises here consistently cite unreliable electricity and tele-communications as direct obstacles to daily operations, while growth plans remain con-strained by backlogs in bulk water infrastructure that should have been resolved years ago.

No incentive package, however generous, can compensate for a metro that cannot keep the lights on or the water running. Infrastructure reliability is the precondition for every other business decision, not simply one consideration among many.

Part of that work means looking honestly at the industrial infrastructure this metro already has and is wasting. Dimbaza, Ntabozuko and Fort Jackson were built decades ago as decent-ralised manufacturing hubs, part of an earlier era’s industrial policy that left behind real phys-ical capacity which this metro has since allowed to decay.

While Ntabozuko and Fort Jackson still have usable structures, Dimbaza in particular has become synonymous with abandoned and van-dalised factory sheds sitting idle while this metro searches elsewhere for investment.

Other structurally weaker regions internation-ally have learned that attracting investment into underused industrial areas means making those areas genuinely more competitive through targeted rates relief, faster approvals and subsidised connections to electricity, wa-ter and digital infrastructure.

I believe Buffalo City, working with provin-cial and national government, should pursue that kind of differentiated approach across Dimbaza, Ntabozuko and Fort Jackson: incent-ives tied to real, verified job creation and genuine occupancy, rather than incentives granted once and forgotten while buildings con-tinue to deteriorate.

Repurposing existing industrial buildings is cheaper and faster than greenfield develop-ment, and it places jobs directly in the communities that have waited longest for them.

None of this works without municipal insti-tutions that understand their responsibilities. Studies of this metro’s own local economic development unit have found practitioners genuinely uncertain about their roles, alongside a persistent lack of basic data needed to track how local businesses perform or where jobs are being created.

You cannot manage what you do not measure, and no serious investor commits capital to a metro that cannot say with confid-ence how its own economy is performing.

Addressing this starts with treating economic intelligence as core infrastructure, publishing regular, credible data on business formation, closures and employment by sector, and recog-nising that local economic development is not the municipality’s responsibility alone.

Established businesses, industry bodies and community organisations need a genuine seat at the planning table from the outset, not a con-sultation exercise once decisions have already been made elsewhere.

Apartheid-era spatial planning, which pushed workers into distant townships such as Mdantsane, still shapes this metro’s economy today. Its legacy is evident in the long, costly commutes that quietly tax every worker’s time and income before their first shift even begins, and in the way industrial and commercial investment continues to cluster far from where most residents live.

Reversing that will take more than one term, but it starts with treating spatial injustice as an economic issue rather than only a historical one. Commuting costs and accessibility must be factored into decisions about where new investment, transport links and enterprise support are directed.

None of this happens through a single announcement or investment summit, and I will not insult this metro’s business community by pretending otherwise.

What I commit to is a metro that treats small and informal traders as a serious part of the economy; that addresses the electricity, water and red tape problems investors already know about; that introduces real, verifiable incentives to repurpose idle industrial infrastructure across Dimbaza, Ntabozuko and Fort Jackson; that builds institutional capacity to track its own progress; and that stops relying on ever-higher rates and levies as a substitute for genuine growth.

Support programmes for small businesses already exist here on paper, in strategy docu-ments that read well but change little. What has been missing is follow-through and the political will to close the gap between what those documents promise and what residents and business owners actually experience.

Buffalo City has the assets to become one of this province’s genuine economic engines, and the business leaders who have chosen to stay and invest here despite the obstacles deserve a metro that finally matches their commitment with its own.

That is the standard I intend to be held to, and the metro I will work hard to ensure Buffalo City becomes.

POLITICS