St Helena's first airport set to stimulate tourism and investment
The opening of the first airport on the South Atlantic island of St Helena, due in December 2015, is set to spark investment opportunities, private sector growth and tourism.
Building has already begun following the signing of the construction contract at the end of 2011 between the British government and South African construction firm Basil Read. St Helena, a British Overseas Territory with stability and transparency akin to the UK, has strong commercial and family links with South Africa and Cape Town in particular.
Currently attracting 2000 tourists per year, St Helena can only be reached by boat, which takes five days from Cape Town. A large focus to encourage investors and promote economic growth on this 122 square kilometre island is to have a tourist cap on visitor numbers. This would be the maximum number of tourists allowed on the island per year in order to protect its unique ecosystem and maintain exclusivity of this exotic and spectacular high-value destination.
Main focus areas for GDP growth
As part of St Helena's 10 year Sustainable Development Plan, St Helena's government has recently launched the 10 year Economic Development Plan, which outlines its approach of opening up the island's economy to investment and increased tourism, and, thus, to become financially self-sustaining. The main focus areas to enhance GDP growth are land, immigration, tax, subsidies, government capacity, and tourism.
To achieve the required growth in tourist numbers will demand the need for two to three cornerstone tourist developments, a few large and medium-sized hotels, and an improved island-wide tourism offering. Many opportunities exist for the private sector to build and run hotels, provide good-quality restaurants, as well as increase the tourism activities and experiences. All this combined with tourists staying for a week or more - think villa-style winter escapes - means that St Helena should be able to sustain a daily flight to the island. This would also open it up to short stays as an add-on to a trip to South Africa for foreign visitors.
Finance its own budget by 2022
"Construction of the airport, combined with a proactive approach to growing our tourism sector and developing the overall economy, means that St Helena aims to be able to largely finance its own budget by 2022 without any need for overseas aid," said Mike Dean, St Helena Tourism Development executive.
Through large-scale investment, the tourism sector is seen as critical to developing the private sector. The Economic Development Plan requires the private sector to grow modestly, with a 10 to 20 percent increase in the number of businesses and a substantial 30 to 40 percent increase in on-island private sector jobs. Now is the prime window for investors to identify and secure investment and business opportunities in the three-and-a-half years prior to the airport opening at the end of 2015.
Revised investment policy
To maximise the benefits arising from St Helena's air access, a revised investment policy was introduced by the St Helena Development Agency that will remove pre-existing barriers, promote investment and improve fairness and transparency in decision making. Growth on St Helena also requires a sizeable increase in the 4000-plus resident population, both through a returning Saint Helena diaspora, as well as a development-friendly system that will invite non-St Helenians to enter, work and acquire land.
"St Helena's government will also be reducing its economic footprint and divesting in services so as to allow for the much-needed private sector growth," said Dean.
Besides tourism development, the airport will create an opportunity for new businesses with import and export potential, as well as enabling improvements in sectors such as fishing and farming (coffee, distilling, etcetera) as access for both people and high-value cargo is transformed with air access.