Document: Investment Incentive Policy for the City of Johannesburg

 

The purpose of this policy document is  to provide a framework for the City of Johannesburg to enhance the city as an investment destination both for domestic and foreign investors as well as to retain and deepen commitments made by existing investors to the city. In support of this objective, this policy document offers a set of 27 Policy Positions and Recommendations for an investment incentive policy for the City of Johannesburg. These Policy Positions and Recommendations are grounded on the results of detailed research which was conducted in 2008,  inter alia, on the international record of sub-national governments using investment incentives; of factors influencing the investor location choice within countries; Johannesburg’s position within South Africa as an investment destination; lessons learned from other South African cities in considering or applying investment incentive policies; and (most importantly), the results of the detailed research as contained in a survey undertaken of 100 foreign investors in the city as well as focussed interviews with trade and business chambers in Johannesburg. 

 

The 27 Policy Positions and Recommendations are divided into 16 which are for immediate action and 11 which are for longer-term consideration and potential action. Among the key priorities for  immediate action are the imperative for institutional efforts to enhance the local business environment of the City of Johannesburg, by supporting and extending initiatives to address the key threats that confront Johannesburg as an investment destination and which were clearly enunciated by investors and business chambers,  viz., questions of safety and security; skills shortages; deficiencies in infrastructure, and, the escalating costs of doing business in the city. In recognition of the fact that an enhanced institutional environment in terms of information flow and channels represents an incentive for investors, a crucial recommendation for immediate action is that the Trade and Investment Directorate lead the development of a new partnership between the ‘city’ and its investor community. Before taking longer-term action or consideration for introducing ad hoc financial incentives, the City of Johannesburg must be assured that the essential foundations for investment in the city are firmly established The Policy Positions and Recommendations prepared for longer-term consideration and potential action are grounded upon the argument that the introduction of packages of financial incentives must be geared so as to supplement rather than substitute for 6 necessary initiatives to enhance the essential foundations of the local business environment.