KZN Economic Development, Tourism and Environmental Affairs MEC Nomusa Dube told guests at a KZN Growth Coalition business breakfast in Durban yesterday that the department had received numerous queries from potential investors interested in the commercialisation of cannabis in the country.
“While we consult and await national government to pass all the necessary regulations around the private use of cannabis, we’re overwhelmed by the influx of inquiries from potential investors. Available statistics show the cannabis industry is worth more than R100billion,” she said.
According to a figure recently suggested by the UN, Dube-Ncube said, South Africa already produced 2300 tonnes of marijuana annually, making it the third-largest producer of the plant and related products in Africa.
“The African Cannabis Report of March 2019 estimates that by 2023 the total value of the South African cannabis industry will be around $1.8bn (R27bn). This is based on the assumption that government would move with speed with the regulation of the cannabis industry,” Dube-Ncube said.
She said economists predicted that the global cannabis market would be worth around $146bn by the end of 2025.
“South Africa is predicated to become a major player. As government, we don’t want this province to be left behind. We believe there are endless opportunities to use the cannabis industry to stimulate agriculture as a sector,” she said.
Dube-Ncube said the government was focused on outward-bound trade missions to attract direct foreign investment in its special economic zones.
“Foreign direct investment (FDI) will help create revenue streams for more investments in social infrastructure such as education and health, and to build transport networks that will become catalysts for socio-economic development,” she said.
“FDI is a source for economic development, income growth and employment- creation. More importantly, FDI helps create a more competitive business environment and enhances enterprise development. All of these contribute to higher economic growth,” she said.
Richards Bay Industrial Development Zone and Dube Trade Port combined have already attracted more than R20bn worth of FDI.
Dube-Ncube said the government wanted potential investors to partner local entrepreneurs to achieve the skills exchange needed to grow different sectors.
She also challenged business to ensure that the province embraced the Fourth Industrial Revolution (4IR), citing World Economic Forum (WEF) statistics, which indicated that less than 10% of companies’ business models would be economically viable as the world digitalises.
“Digital platform business models are forecast to mediate up to 30% of global economic activity by 2030, yet fewer than 5% of traditional companies have a coherent platform strategy integrated with their corporate strategy.
“Apparently, the most successful business model today - in terms of customer value, revenue growth rates and market valuation - is the digital platform business model. Shockingly, the analysis by WEF shows the vast majority of leaders today lack confidence that their organisations are ready to harness the changes associated with4IR,” she said.
KZN Premier Sihle Zikalala said the government was committed to working with local business chambers in the province, which recently established an initiative to address construction site invasions to ensure business stability.