A summary of key future opportunities in ocean economy in South Africa.

1. UNLOCKING SOUTH AFRICA’S OCEAN ECONOMY
FUTURE WATCH: OCEAN ECONOMY

2. AUTHORS
Future Watch Report2
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Zahil Jackpersad
Consultaing Analyst
Lehlohonolo Mokenala
Consultant

3. OCEAN ECONOMY
TOPICS
Future Watch Report3
1 WHAT EXACTLY IS THE OCEAN ECONOMY?
2 THE OCEAN ECONOMY THROUGH A SOUTH AFRICAN LENS
3 IMPLICATIONS AND FUTURE OPPORTUNITIES FOR TEAM FINLAND

4. Ocean
Economy
4
Maritime
Transport
5
Climate Change
6
Waste
Management
1
Renewable
Energy
2
Fisheries
3
Tourism
THE OCEAN ECONOMY REFERS TO A MULTITUDE OF SECTORS WHICH UTILIZE THE OCEAN’S
RESOURCES IN A SUSTAINABLE MANNNER TO ACHIEVE ECONOMIC GROWTH
Unboxing the Global Ocean Economy (often referred to as the “Blue Economy”) reveals the following
key sub-sectors:
Source: World Bank

5. OCEAN ECONOMY
Industry Contributions
Industry 2010 2030E
Tourism 25% 26%
Ports 13% 16%
Fisheries 6% 11%
Marine
Renewables
1% 8%
Shipping 20% 17%
Oil and Gas 34% 21%
Aquaculture 1% 1%
Total (US$ Tr) 1.5 3
Future Watch Report5
THE VALUE OF THE GLOBAL OCEAN ECONOMY IS EXPECTED TO DOUBLE
BETWEEN 2010-2030
0
0,5
1
1,5
2
2,5
3
3,5
2010 2030F
Value of the Global Ocean Economy
Definition
The Ocean Economy (or the Blue Economy) is defined as a subset of, and complement to, the evolving
development paradigm emphasizing greener and more sustainable and inclusive economic paths. It seeks to
expand the economic frontiers of coastal countries beyond their land territories. The Oceans economy
encompasses a sustainable economy for the ocean-based marine environment, related biodiversity,
ecosystems, species and genetic resources including marine living organisms (from fish and algae to micro-
organisms) and natural resources in the seabed, while ensuring their sustainable use and hence, conservation.
The value add to the Global
Economy by the Ocean
Economy in 2010 was 1,5
trillion US$, this is expected
to rise to 3 billion US$ by
2030, at a CAGR of 3.7%.
Key sectors include Tourism,
Shipping and Oil & Gas. Oil
& Gas’s contribution is
however expected to
decrease significantly, due
to the emergence of
renewable forms of energy,
hence the major increase
expected in the
contribution is of Marine
renewables.
Source: OECD (Organisation for Economic Cooperation and Development), United Nations, World Bank, FAO

6. OCEAN ECONOMY
Future Watch Report6
BY 2025, IT IS PREDICTED THERE WILL BE A GLOBAL SHORTAGE OF OVER 150 000 SEAFARERS
-400000
-200000
0
200000
400000
600000
800000
1000000
1200000
2015 2020 2025
Supply Shortage Demand
Key sectors where there will be
shortages of officers for specialised
ships include:
• LNG
• LPG Carriers
• Chemical
It was estimated in 2015 that there were 1 647 500 seaferers globally, 774 000 being officers and 873 500
being ratings, serving 68 723 ships.
Global Seafarer Supply Demand Forecast
Source: South Africa Maritime Safety Authority, The Global Supply and Demand For Seafarers Report, 2015 (Manpower Report)

7. OCEAN ECONOMY
Future Watch Report7
THE FOOD SECURITY, ENERGY AND WATER NEXUS REFERS TO THE LINK BETWEEN THESE 3
SECTORS, IMPLYING THAT ANY CHANGE IN ONE OF THE SECTORS WOULD HAVE AN IMPACT
ON THE LINKED SECTORS
Energy
Water
Security
Food
Security
Available
Water
Resources
Growth in population, CO2
emissions and urbanisation will lead
to further increases in the use of
available water resources going
forward
The purpose of the Water Food
Energy Nexus is to promote:
• Water/Energy/Food Security
• Sustainable growth
• A resilient environment
Source: World Bank

8. OCEAN ECONOMY
Future Watch Report8
0
20
40
60
80
100
2012 2013 2014 2015 2016
MillionTonnes
Capture Aquaculture
Global Marine Aquaculture and Capture Production
Capture Aquaculture Inland Marine
Aquaculture is a key contributor to
global fish production, with a share of
nearly 50% in total global production
in 2016. Within the aquaculture
sector, marine aquaculture
contributed 44% to total aquaculture
production in 2016, with the
remaining contribution coming from
inland aquaculture
For the period 2012-2016, total
aquaculture production grew at a
CAGR of 6%, while production from
capture declined at a CAGR of -0.1%,
implying that the share in production
from aquaculture will continue to
increase going forward
AQUACULTURE, AN ALTERNATIVE TO WILD CAPTURE, IS THE FARMING OF BOTH FRESHWATER
AND MARINE AQUATIC ORGANISMS EITHER ON-SHORE OR OFF SHORE
Share of Contribution To
Total Global Fish Production
Share of Inland vs. Marine
Aquaculture Production
2016 2016
Source: FAO (Food and Agriculture Organization)

9. OCEAN ECONOMY
TOPICS
Future Watch Report9
1 WHAT EXACTLY IS THE OCEAN ECONOMY?
2 THE OCEAN ECONOMY THROUGH A SOUTH AFRICAN LENS
3 IMPLICATIONS AND FUTURE OPPORTUNITIES FOR TEAM FINLAND

10. OCEAN ECONOMY
Future Watch Report10
In March 2014, the South African Cabinet approved the piloting of the Malaysian Big Fast Results (BFR)
methodology, to be known in South Africa as Operation Phakisa. Its first implementation was led by the
Department of Environmental Affairs (DEA) to unlock the economic potential of South Africa’s oceans. The
planning phase of Operation Phakisa - Oceans Economy took place in mid-2014. Six growth areas were prioritized
to contribute to unlocking the economic potential of South Africa’s oceans, based on their potential contribution
to economic growth and job-creation.
To date, the South African government has unlocked investments in the Oceans Economy amounting to around
US$2 billion since the inception of Operation Phakisa - Oceans Economy; and as a result, over 6500 jobs have been
created
OPERATION PHAKISA, SOUTH AFRICA’S VERSION OF THE MALAYSIAN BFR
(BIG FAST RESULTS) METHODOLOGY, BEGAN IN 2014
Population, 2017: 56m
Nominal GDP, 2017: US$ 349bn
Coastline: 2 798km
Major ports: 8
Exclusive Economic Zone: 1.5 million Km2
Key Facts and Figures About South Africa
5.7%
3.7%
2033E2030E2010
South Africa’s Ocean Economy is growing at a much
higher rate than the global Ocean Economy
CAGR
Source: WWF (World Wide Fund for Nature), Operation Phakisa, World Bank

11. OCEAN ECONOMY
Future Watch Report11
Identified Key
Sectors
1
Marine Transport &
Manufacturing
2
Offshore Oil &
Gas
Exploration
3
Aquaculture
4
Marine Protection
Services, Ocean
Governance
5
Small Harbours
Development
6
Coastal and
Marine Tourism
6 SECTORS WERE IDENTIFIED AS KEY FOR TAPPING INTO THE POTENTIAL
OF THE OCEAN ECONOMY
Source: Operation Phakisa

12. OCEAN ECONOMY
Future Watch Report12
Increasing demand for fish combined with low current production from
aquaculture currently in South Africa (globally, aquaculture contributes almost
half of the fish supply, however in South Africa it only contributes 0.8%) has
resulted in a major focus on the development of Aquaculture in South Africa
Offshore Oil and Gas exploration indicated South Africa’s coast and adjoining
waters have large quantities of resources, with further research and exploration
required to identify the extent of these resources
South Africa is strategically located on shipping routes for North-South and
South-South trade, and is therefore ideally positioned to serve the East-West
cargo traffic and booming African Offshore Oil and Gas Industry, which includes
ship and rig repair, refurbishment and boat building
1
2
3
Marine Transport & Manufacturing
Offshore Oil and Gas Exploration
Aquaculture
Source: Operation Phakisa

13. OCEAN ECONOMY
Future Watch Report13
This focus area was highlighted as a key sector in order to develop small
Harbours with potential for harbor infrastructure, marine and offshore aquaculture,
small towns precinct development and tourism
The purpose of this sector is to develop an ocean governance framework which
will result in the sustainable growth of the Ocean Economy
This sector aims to identify and harness the potential future contribution of coastal
and marine tourism to non-urban coastal tourism
4
5
6
Marine Protection Services, Ocean Governance
Small Harbours Development
Coastal and Marine Tourism
Source: Operation Phakisa

14. OCEAN ECONOMY
Future Watch Report14
Richards Bay
Durban
East London
NgquraPort ElizabethMossel Bay
Cape Town
Saldanha Bay
Liquid Bulk
Container Terminal
Multi Purpose Terminal
Automotive Terminal
Dry Bulk Terminal
Rig Repair
Boat Building
Ship Repair
KwaZulu-Natal
Eastern Cape
Western
Cape
SOUTH AFRICA’S NEAR 3 000 KM SHORELINE IS HOME TO 8 MAJOR PORTS,
ALL WITH MULTIPLE CAPABILITIES
Source: Operation Phakisa

15. OCEAN ECONOMY
Future Watch Report15
TO INCREASE THE EXPORT OF VALUE-ADDED GOODS AND SUPPORT INVESTMENT INTO THE
COUNTRY, THE SOUTH AFRICAN GOVERNMENT HAS ALSO ESTABLISHED SPECIAL ECONOMIC
ZONES (SEZS), OFFERING AN ARRAY OF BENEFITS
Atlantis SEZ
South Africa currently has 7 designated SEZS, as well as 3 further
proposed/non-designated SEZS, including the Atlantis Special Economic Zone
The City of Cape Town established a greentech manufacturing hub in Atlantis
in 2011, in response to the Deparment of Energy’s (DoE) Renewable Energy
Independant Power Producer Programme
6 Reasons to Invest into the Atlantis Economic Zone
• Incentives for Investors and Tenants
• A One Stop Shop (OSS) providing support to investors
• A large talent pool ranging from unskilled to professional
candidates
• A wide range of institutions and partners to provide support to
investors
• Close proximity to airports, Saldanha Port, Cape Town and
good access to road networks
• Growing greentech market in Both Africa and South Africa
Source: World Bank, the dti, GreenCape, Atlantis SEZ short brochure
Businesses operating in SEZ’s may be eligible
to the following benefits:
• A reduced corporate income tax rate of 15%
• Building Allowances
• Employment tax incentives
• The 12i tax incentive
Types of Industries which can be hosted:
• Mixed industrial zone
• Heavy and light manufacturing industries
• Large scale user industrial activities
• Warehousing and Logistics
• Greentech Manufacturing

16. OCEAN ECONOMY
Future Watch Report16
SOUTH AFRICA’S PRESENCE AS A BOAT EXPORTER HAS SHOWN STEADY
GROWTH OVER THE PAST FEW YEARS
0
50 000
100 000
150 000
200 000
250 000
2013 2014 2015 2016 2017
South Africa’s Ships, Boats and Floating
Structures Exports (US$, million)
Over 85% of the locally built boats in the
country are exported. South Africa’s
exports have nearly doubled since 2013,
in contrast to the Global export market
which has declined annually at a rate of -
2%. The market is dominated by 2 vessel
types , which contribute nearly 90% of
total exports
• Yachts (and other vessels for
pleasure/sports)
• Warships and Lifeboats
Cape Town
Durban
South Africa is home to a world class yacht building industry, with the
main hubs being Cape Town and Durban, and is the 2nd largest
producer of catamaran’s globally, after France. Parts are largely
sourced locally through manufacturers and distributors, however parts
such as special engines, doors, cranes, ramps, davits, winches and
special rudders are imported
Source: ITC, South African Maritime Safety Authority

17. OCEAN ECONOMY
Future Watch Report17
South Africa’s National Development Plan 2030 (NDP) has placed great emphasis on knowledge creation
and innovation as part of it’s growth strategy
TREMENDOUS GROWTH IS EXPECTED IN RESEARCH AND DEVELOPMENT (R & D) IN SOUTH
AFRICA
R & D
Investment
(2015)
1.94 Billion US$
R & D
Investment
(2020E)
4 Billion US$
Expected
Growth in
Investment
2015-2020
100%
Foreign
Source
Contribution
(2015)
12.2%
% of GDP Spent on R&D by BRICS members, 2014/15
0.75%2.01%0.85%1.13%1.24%
In comparison to other BRICS members, South Africa’s relative spend on R & D has been historically low,
with an increased emphasis on innovation and knowledge creation in the country going forward to
2030, this is expected to increase tremendously. The maritime sector is a highly technological sector
and is constantly changing, meaning investment in research, development and innovation is critical.
Source: Engineering News, SAMSA (South African Maritime Safety Authority), Innovation Eastern Cape

18. OCEAN ECONOMY
Future Watch Report18
CLIMATE CHANGE IN SOUTH AFRICA IS EXPECTED TO PUT PRESSURE ON FOOD, WATER AND
ENERGY SUPPLY IN THE NEAR FUTURE
Decline in certain fish stocks as
a result of both increased sea
temperatures and increased
disease transmission in fish
species
Climate Change
Water SecurityEnergy Food Security
Rainfall projections for South
Africa indicate a decline in the
frequency of low intensity rains
and increases in dry periods
between rainfall. For blue water
(rainfall into water bodies) this
impacts the energy system, water
infrastructure, irrigation and food
processing due to an increase in
possibly flooding and droughts
Rising temperatures causing
increases in evapotranspiration
rates may increase the amount
of water lost in cooling, thus
increasing water usage
requirements (renewable
energy sources generally
consume less water than coal
and nuclear power plants)
From an Ocean Economy perspective, the current and future energy, food security and water security nexus in
the wake of climate change presents opportunities in renewable energy sources such as wind, tidal and solar
and aquaculture.
Source: WWF

19. OCEAN ECONOMY
Future Watch Report19
AQUACULTURE IN SOUTH AFRICA HAS BEEN A HISTORICALLY INSIGNIFICANT CONTRIBUTOR
TO TOTAL FISH PRODUCTION, HOWEVER HAS POTENTIAL TO GROW TREMENDOUSLY
99,20%
0,80%
Capture Aquaculture
Why South African Aquaculture?
South African Fish Production, 2016
623 000
tonnes
South Africa’s Aquaculture sector currently contributes 0.80% of
the total fish production, drastically differing from the global
contributions (where aquaculture contributes nearly 50% of total
production)
Going forward, meeting current and future local demand will
require a higher contribution from aquaculture for fish production
The FAO further predicts that South Africa’s production from
capture will decline by 4.5% for the period 2016-2030,
highlighting the possibility of major growth in the aquaculture
sector to meet demand
Advantages of Aquaculture in South Africa
Satisfy Demand Food Security
Unskilled
Labour
Availability
Availability of
ADZ’s
Export
Opportunities
Source: The State of the World Fisheries and Aquaculture 2018, FAO, DAFF (Department of Agriculture, Forestry and Fisheries)

20. OCEAN ECONOMY
TOPICS
Future Watch Report20
1 WHAT EXACTLY IS THE OCEAN ECONOMY?
2 THE OCEAN ECONOMY THROUGH A SOUTH AFRICAN LENS
3 IMPLICATIONS AND FUTURE OPPORTUNITIES FOR TEAM FINLAND

21. OCEAN ECONOMY
RESEARCH AND DEVELOPMENT IS CRITICAL IN THE TECHNOLOGY AND
INNOVATION DRIVEN OCEAN ECONOMY, AND FINLAND CAN OFFER THEIR
EXPERTISE TO SOUTH AFRICA
Future Watch Report21
0 20 40 60 80 100
S. Korea
Germany
Finland
USA
Netherlands
UK
China
Spain
South Africa
Morocco
Source: 2018 Bloomberg Innovation Index
Finland is one of the leading countries with
respect to Innovation globally, ranking 7th in the
2018 Bloomberg Innovation Index, in addition
Finland also ranks in the top 10 in % of GDP
spent on R & D, and 3rd in the highest number of
professionals working in R & D relative to the
population size
South Africa, on the other hand, ranks 48th on the
same list, and 42nd in terms of spend on R & D as
a % of GDP
With technology in the Ocean Economy
constantly changing, innovation is critical, and
Finland could be considered an ideal partner to
improving R & D capabilities in South Africa going
forward.
2018 Bloomberg Innovation Index Score per Country

22. OCEAN ECONOMY
Future Watch Report22
FINLAND HAS STRONG CAPABILITIES IN GREENTECH AND RENEWABLE
ENERGY, AND COULD TAKE ADVANTAGE OF THE OFFERINGS OF THE
ATLANTIS IDZ
0
5
10
15
20
25
30
35
40
45
Finland Africa Global South
Africa
Percentage%
2016 of Renewable Energy Contribution to
Total Energy Supply
Finland is one of the global leaders in
renewable energy, with a contribution of over
40% to the total energy supply in the country,
and key renewable sectors including biomass,
hydro, wind and solar
Wind and solar have both been identified as
key areas in South Africa and are expected to
contribute tremendously to the total
renewable energy contribution in the country.
Finland can provide strong capabilities and
become a key partner in the renewable space
going forward
In addition, areas such as Atlantis SEZ could
provide further incentives for Finnish
companies to operate out of
Source: IEA, WWF, Finland Factbook, Frost & Sullivan Analysis

23. OCEAN ECONOMY
Future Watch Report23
FINLAND ALREADY SUPPLIES AFRICA WITH MACHINERY AND PARTS, AND
CAN LEVERAGE THESE RELATIONS TO BECOME A SUPPLIER OF LIGHT PARTS
IN THE MARITIME INDUSTRY
0
20
40
60
80
100
120
140
160
2013 2014 2015 2016 2017
US$Million
Finland’s Exports of Machinery to South Africa
Finland has a well developed ship and boat
building industry, particularly that of cruise
ships. In addition, South Africa imported over
100 million US$ in machinery from Finland in
2017, with Finland consistently being a trading
partner with South Africa in machinery parts
over the past few years
With boat building and maintenance being
highlighted as one of the key sectors of
Operation Phakisa, and Finland’s existing
relations as a supplier to South Africa of
machinery, Finland can become a partner to
South Africa, supplying light parts in the ship
building industry
Source: ITC

24. OCEAN ECONOMY
Future Watch Report24
SOUTH AFRICA CREATED AQUACULTURE DEVELOPMENT ZONES WITH THE
PURPOSE OF IMPROVING THE SECTOR
Algoa Bay ADZ
Target Species:
Finfish (Yellowtail)
Eastern Cape
Northern
Cape
Vanderkloof
Trout ADZ
Target Species:
Trout
Saldanha Bay
ADZ
Target Species:
Mussels
Oysters
White stupnose
Salmon
Western Cape
Amatikulu ADZ
KwaZulu-Natal
Source: Operation Phakisa, Kalankusvatus
Currently, Finland cultivate the
following species:
• Rainbow trout
• Whitefish
• Trout
• Arctic char
• Sturgeon
• Pike perch
An Aquaculture Development Zone, or
ADZ, is a specific site dedicated purely
for aquaculture use. Bulk infrastructure
such as reservoirs of water pumps may
be present to attract investment
Target Species:
Prawns
Marine and
Freshwater Fish
Coega ADZ
Target Species:
Abalone
Marine and
Freshwater Fish
Of particular interest to Finland is
Vanderkloof Trout ADZ, with
Finland possessing a strong trout
cultivating sector
Aquaculture development zones and their target species

25. OCEAN ECONOMY
Future Watch Report25
SOUTH AFRICA IS LOOKING TO CAPITALIZE ON THE GLOBAL SHORTAGE OF
SEAFARER’S
Certain changes in the current education and training system need to be made in order for South
Africa to be competitive globally, key changes include:
• Adopting new education and training technologies
• Updating programmes to cover new requirements and technologies applied to the shipping
industry
• Provide training which meets the international STCW (the International Convention of
Standards of Training, Certification and Watch keeping for Seafarers) convention
Goal: To improve the quality of South Africa’s Maritime Education and Training System by 2020
The South African Maritime Association of South Africa (SAMSA) has set the strategic outcome
oriented goal of developing a competent, supported and globally competitive local Seafarer
Finland’s Vocational Training Institutions already provide training for Seafarer’s on specialist ships,
such as LNG. The majority of the forecasted shortage in Seafarer’s is expected to be on these
specialist ships
Source: SAMSA (South Africa Maritime Association), Aboa Mare
Finnish Institutions such as Aboa Mare, in Turku already possess
international STCW certification, making them an ideal partner to improve
South Africa’s local Maritime Education sector

26. OCEAN ECONOMY
Future Watch Report26
SOUTH AFRICA WAS RANKED THE 30TH DRIEST COUNTRY IN THE WORLD
South Africa’s freshwater resources are nearly fully utilised,
and under heavy stress. By 2030, demand is expected to
exceed supply by 17%. Consequently, South Africa searching
for new forms of water to sources to meet growing demand,
with desalination being an alternate option going forward
The Water Research Committee has proposed desalination
contribute 3% to water supply by 2030, and 4% by 2040.
There is a certain difficulty associated with financing large
desalination, going forward there is expected to be a
preference towards small scale plants on the coast supplying
non-dinking water to the private sector. A permit is required
to supply off grid potable water, which has meant this is not
a focus going forward
Western Cape
Northern
Cape
Eastern Cape
KwaZulu
Natal
Low Med High Severe
Drought Key
Drought severity by Province
The Northern Cape, Western Cape and
Eastern Cape are the driest provinces
in South Africa, with the majority of
South Africa’s desalination plants
currently located in the Eastern Cape
and Western Cape, with KwaZulu Natal
growing in popularity
Source: Frost & Sullivan, Water Research Committee (WRC) South Africa, South African National Water Strategy
Finland could be a partner to local players,
providing desalination equipment and
services to the Private Sector in particular.
Players such as Wartsila, a Finnish
manufacturing corporation, could provide
both technical expertise and equipment to
the South Africa market

27. Contact
Cerqueira Mendes Inês
Senior Advisor
ME & Africa
ines.mendes@businessfinland.fi