Political stability strengthens Cape Town’s appeal to investors

An expert argues that Cape Town's political stability is attractive to investors and the city will likely continue to enjoy this confidence after the November 4 local government elections.

Cape Town’s political stability over the past five years has helped the city attract local and international investors who would otherwise put their money elsewhere if no such stability existed.

The city is the only metropolitan council that retained the same political party and mayor for a full five year term while other municipalities, governed through coalitions, chopped and changed administrations and mayors.

But political stability alone, without appointing competent people, is no guarantee for investor confidence in a city or town, according to Professor Zwelinzima Ndevu, head of Stellenbosch University’s School of Public Leadership.

“Investors want to ensure that they invest their money in a secured space or secure environment. So they will typically invest in any municipality or city or town that is more stable politically and otherwise,” he said during an interview with Cape Times.

“Cape Town has been very stable, and therefore, able to attract investors, either locally or internationally. If that were to be tampered with and there was instability, that would have a negative impact on investment in the city,” he added.

We will typically see the city struggling in terms of attracting investment.”

But Ndevu predicted that there will be continuity of the stability and that the DA was likely to get an outright majority to govern the city after the November 4 local government elections.

“If you look at the trends in the city of Cape Town during the national and provincial elections, the DA has been very strong, it has actually consolidated itself and I don't see them losing that support or losing the majority,” said Ndevu, adding that the party may lost some votes among Coloured voters to the Patriotic Alliance, although he doesn’t think this will be a significant loss.

“One does expect to see them maintaining their current support base within the city itself and so, that would bring some form of stability.”

Ndevu warned however that stability does not always guarantee that services will be delivered, citing Buffalo City in the Eastern Cape which has had “relative stability” - two mayors over the past five years, but that had not translated into service delivery.

Ndevu said the stability in Cape Town had also been due to the DA government appointing competent people into position and exercising greater accountability for those entrusted with responsibility in the administration including for politicians.

Ndevu said if there is no outright winner following the November 4 elections, potential investors would first want to see the makeup of the coalition government that would govern the city before investing in it.

“If I am an investor, and I am comfortable that these people are competent, they are going to be able to do their job, then I would want to invest my money there. But if I'm not confident that these are competent people and are going to deliver, I certainly won’t put my money in there.”

Ndevu said it would depend on the kind of coalition and whether investors believe they would get returns on the investment or something that would be money down the drain.

“If the coalition is like the Johannesburg coalition, where there had been jostling for positions all the time, and lack of service delivery, then investors will probably not put their money in such a coalition.” 


Meanwhile, a Business Confidence Index conducted by the Cape Town Central City Improvement District (CCID) this month showed that business confidence in Cape Town has skyrocketed, underpinned by the diversity and scale of opportunities available in the city centre.

In a statement, the CCID said confidence among business owners and entrepreneurs in the Cape Town CBD had reached a historic high with an unprecedented 98.7 % of businesses stating they are highly satisfied with current trading conditions.

The index was completed between August 31 and September 11.

CCID CEO Tasso Evangelinos said businesses in the Cape Town CBD were reporting a favourable trading environment with 58.11 % of businesses believing conditions had improved over the last year.

“What’s more, forward-looking confidence is also strong with 79.1 % of businesses rating their outlook at 4 or 5 out of 5.”

According to the CCID, the statistics stood in stark contrast to the rest of the country, as the latest RMB/BER Business Confidence Index showed that South African business confidence had fallen to a two-year low.

The CCID said research published in the State of Cape Town Central City Report 2025 – A Year in Review (SCCR), its flagship publication, 3 547 businesses were operating in downtown Cape Town at the close of 2025, an increase of 257 businesses on the previous year and a significant year-on-year growth recorded since the post-pandemic rebound.

Evangelinos said the CBD was not reliant on a single sector or type of economic activity, as retail, hospitality, healthcare, professional services, finance, technology and business services were performing well as sectors.

Retail remained the dominant commercial force in the central city and recorded the largest increase in businesses during 2025, adding 172 businesses to reach 1 495 entities.

The City’s own  2025/26 Business Satisfaction Survey, part of its Ease of Doing Business Index saw businesses give the City an overall Public Service Quality (PSQ) score of 92, up from 86 in 2023/24 and placing performance in the survey’s “good performance” band, a strong result for a public service provider.

The PSQ score is calculated from businesses’ responses to four measures covering overall City performance, trust in the City, fulfilment of its role as a municipal service provider, and its performance compared with other public institutions.