The Real Economy Bulletin - Provincial Review 2022

The annual 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.