Tech enriches South Africa’s Cape; premier rejects Brexit style secession

By Ashely Simango, Ray Mwareya
Posted on Wednesday, 1 June 2022 16:02

Contested land earmarked for a development, which includes a new Africa headquarters for U.S. retail giant Amazon, is seen alongside the Liesbeek river in Cape Town, South Africa June 2, 2021. Picture taken June 2 ,2021. REUTERS/Mike Hutchings

Buoyed by tech money flowing into the region, there have been calls in some quarters for South Africa’s Western Cape Province to do a ‘Cape-Xit’ and secede from the rest of South Africa.

“We [seek] the creation of a new sovereign state, which no longer forms a part of the Republic of South Africa,” Phil Craig tells The Africa Report.

He is the co-founder of the Cape Independence movement that wants the envisaged future country to be named ‘Cape of Good Hope’.

Craig claims that a 2021 informal and non-binding poll showed that 46.2% of the Cape’s residents support independence and 58.0% favour a referendum on secession.

At the heart of the secessionists’ grievances are the feeling that South Africa is falling apart as a country and that the Cape province must not be dragged along with it.

“South Africa is intent on self-destruction,” Craig says, referencing a lack of energy security, staggering levels of corruption, the world’s highest youth unemployment rate and spiralling crime.

The Cape Independence Party further accuses the South Africa Revenue Service of not returning 78% of revenue raised in the Cape province, claiming that residents cough up R3.5bn ($194m) per week to the National Treasury.

Much of the economic success in Cape Town, the province’s capital, has been attributed to the global tech firms that have set up shop in the city.

In 2019, Cape Town recorded an R489bn GDP ($32bn), contributing 9.6% of the South African economy’s GDP and making 11.1% of South Africa’s formal employment, according to the mayor’s office. The Western Cape, with a population of 7.1 million people, is the country’s second-wealthiest province in the country.

Lagos and Nairobi are Africa’s IT venture fund darlings, but the fact that Cape Town is beating both cities in the number of tech jobs created is a feat that Western Cape’s premier, Alan Winde, attributes to what he says is a diverse community of companies across the technology supply chain; an efficient local bureaucracy; a skilled workforce, and excellent IT infrastructure.

“Research shows that the Cape Town/Stellenbosch region already employs more than double the number of people in the tech sector than both Nairobi and Lagos combined,” says Winde.

The Western Cape provincial government is increasingly charting its own path, demanding devolution on issues ranging from policing powers to mass rail transportation.

The fault lines of apartheid spatial planning, its glaring class, and race divisions make Cape Town the most divided city in the world

The Cape is even planning to build its energy supply infrastructure and hopefully decrease reliance on Eskom. Cape Town City is in the process of procuring energy from independent producers. This year, Cape Town has already published tenders to buy 300MW from independent producers, hoping to end severe load-shedding by 2027.

Cape Town is also readying plans to produce electricity locally from landfill gas though the mayor of Cape Town, Geordin Lewis tells The Africa Report that all these efforts don’t mean the total abandonment of South Africa’s ailing Eskom grid.

Perhaps the boldest example of the Cape’s distancing from the rest of the country is when the provincial government condemned Russia’s invasion of Ukraine and banned Russian diplomats from its meetings. “The Western Cape cabinet felt strongly that it could not remain silent in the face of an international crisis that threatens the very foundation of our liberal international order,” says Winde. Consequently, the South African national government accused the Cape of running a parallel foreign policy.

‘Not a sensible idea’

Even so, observers say secession from the rest of South Africa is not a sensible idea. Anthony Black, a senior economics professor at the University of Cape Town, says the province is highly integrated into the rest of the SA economy and while there is a small stock exchange and the IT sector is booming, this is not the basis for an independent economy.

“Though [The Cape] has better public administration, [and] feasibly [The Cape] could become independent, this would be a very costly and bad outcome,” he tells The Africa Report.

Moreover, local activists say the reality of  ‘Cape-Xit’ and a prospering ‘Silicon Cape’ will continue to harm the Cape’s poorer residents of colour because the prosperity benefits White communities and prices out the rest.

“The fault lines of apartheid spatial planning, its glaring class, and race divisions make Cape Town the most divided city in the world,” says Tauriq Jenkins, the high commissioner of Goringhaicona Khoi Khoin First Nation Traditional Council, who led the lawsuit that halted recently Amazon’s headquarters construction in Cape Town.

Critics like Jenkins further claim Cape Town’s prosperity is leaving poorer residents living far from transport hubs, services, and jobs. Its social housing policy is geared toward evictions, and building of low-income homes on the outskirts of Cape Town where land is cheap, and far from the city’s hubs.

“In any city in the world, economic growth naturally results in changes to property values in some areas,” says Luthando Tyhalibongo, Cape Town mayor’s spokesperson.

In South Africa, technology will likely appropriate state functions to an extent that eventually sees ‘smart communities’ achieve de-facto independence in enclaves robust enough to withstand the erosion of the state in South Africa, says Dr Frans Cronje, the former head of the South Africa Institute of Race Relations.

However, Stephen Chan, a professor of Africa governance at the University of London, says people shouldn’t read too much into the Cape’s growing prosperity, its ability to fend for itself and usurpation of roles of the national government. “This is hardly unusual. This simply shows that, as in the UK, some citizens of the country can have first-world options.”

Understand Africa's tomorrow... today

We believe that Africa is poorly represented, and badly under-estimated. Beyond the vast opportunity manifest in African markets, we highlight people who make a difference; leaders turning the tide, youth driving change, and an indefatigable business community. That is what we believe will change the continent, and that is what we report on. With hard-hitting investigations, innovative analysis and deep dives into countries and sectors, The Africa Report delivers the insight you need.

View subscription options