The first steps in a historic process to establish SA's Ocean Economy
The historic beginning of a long process to measure South Africa’s Ocean Economy was embarked upon at a symposium in Cape Town led by the South African International Maritime Institue (SAIMI) on Monday. “We are trying to establish the science behind the decisions that need to be made. When dealing with the use of the ocean, it is for all people, not just for some.” were the words echoing from SAIMI CEO Mr Odwa Mtati at the close of the session.
“SAIMI continues to believe in the vision that the Ocean Economy has the potential to contribute up to R177-billion to the country’s GDP by 2033 and create over 1 million jobs,” Mtati stated. The “Measuring the Ocean Economy” conference was an opportunity for SAIMI to engage with major stakeholders in order to collaborate in research to focus growing the Ocean Economy exponentially.
“Today’s seminar is a significant step in achieving SAIMI’s goal of collaboratively determining the best manner in which to establish what exactly the Ocean Economy contributes to the South African economy,” Mtati clarified. In order to achieve this goal SAIMI reached out to Statistics South Africa in order to learn from them.
Riaan Grobler, director responsible for Environmental-Economic Accounts within the National Accounts Chief Directorate at Statistics South Africa, explained using the example of the Tourism Satellite Account and the Biodiversity Economy Satellite Account, the advantages of using thematic satellite accounts to better understand the economic impact these industries have on the GDP.
Grobler explained that to understand the impact of the Ocean Economy on the GDP the direct contribution of the industry to the national economy must be ascertained. In order to ascertain the direct contribution, via supply and use tables (SUTs), a clear definition of what makes up the Ocean Economy must be established. Ultimately it comes down to stakeholder and user consultation to establish the boundaries of the scope of the Ocean Economy.
“This is the challenge; how do we define the Ocean Economy? What are the critical areas? These are the aspects we need to look at as we right-size,” Mtati asked the stakeholders from SAMSA, DHET, DFFE, CoCT, NUM, and UCT, who among others, were involved in the discussions. This is a challenge SAIMI are happy to undertake as South Africa is striving to harness the opportunities for growing the Ocean Economy having over 3000km of coastline and a maritime territory (an exclusive economic zone) which is greater than its land mass.
When deliberating on what constitutes a direct contribution to the GDP, Professor Stephen Hosking put forward the thought that as an activity depends upon a thing, that thing is a direct influence. “If the activity depends on the ocean, then without the ocean that activity would not happen,” Hosking went on to explain. Hosking believes that when calculating the Gross Value Added (GVA) of the Ocean Economy to the GDP, not only the primary national resource inputs, such as Marine Fishing or extraction of crude petroleum, but the secondary and tertiary sectors need to be calculated too.
Secondary sectors would include industrial classification such as electric power generation, and sea cooling and cleaning services, while tertiary would include the ocean as a space for transport and communication and even quality of life activities. It is with this understanding and definition of what makes up the Ocean Economy that one can note that the GVA of the Ocean Economy is much higher than previously thought.
“Measuring the Ocean Economy with an actual value-added approach takes more work, but is more accurate,” Hosking reiterated.
Professor Hosking further explained that the ocean is one of humanity’s precious treasures and vital to billions of people’s livelihoods and survival. The oceans provide a wealth of economic and social benefits to the everyday lives of South Africans and South Africa is invested in understanding its ocean space and its full potential.
With the launch of Operation Phakisa in 2014, a South African government initiative, SAIMI has been coordinating work of seven Operation Phakisa Skills Initiative Working Groups in the Oceans Economy Lab. By February 2019, through Operation Phakisa initiatives, government had unlocked investments of almost R30-billion and more than 7000 new jobs in the oceans economy. With the potential of a contribution of R177 billion to the GDP and a further 1 million jobs by 2033, SAIMI is driving the enhancement of South Africa’s capacity across maritime skills development, education, innovation, and research needed to support the oceans economic growth.
“This is the beginning of the process and not the end,” Mtati reminded the delegates after a brief discussion. “Measuring the Ocean Economy plays a vital part in the advocacy for the sector…we need to make sure that there is a continued interest in this sector, and by measuring the economy we have the statistics to show how important it is.
