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The Real Economy Bulletin
- Janet Wilhelm
Janet Wilhelm
Engineering News – 2 March 2023 by Schalk Burder (Creamer Media Senior Contributing Editor)
The Real Economy Bulletin - Provincial Review 2022
The REB Provincial Review analyses developments in the real economy and in development policies and projects at the provincial level.
Main Bulletin: The Real Economy Bulletin Provincial Review 2022
Introduction: Much like elsewhere, production in South Africa is centred on a few provinces. In 2021, Gauteng remained the largest provincial economy, accounting for a third of the national GDP and over a quarter of the national population. KwaZulu-Natal is the second largest economy, accounting for 16% of the national GDP and 19% of the total population, followed by the Western Cape, which accounted for 14% of the national GDP and 12% of the total population. The Eastern Cape and Northern Cape contribute 8% and 2% respectively to the national GDP share. Read more.
Eastern Cape: The Eastern Cape is the fourth most populous province in South Africa with a slow population growth rate. The Eastern Cape’s contribution to the national GDP has been declining since 2011. Manufacturing is the largest real economic sector, followed by construction, with relatively small mining activities. Read more.
Free State: The Free State province in South Africa has a slow-growing population and it is the second-lowest contributor to the national output after Northern Cape, with its contribution to GDP remaining flat over the past decade. The lacklustre contribution to GDP and growth rate is often attributed to the waning mining sector in the province. Read more.
Gauteng: Gauteng is the most populous province in South Africa, with a rapidly growing population due to a large influx of internal migrants. It is also the largest economy in the country, although its growth performance has been in decline since 2005, with steeper declines during global shocks such as the 2008/9 global financial crisis and the COVID-19 pandemic. The real economy in Gauteng is dominated by the manufacturing sector, which accounts for 15% of the province's output, followed by construction, mining, and agriculture. Read more.
KwaZulu-Natal: KwaZulu-Natal is the second largest economy in South Africa, and its real economy is dominated by the manufacturing sector, particularly petroleum, food, and beverage production. The province also has a significant agricultural sector, employing more than 90 000 people, and a smaller construction industry. The COVID-19 pandemic has had a significant impact on KwaZulu-Natal's economy, with employment in the real economy declining by 16% since Q1 2020. Read more.
Limpopo: Limpopo has the highest share of population living in former homelands. Despite a declining growth rate since 2011, Limpopo's contribution to national GDP has remained stable and accounted for 7.2% of the national GDP in 2021. Among real economic sectors, mining is the most significant contributor to the province's GDP, accounting for 30% of the provincial output in 2021, while agriculture and manufacturing are almost equal, contributing 3.3% and 3.1%, respectively. Read more.
Mpumalanga: Mpumalanga’s real economy is mainly driven by the mining industry, followed by manufacturing. The petroleum, metals, and food and beverage industries are the largest manufacturing industries in the province. COVID-19 has had a devastating impact on employment in Mpumalanga. Between Q1 2020 and Q1 2022, the manufacturing sector lost 30% of jobs, followed by construction with 21%. In contrast, mining and agriculture saw employment growth of 13% and 10%. Read more.
North West: In 2021, North West contributed 6.4% to the national GDP, with a real economy driven primarily by the mining sector. The mining sector accounted for 33% of the provincial output in 2021 and experienced exponential growth in 2021 due to a surge in commodity prices. The province also has a significant manufacturing sector, dominated by food and beverage production. Read more.
Northern Cape: The Northern Cape is the least populated province in South Africa and contributes the least to national output, with a growth rate that has consistently declined since 2011. However, during the COVID-19 pandemic, the province experienced a growth rate of 3.3% due a commodity boom. Among the real economic sector, mining plays a dominant role in the province, accounting for 24.6% of the provincial GDP. Read more.
Western Cape: The Western Cape is the third largest economy in South Africa, with a population of 6.9 million residents. Its contribution to national GDP declined from 14% in 2019 to 13.6% in 2021. The real sectors, including agriculture, mining, manufacturing, and construction, account for 22.6% of the provincial output, with manufacturing being the biggest sector. Read more.
Shine a light on myths about load-shedding
Business Day - 21 February 2023 by Neva Makgetla (TIPS Senior Economist)
Presidential Climate Commission webinar: implications of the EU's Carbon Border Adjustment Mechanism on SA's exports
TIPS Senior Economist Gaylor Montmasson-Clair took part in the Presidential Climate Commission webinar - see articles
EU carbon border tariffs could knock $16bn off Africa’s yearly GDP
Engineering News - 15 February 2023 by Terence Creamer
Read online at Engineering News
EU's carbon penalties are coming, here's what SA needs to do
News24 - 15 February 2023 by Lameez Omarjee
Where is the outcry over ‘deeply unjust’ EU carbon border tax?
Business Day - 17 February 2023 by Denene Erasmus
Read online at Business Day or Read PDF
Black Industrialists Profiles
The Black Industrialists Policy aims to increase the participation of black South Africans in operational management, rather than just financial ownership, of enterprises in key sectors and value chains. The programme was launched in 2015 by the Department of Trade, Industry and Competition, supported by the Industrial Development Corporation and the National Empowerment Fund.
The Black Industrialists Conference in August 2022 examined the impact of the Black Industrialists Programme and explored support measures to boost entry of black-owned businesses and producers into the mainstream economy. It also showcased the work of black industrialists. As an input into the conference, TIPS prepared nine case studies on black industrialists. Renee Grawitzky conducted the research and interviews, and TIPS provided the industry context and looked at the broader developmental objectives.
CapeBio Technologies: biotechnology company
Easy Farm: farms and exports cirtus
Flat-Foot Engineering: mechanical engineering provider
Ikusasa Green: manufactures roto-moulded cooler boxes
Microfinish: manufactures parts for the auto world industry
Pambili Media: film production company
PepsiCo ESOP: employee ownership scheme
Sindane Mining Ventures: civil engineering and equipment-rental company
Small is Powerful: Local green enterprises - how to finance a powerful catalyst for change
Small businesses are the engines of a fair and green economy. But they lack access to the finance they need to grow. A new report from the Green Economy Coalition (GEC) looks at the barriers that small business face. These include risky and informal money lending arrangements, high bars for accessing credit, regulatory hurdles, and a lack of information on how to access finance. The report includes case studies from countries such as India, Peru, Senegal, Uganda and South Africa. The South African case study looks at the Seeds for Life Farm Primary Cooperative.
The report draws on research and work conducted by GEC members: Caribbean Natural Resources Institute (Trinidad and Tobago), Advocates Coalition for Development and Environment (Uganda), Development Alternatives (India), Trade & Industrial Policy Strategies (South Africa), Libélula (Peru), Foro Nacional Internacional (Peru), Innovations Environnement Développement Afrique (Senegal), the International Union for Conservation of Nature (Senegal) and the Economic Policy and Competitiveness Research Center (Mongolia).
Download the report or read online:
Main Report: Small is powerful
Case Study: South Africa
Services and inclusive industrialisation
Industrialisation cannot take off without adequate services such as logistics, engineering, finance and security, as well as human and social capital development. Moreover, the service sector generates around two thirds of the GDP and employment, and six out of seven jobs for women. An effective industrial policy, then, should incorporate measures to maximise the contribution of the service industries to inclusive industrialisation. To assist in understanding the role of the service industries in inclusive industrialisation in South Africa, this paper undertakes the following:
- It outlines the factors behind the changing role of services in the economy.
- It maps out the main services industries in South Africa. The analysis points to five broad groups from the standpoint of industrial policy: the professional business services including finance; the services needed for human capital development (mostly education and health); cultural and personal services and hospitality; logistics and retail; and cleaning and security.
- The paper then summarises the main debates around the role of services in industrial policy.
- The concluding section briefly outlines the potential contribution to inclusive industrialisation of the five services subsectors and where they now fall short, as the basis for further research.
The annexure provides case studies of engineering and logistics.
Solar Power Africa 2023
Reports from Solar Power Africa 2023 conference
South Africa's current solar procurement progress is "not-enough"
ESI Africa - 9 February by Nasi Haka
Read online at ESI Africa
Solar Power Africa: 2050 is too far a target for net zero
ESI Africa - 10 February by Nasi Haka
Read online at ESI Africa
Longer-term measures needed to reduce prices of staple foods
Business Day - 7 February 2023 by Neva Makgetla (TIPS Senior Economist)
RESPONSE TO COLUMN
Letter in Business Day - 7 February 2023: Ride out temporary price swings by Wandile Sihlobo (Department of agricultural economics, Stellenbosch University)