Durban - More than 70% of businesses operating in Durban have revealed that eThekwini Municipality’s response to service-delivery issues was slow, saying this was affecting the business sector’s confidence in the City’s ability to deal effectively with such challenges.
The Durban Business Confidence Index report also revealed that most businesses surveyed in the municipality found that poor services were provided in respect of electricity, water and water-related issues.
The report is a collaboration between the University of KwaZulu-Natal (UKZN), the eThekwini Municipality and the Durban Chamber of Commerce and Industry. It is aimed at finding solutions to the challenges that impact on investor confidence and the willingness to expand businesses in the municipality.
Professor Harold Ngalawa, professor of Economics at UKZN, presented the results on Friday, saying that industries such as manufacturing, electricity, gas and water, wholesale and retail, transport and insurance participated in the survey that reflected the business mood in the municipality in the fourth quarter of 2022.
On the index, figures of 50 and above indicated positive sentiment while 50 and below indicated low investor confidence.
Ngalawa said that eThekwini business leaders expressed a lack of confidence in their business environment in the last quarter of last year.
“The survey revealed that 78% of respondents indicated that when they had service-delivery issues, it was unlikely to be attended to by the municipality and this is a problem.”
Ngalawa said this partly explained the low confidence that “businesspersons have in eThekwini”.
“The survey respondents also reported among the services provided by the government in eThekwini, electricity is the worst followed by environmental management (sewerage, solid waste and parks), roads and public safety (police, fire and ambulance services) in that order.”
The survey’s findings were meant to give direction to the municipality and respondents indicated what areas authorities should attend to, he said.
“Business owners need to know if eThekwini is improving or regressing. The index looks at short-term trends and helps to project business confidence and expectations for the next quarter.”
Ngalawa said the wholesale and retail sector had improved in its economic outlook last year. “Following a significant decline in wholesale and retail trade during the Covid-19 period, the sector has rebounded significantly, with its index jumping from 22.61 in the third quarter of 2022 to 58.72 in the fourth quarter.
“A large part of this improvement in performance can be attributed to the festive season, which usually leads to an upward surge in trading activities.
“Notwithstanding this improvement, the persistence of the eThekwini energy and water challenges may reverse the improvements in the other sectors.”
Ngalawa said confidence in the transport, storage and communication sector had improved from 32.57 in the third quarter of 2022 to 51.44 in the fourth quarter.
“This sector has proved to be a key and most resilient sector in the province, particularly in eThekwini. Durban‘s port – the largest and busiest harbour in sub-saharan Africa – accounts for a significant proportion of activities in this sector,” said Ngalawa.
EThekwini saw its economy grow from 1.1% in the second quarter of 2022 to 1.6% in the third quarter.
“Despite the improvement in economic performance, the persistent load shedding across the country continues to be a major setback to the struggling economy, as businesses desperately try to operate with intermittent power.
“Load shedding makes businesses lose production, damages equipment, decreases productivity and increases theft and burglary, leading to sluggish economic growth,” said Ngalawa.
The province’s economy, which relied on tourism, may have also suffered a recovery setback following reports of leaking sewerage pipes polluting rivers and many parts of the beaches, he said.
Dr Nuthan Maharaj, a programme manager for the municipality’s Economic Development Unit, said the City was engaging in these types of research to improve the basket of mechanisms that it hoped would support investment.
“The Economic Development and Growth platform offers soft support to business and financial incentives particularly to property developers for industrial, commercial or mix use who could qualify for a 100% rates rebate.
“Those expanding their business property or building a new property on vacant land can apply for this rebate.”
Maharaj said the municipality undertook various research programmes that guided the programme roll-out for the year ahead. “This determines how we allocate budgets and where we invest resources. That is our commitment to business and the public,” she said.