CITY OF JOHANNESBURG METRO MUNICIPALITY

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The City of Johannesburg is the economic capital of South Africa

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CITY OF JOHANNESBURG

FINANCE ECONOMIC CAPITAL the late nelson mandela described Johannesburg as the city of “vibrancy and activity, the centre of our country’s prosperity, providing that opportunity to create a better life for all” Writer Emily Jarvis Project Manager Stuart Shirra

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Image source: Enoch Lehung Š

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CITY OF JOHANNESBURG

he City of Johannesburg is the economic capital of south africa and a heartland of trade and economic activity in africa. It is home to the headquarters of most local and multinational companies in banking, finance and industry because of its nationally acclaimed economic and social infrastructure. It also houses the Johannesburg securities and Bond Exchange, the largest stock exchange on the continent. with a population of over 4 million people, Johannesburg is a bustling metropolis which offers locals and visitors an experience as unique and diverse as the city itself. as the biggest of south africa’s eight metropolitan municipalities, it is the destination of choice for both skilled and unskilled migrant workers from beyond the provincial borders of gauteng and national frontiers, and is a gateway to other destinations in southern africa.

Johannesburg is an inland city located in the province of gauteng, the wealthiest of south africa’s nine provinces which occupies only 1.4% of south africa’s land area, but contributes more than 33% to the national economy and a phenomenal 10% to the gDP of the entire african continent.

It is a city which is rolling out innovative solutions in the fields of alternative energy, public transport and high-speed broadband; a caring city that looks after its people through its housing initiatives, its successful healthcare programmes, its human and social development interventions, its expanded social package for indigent communities and the vulnerable and its urban agriculture programmes to ensure food security and a society where no one should go to bed hungry.

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Urbanisation and the African City

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rbanisation is a reality that has and continues to be a key factor for the growth and development of cities globally. For the African City, this trend is transformative as the African continent experiences some of the highest urbanisation rates in the world. The SubSaharan Africa urban growth rate is, for example, 3.6 percent per annum - double the world average.

In practical terms, by 2050 we will require additional city infrastructure in Sub-Saharan Africa equivalent to more than 1000 cities the size of Oslo, Norway.

Critically, high rates of urbanisation shape both policy and developmental trajectories for developing cities and the countries within which they find themselves.

Cities are the most important sphere of government as they are the closest to the people

The high rates of urbanisation bring both benefits and challenges. Some of the benefits of rapid urbanisation are fast growing consumer markets, high economic and GDP growth rates and accelerated technological innovation. Rapid urbanisation also results in a variety of employment opportunities with the potential for increased wages for individuals, whilst business and industry benefit from cost savings due to agglomeration economies and economies of scale.

Society at large also benefits from improvements in the form of improved health; decreases in poverty; improved living conditions; higher disposable incomes; and improved levels and standards of education.

Rapid urbanisation also brings, however, significant challenges to African cities in that it places a strain on the capacity of local and national government to provide the most basic of services to the city’s population. Within our developing economies, urban poverty is persistent accompanied by the unwieldy growth of shanty towns or slums - 200 million Africans live in slums, making up 70 percent of urban

Cities pictured included: Nairobi, Dar es Salaam, Nairobi, Johannesburg, Addis Ababa, Cairo

inhabitants. Often an excess supply of unskilled labour leads to increased levels of unemployment and underemployment. The negative connotations of increased pressure on existing services, employment opportunities and infrastructure represent major strains on available resources and service delivery.

The strain on resource is largely facilitated by real increases in costs for transportation, real estate and infrastructure costs alike.

Infrastructure leads cities’ economic and social development The infrastructure gap is one of the major problems facing the African city and the continent as a whole.

The African Union has identified infrastructure as a key priority in their 2009-2012 Strategic Plan that seeks to promote integration, socioeconomic development and cooperation on the continent.

At this continental and inter-regional level, the

swelling demand for infrastructure is acknowledged as one of the continents greatest impediments to sustainable development.

Further, there is a clear acknowledgement that the solution for infrastructure development to match apparent needs in Africa will require creativity and collaboration. The Programme for Infrastructure Development in Africa (PIDA) drives for regional integration of the continent and specifically calls for new models of partnership between business, government and donors to implement the 51 Priority Action Plan (PAP) infrastructure projects already identified.

Prioritisation of infrastructure development is of critical importance in light of funding constraints

Urbanisation and the African City At the level of the African city, the need to think and address the matter in a broader context centred on collaboration, cohesiveness and co-operation cannot be overstated. Whereas the AU’s NEPAD, PIDA and such interventions provide a broad framework for coherent infrastructure development, it may be argued that cities at country and sub-national level are the building blocks that will add substance to the strategic commitments that have been made.

The need for re-imagining the urban space in cities is imperative for African to take advantage of its emerging role as a destination of choice for many investors and development actors looking for high growth markets.

KPMG has extensive experience of providing professional services to cities, and understand African cities, their challenges and their future.

This collective information is channelled to our clients by way of a globally-connected Africawide Centre of Excellence for Cities, with a focus as set out in our service offering model, comprising of subject matter experts and highly experienced professionals.

We have delivered a number of flagship assurance and advisory projects, including urban and economic development, optimisation of city balance sheets, financial turnaround plans, revenue assurance and enhancement, capital projects planning, prioritisation, monitoring and financing, as well as international city benchmarking.

Value-added advice is when ones combines deep sector knowledge with subject matter expertise

Delivery

Financing Growth

Governance, risk and Organization

High Performing Local Economies

Revenue Enhancement

City, Vision and Strategy

Understanding growth and prioritisation

service offering model

For more information please contact:

Kobus Fourie kobus.fourie@kpmg.co.za

Anthony Thunstrom anthony.thunstrom@kpmg.co.za

Andile Skosana andile.skosana@kpmg.co.za

CITY OF JOHANNESBURG

It is the home of global icons such as the late nelson mandela who described Johannesburg as the city of “…. vibrancy and activity, the centre of our country’s prosperity, providing that opportunity to create a better life for all”.

Executive Mayor Tau and Michael Bloomberg, former Mayor of New York

The Man Behind the World Class African City Johannesburg is remaking itself and shaping its future as a sustainable liveable and resilient city – a city that ‘cares’ for its people and their future. the man behind this vision and its implementation is Councillor mpho, Parks tau, Executive mayor of the City of Johannesburg.

He brings a unique blend of youth and experience to his role as Executive mayor of Johannesburg, south africa’s premier economic city.

Mayor Tau is a proficient international speaker and provides a voice of transformation in international seminars and conferences. He has represented the City of Johannesburg as a speaker, facilitator and presenter at a number of global events such as the world Economic Forum in Davos, un Habitat world urban Forum, the metropolis annual meetings, the uClg world Congress, africities and Economist conferences to name a few.

His main areas of focus are issues of socio-economic development, urban transformation, climate change, energy and youth matters and he has been able to generate global debate and garner support for his views and perspectives. mayor tau is a member of the uClg world Council and Executive Bureau and is Vice-Chair of the un Habitat’s global network for safer Cities. through his international role, he has been able to attract a number of key events to Johannesburg including the metropolis annual meeting in 2013, the C40 mayors summit in 2014 and the forthcoming africities summit in 2015.

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The city of vibrancy and activity, the centre of our country’s prosperity, providing that opportunity to create a better life for all”

Mayor Tau opening C40 Summit in Johannesburg

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CITY OF JOHANNESBURG

Green Bond

Leading the African Continent on Capital Investment

Johannesburg’s capital investments have increased significantly from R7.6 billion in 2013/14 to R10.9 billion in the 2014/15 financial year, making it the largest in the continent. the city has also successfully redeemed R1.9 billion since the inauguration of the municipal bond which the city pioneered – including R900 million in the past 12 months.

Johannesburg also received an unqualified audit report for the 2012/13 financial year, which attests to the city’s good governance systems and adherence to the highest standards of corporate governance and financial controls. the city deploys these resources to achieve its developmental obligations through investment in strategic infrastructure such as roads, the rehabilitation of public spaces and innovative transport solutions and telecommunications.

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The First C40 City to Issue a Green Bond

Johannesburg is remaking itself and shaping its future as a sustainable liveable and resilient city – a city that ‘cares’ for its people and their future”

the City of Johannesburg has successfully listed the first green bond CoJgo1 which will mature in 2024.

The bond of R1.46 billion was priced at 185 basis points (1.85%) above the R2023 government Bond, which is very competitive and is a reflection of the city’s improved financial position. It marks a historic occasion as Johannesburg became the first city in the C40 Cities Climate leadership group to issue a green Bond. “the bond auction was 150% oversubscribed, demonstrating investor confidence in Johannesburg and commitment to environmental stewardship and climate change, while receiving a market related financial return,” says Executive mayor mpho Parks tau. the green Bond has provided the city with a funding source to improve and expedite the implementation of its climate

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CITY OF JOHANNESBURG

Green Fuel Metro Bus

change mitigation strategy and move the city towards a low carbon infrastructure, minimal resource reliance and increased preservation of natural resources. the projects to be financed are green initiatives such as the Bio gas to Energy project and the solar geyser initiatives, as well as other projects that reduce greenhouse emissions and contribute to a resilient and sustainable city.

Leaders in Climate Change Mitigation Strategies Johannesburg is conducting a green revolution through a range of initiatives designed to reduce and mitigate climate change. as a member of the C40 Cities, the city is increasing its efforts to combat climate change, conserve its finite resources and guarantee security of supply of water and energy for its residents.

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the initiatives taken by the city to promote the “green revolution” Include:

As a member of the C40 Cities, the city is increasing its efforts to combat climate change, conserve its finite resources and guarantee security of supply of water and energy for its residents”

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Replacing its fleet with modern, low-floor and dual fuel (biogas and diesel) green buses which will advance the city’s clean fuel, job creation and low carbon economy agenda.

Reducing carbon emissions through the introduction of green transport such as the Bus transit system.

Rolling out 43,000 solar water heaters which generate the equivalent of 22.5 gigawatt hours of electricity per year – enough to run a small town.

Installing 42,000 smart meters, which is ongoing to enhance the city’s energy efficiency.

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opening a second Biogas-toEnergy (BtE) plant at wastewater treatment facilities at the Driefontein works to mitigate climate change and reduce energy costs.

Replacing 143 km of water pipes as part of a three year, 900km refurbishment programme. this will reduce technical water losses from leaks and pipe bursts.

In this future, ‘Joburgers’ will live closer to their workplace and be able to work, stay and play in the same space without having to travel long distances”

engineering based on exclusion and apartheid, to create a spatially integrated city and undo the process of urban sprawl, through the provision of high-density housing along well Instituting a programme to design planned transport corridors.

Dubbed Corridors of Freedom, the city’s “future energy mix”. the new vision will not only this will include the increased transform spatial development in utilisation of gas, the uptake of Johannesburg, but will also facilitate roof top photovoltaic systems the shift towards an affordable and and other alternative, greener accessible mass public transit system energy sources. that includes both bus and passenger Johannesburg Rolls Out Innovative rail. along these corridors the city Spatial Vision is locating mixed income housing, schools, offices, community facilities, the City of Johannesburg is working cultural centres, parks, public to reverse the legacy of social

squares, clinics, libraries, as well as cycling and walking. “this transit-oriented development will provide a modern approach to urban planning which has been implemented in cities such as san Francisco, Vancouver, melbourne, Paris and guatemala City,” says the Executive mayor for Johannesburg, Councillor mpho Parks tau.

In this future, ‘Joburgers’ will live closer to their workplace and be able to work, stay and play in the same space without having to travel long distances. the idea is to reduce the number of cars and lessen carbon emissions to save our environment.

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E n q u irie s Tel (UK): +44 (0) 1603 559 151 Tel (SA): +27 (0) 21 527 0053 ben.weaver@outlookpublishing.com

SU B S C R I P T I ONS Tel (UK): +44 (0) 1603 559 152 matthew.bone@outlookpublishing.com

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CITY OF JOHANNESBURG METRO MUNICIPALITY 158 Civic Boulevard Braamfontein Tel: 0860 562 874 Email: joburgconnect@joburg.org.za

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