Cape Town: African city of opportunity


  • Is traffic in Cape Town really worse than in Los Angeles?
  • Do the city's townships really recycle 40 times less than those in Mumbai?
  • Why is transport six times less affordable for the poor than for everyone else in Cape Town?
  • Can the city compete with global tech hubs, like London and Singapore, when less than 6% of citizens are university graduates?
  • Our latest report, Cape Town: African city of opportunity, explores these themes and more by benchmarking the city against 30 other global hubs across a series of 66 indicators relating to quality of life, economics, and the tools – such as human and intellectual capital and city brand – needed to succeed in a changing world.

Cities of Opportunity consists of 66 indicators across ten categories. The chart below/above shows how each of the cities in the study ranks in each area. The drop down on the left allows users to select one of these categories and either view the overall score for that indicator - for example Technology readiness, or Transportation and infrastructure - or to drill into the detail - for example to see the scores for Internet access in schools or Affordability of public transport.

The filter button allows users to show all cities or to filter out the high-income country cities, and focus on those which, like Cape Town, have lower incomes per capita. Note that the chart only shows rankings. For the actual scores, please see the full report.


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*  Country-level data
** Data based on countries’ most populous city
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Cape Town's highest score is the Transportation and infrastructure. This might come as a surprise to Capetonians, who are known for their opinions on the city's traffic, and its public transport. On the other hand, the city scores poorly for Tech readiness, which will surprise many of the city's young start-up founders and tech entrepreneurs as well as calling into question its claim to be the 'Digital gateway to Africa'.

As with all benchmarking exercises, this study lifts the curtain on local anecdote to provide a true picture of Cape Town versus its international peers. As it happens, bad traffic is a feature of almost all the major cities and focusing on becoming the next 'digital hub' is almost as common.

However, there are certain areas where Cape Town does stand out. Some of these are due to its longstanding attributes - natural beauty, good universities and the relatively low cost of living - others are a result of government policy -ease of doing business, transport and airport ranking.


Brain drain? Measuring relocation attractiveness

Cape Town scores fairly well in the study for Relocation attractiveness, but we wanted to understand this variable more as it is critical in understanding how the city competes with others for global talent. The education level of expatriates is a good indication of a city’s relocation attractiveness and shows how cities can import intellectual capital, either to complement or replace home-grown talent.

An analysis of South Africa’s top five metros (population > 2m) shows that Cape Town outperforms all other metros with 17% of ex-pats having a bachelor’s degree or higher. This is more than three times higher than the figure for the city’s population as a whole (5.5%).

This might go some way to explaining why Cape Town has more skilled jobs and much lower unemployment than other SA metros, but it is not an ideal solution. Relying on foreign talent means competing against the rest of the world, and this can be undermined easily by factors outside of the city’s control.

Furthermore, foreign work visas are not easy to obtain in South Africa and political instability and currency movements discourage foreigners from seeking to earn rands.

Traffic trends: How frustrating do people find congestion?

Using Google trends data, which tracks the popularity of a search term over time, it is possible to show how concerned residents are with one issue relative to all others. We compared searches for the term ‘traffic’ in four (largely) English speaking cities: Cape Town, Johannesburg, Los Angeles and Sydney.

The figure below shows that over the course of a year, Cape Town’s searches are significantly higher than the other three cities, and that Johannesburg’s are also higher than Los Angeles.

Several possibilities lie behind these scores. Neither Cape Town nor Johannesburg have mass-transit rail systems, meaning road is a more important part of the average commute. Cape Town also suffers from a ‘mono-mode’ spatial legacy whereby a large majority of the jobs are in the city centre and a majority of housing is in the suburbs, resulting in inefficient ‘tidal’ passenger flows (empty buses on return journeys). While many Los Angeles residents might work in a business near to their suburban home, this is not possible for most Capetonians.

It is also possible that residents of Los Angeles – well-known for its traffic – have been resigned to live with it and assume longer journey times, while South Africans are still motivated to search for a quicker route - or at least to make their views known publicly.

Unfare: The poorest spend the most on public transport

Cape Town scores highly in the study for Affordability of public transport, which indicates the proportion the average citizen’s income that they would have to spend on a train journey from the city centre to the outermost suburb. This strict criteria is necessary to be able to compare 31 global cities but we wanted to delve into this indicator in more detail for two reasons.

First, trains in many developed cities are considered a preferable mode of transport and are quick, comfortable, reliable, safe and costly. In Cape Town, trains are a cheap, but unreliable, crowded and often unsafe, meaning that this comparison holds less weight. Furthermore, in terms of income, South Africa is the most unequal country in the world*, therefore comparing the ‘average citizen’ is problematic.

The chart compares the affordability of public transport in South African cities across all major modes: bus, train and taxi. It shows that while the average Capetonians spend as little as 4% of their income on public transport, the poorest quintile spend roughly 25% - although this compares favourably with Johannesburg, where the poor can expect to spend 40%.

* Of countries with >1m population


Make education and safety top priorities, even though they are complex

The City of Cape Town has full control over neither education nor safety. Nevertheless, this study finds that both areas are implicated time and time again. Some cities, such as Seoul, have made great progress in recent years thanks to national education policy changes. Other cities have taken matters into their own hands. When it comes to policies, New York went from being synonymous with crime in the 1990s to be rated the 10th-safest city in the world in 2015. Both of these stories share a theme: commitment and collaboration. Crime and education were made major strategic priority areas and delivery was driven actively with advanced data collection and regular reporting. Cape Town has the power and the ambition to be the catalyst for such a change, as it has shown with its success in tackling unemployment.

Embrace technology and innovation and don’t be scared to experiment

Cape Town’s use of its Enterprise Resource Planning (ERP) is regarded as one of the best examples in the world. But ERP systems are a long way from the new technologies of the fourth industrial revolution. When it comes to many of these ‘smart city’ solutions, there is no set playbook. Cities across the world are experimenting with technology and applications to see which one works best for them.

Cape Town has all the right ingredients to become a test bed for new smart city innovations, yet the city has yet to launch an official citizen engagement app, and its use of the Internet of Things (IoT) and other smart-city solutions is limited. The majority of activities that a city carries out day to day can be improved with technology – there might not yet be 'an app for that' – but there could be.

In the fast-moving digital world, cities cannot apply tried and tested ways of doing business and they should not be scared to fail along the way; it might be the birth of the next success.

Make resilience about more than just water

The megatrend of climate change and resource scarcity means that natural disasters such as the drought Cape Town is currently experiencing will become more common in cities across the world. Cape Town’s water resilience plan is progressing rapidly, with the demand side responding especially well - households have halved their usage in the past year. But this may not be enough. Although the taps are likely to stay on this year, the drought will affect businesses both large - farmers, SAB Miller’s Newlands Brewery, and small - car washes and swimming pools, as well as tourism.

São Paulo provides a cautionary tale: it ranks 6th for Water-related business risk but since this study was concluded, it has been gripped by its worst drought in 80 years. Cape Town should assess its resilience to withstand other natural disasters. For example, the city sits on the Milnerton fault, meaning earthquakes are a 'rare but very real threat'. And resilience is about much more than being able to withstand environmental damage. As the report makes clear, the city also needs to constantly assess its ability to stand shocks of the organisational, social and economic type.

Learn from the best

This study is full of success stories that are replicable: tech-enabled schools in Kuala Lumpur, Ease of doing business in Singapore, water resilience in Los Angeles, recycling in Mumbai.

Cities are often lured into thinking that they are prevented by legislation or funding from doing things differently.

These examples, and many others, show that there are a host of innovative ways to solve even the most complex of problems, often without legislating and at little cost. Cape Town should study the innovative strategies, smart regulations and incentives that leading Cities of Opportunity use to make life better for their citizens.

One example the city could prioritise is land reform. The City owns vast tracts of land, both greenfield and brownfield, and the need for affordable housing in the city is very real, with multi-year waiting lists for social housing.

The city government cannot single handedly transform housing supply; this requires private-sector involvement which, along with promotion and active collaboration could be improved by simplifying the city’s complex land regulations, many of which have not been reviewed in years.

Build on the success of tourism

Through initiatives such as Invest Cape Town and Wesgro, the city is building a strong brand and has a clear idea of what the region should be known for, including technology, business process outsourcing, ecotourism and wine. Since the 2010 FIFA World Cup, tourism in particular has gone from strength to strength, with airport passenger arrivals 24% up year on year and a succession of international travel awards – but an equivalent rise in foreign direct investment or educated talent has not yet followed. Government and businesses should challenge themselves to think: 'What would I remember if I came here on holiday?' By focusing on customer-centric solutions like fast 4G/5G networks, visible security and apps to help people get around, the city can use the success of tourism as a springboard for the rest of the economy.

Collaborate widely

City governments cannot control much of what happens within their boundaries - but they have more influence than anyone else. This study uncovers many examples of the city government working with others to achieve better outcomes, whether with property-owners in city improvement districts, with provincial government to encourage safe driving, or with national government to encourage investment promotion.

There have also been great improvements when city departments work together, as shown by the EPIC emergency response system, and the transit oriented development approach. But there are many more opportunities on the horizon, whether in the devolution of powers from PRASA and Transnet, or in working to simplify business and tourist visas. As with innovation, a culture of collaboration does not always come naturally to government, but it often leads to the best solutions

Citizen-centric government is a win-win

The most powerful form of collaboration is with citizens. Understanding their needs helps to ensure public funds are spent efficiently - for example sending bills via email. Being able to change behaviours - whether it’s carpooling, recycling or using less water - changes outcomes. Inviting citizens to use city data openly may result in the solving of a problem thought too difficult to solve, or the discovery of unknown risks.

Citizen-centric government does not require technology, but it has greatly changed the dynamic. The city currently has multiple, distinct points of contact with its citizens, most of which could be moved from paper and premises into people’s pockets. This might start with a citizen engagement app that allows citizens to view and pay bills, report potholes, or check the latest dam levels.

Such a platform could be updated to host any number of city functions and, in so doing, lead to a re-imagination of the citizen-city relationship.As well as real-time warnings about fires and location-specific transport updates, the app could allow the user to ‘rate’ water engineers like TripAdvisor, or even to hail the police like they would with Uber. Neither is inclusion any longer an insurmountable problem. Around two-thirds of citizens have access to the internet on a mobile device, many of the rest have handsets with basic functions like USSD, and data costs can be overcome by partnering with the networks as many South African banks have recently demonstrated.

Big data to solve big problems

One of the biggest benefits of increased citizen engagement is increased data, but even without citizen engagement apps, the City of Cape Town holds more data on its four million residents than anyone else. If data is the new oil, Cape Town sits on an unexploited oilfield. As with digital technology, it is hard to think of a service the city delivers that could not be improved with better use of data and analytics: optimised fleet maintenance and transport routes; people analytics to improve staff engagement; mining big data to close gaps in billed revenue; predictive analytics to provide more efficient, tailored basic services.

Actively drive data-led delivery

City administrations are often elected on the basis of ambitious visions but fail to implement them, eroding trust in government. The gap between the two is filled by focusing relentlessly on what has recently been termed ‘the science of delivery’. Many governments - including that of the Western Cape - have implemented delivery support units whose sole focus is to drive delivery in a handful of key strategic priority areas, particularly education. As well as emphasising routines, people and leadership, this approach relies heavily on data, but not of the ‘big’ variety described above. Instead the emphasis is on collecting the right strategic data to understand the performance of government and on actively using it

The former might involve city benchmarking reports (such as this study) or tracking outcome areas over time, to observe the effectiveness of different interventions. The latter requires data to be accessible on mobile devices, presented in a compelling way, often with visual dashboards, and kept up to date. Many cities have a 'mayor’s dashboard' which senior stakeholders can use to track key political priorities; London has gone a step further by making its mayor’s dashboard accessible to the most senior stakeholder - citizens.

Attract and retain the best people

As well as attracting foreign talent to Cape Town, the city must also ensure that it attracts and retains the best talent itself. The City of Cape Town alone employs almost 30 000 people, their job satisfaction translates directly into citizen satisfaction. As the future of work changes, the public sector must keep up with what the private sector is increasingly offering. This is twofold: The future of work is both social – flexible, remote working - and technical: employing the skill sets of tomorrow.

The City of Cape Town has recently transformed its organisational structures and is in the process of implementing programmes around flexible working and transversal management. But there is an enormous amount of untapped potential in every workforce and people analytics can be used to understand and improve human relations.

Similarly, in the modern world of work, there is an increasing need for specialist cross-governmental teams that can support existing departments. These include the delivery support units mentioned above, but also teams that specialise in areas such as digital, innovation and data analytics.

Build on strong foundations

Although none of the indicators in this study directly relate to the city’s balance sheet or finances, our Future Cities model recognises that these are critical building blocks for success in citizen outcomes.

Unlike many African cities, Cape Town has a reputation for sound urban finance and infrastructure, consistent service delivery and good governance which have translated into success in this study: high scores for Transportation and infrastructure; collaborative partnerships such as city improvement districts; and successful public employment programmes.

But there is always room to do more. For example: Does the city leverage its assets to their full effect? Is maintenance spending in areas like water enough to ensure current efficiency and future resilience? What steps could be taken today achieving a fully-integrated transport system? As Cape Town embraces new strategic and digital city solutions, it should continually revisit these fundamentals.

Contact us

Chantal van der Watt

Chantal van der Watt

Associate Director | Sustainability and Climate Change, PwC South Africa

Tel: +27 (0) 11 797 5541

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