Cape Town might be moving into the epicentre of a perfect storm of positive economic news, says Mike Wills.
Cape Town - I am not an economist, nor even the second cousin of anything resembling one. I haven’t got a clue what I am talking about. No change there, regular readers might observe, but in this instance I’m dispensing financial prognostications and must warn gullible Capetonians not to stake their life savings on them.
So with those provisos out of the way, let’s plough on.
I reckon the good times are about to roll again. The booming sound in the city is not just the noon day gun going off. Cape Town might just be moving into the epicentre of a perfect storm of positive economic news.
Let me make it clear that this will not be a linear process. Things only will get better in fits and starts – a couple of steps forward and then a few sideways or backwards.
It will also not be an all-encompassing process. This is not, in the classic economic cliché, a rising tide which lifts every boat. Rather it’s the start of an upward trend from which some will benefit more than others and some not at all.
And it won’t be one big moment. When things go bust it is usually spectacular and instantly recognisable but when things begin to prosper again it’s harder to spot.
We have been in the mire since the 2008 Global Financial Crisis (which was so big that it got itself capital letters like the Great Depression) but there are enough signs around to suggest a recovery in the major world economies.
I won’t bore you with all the indicators but World Bank forecasts have turned positive for the first time in yonks, nobody mentions a Greek exit from the euro anymore, even the Japanese are starting to get some growth for the first time in decades, and the Irish economy, one of the biggest casualties of the crash, is now back to almost rude good health.
I fancy that the global travelling class will soon be bullish and flying again.
And where will they go? To Cape Town, of course. Top of the New York Times list of places to go this year, World Design Capital and home to the newly minted Natural Wonder of the World, all for an absolute steal at R10 to the dollar and R17 to the pound.
The weak rand is our double-whammy secret weapon. It makes everything here seem astonishingly cheap to tourists and it keeps our own elite holidaying, and spending, in South Africa because “abroad”, as my mother used to call it, is now so damned expensive.
It will also make the CTICC more competitive for conferences and the city attractive for significant revenue generators like school sports’ tours.
Estate agents know R30 million shacks in Clifton suddenly seem like bargains for Germans.
Already the signs are promising. The recent holiday season was a good one with the airport and every major attraction, bar one, showing year-on-year growth – including the Cableway breaking its all-time monthly record in December and V&A Waterfront income up nearly 20 percent. The predictable laggard was the poorly run Robben Island.
Also keep an eye on all the new global retail brands opening in town – Zara, Topshop, Cotton On & Witchery among them – they sense an opportunity.
Sadly, this narrow-based boom, which you heard about here first, will not “trickle down” to everyone.
We still desperately need better management of our national economy in so many ways to deliver that broader upliftment, but a sharp growth in Cape tourism spend would certainly be something good to be going on with.