By Jessie Taylor
Whilst being one of South Africa’s most rural provinces, Eastern Cape has vast potential to become an economic driver. In an effort to unlock the earning potential of the province, investment is being made into infrastructure such as roads, smart cities and special economic zones.
Unemployment remains a challenge in the province, with more than 47% of adults out of work. Of those with employment, around a quarter are in the informal sector.
However, Eastern Cape is home to a significant labour force: The province has the third-largest population (around 7 million people), following Gauteng and KwaZulu-Natal. Yet almost 13% of households in Eastern Cape live in poverty, and many others are based in isolated, rural areas where access to government services is limited.
The Eastern Cape’s GDP is around R340-billion – less than 8% of the national GDP.
The province is home to key facilities in the automotive manufacturing sector and also boasts several timber processing plants linked to forestry plantations. The province is serviced by two harbours, and the region has become a popular site among the renewable energy and agro-processing sectors.
Building towards the future
Investing in the province is essential to unlocking its economic potential – and this is exactly what the national government, provincial government and the private sector have committed to.
In his State of the Province address earlier this year, Eastern Cape Premier Oscar Mabuyane said: “The people of our Province expect government and social partners to solve the unemployment challenge. In response to this expectation, we have started to collectively address the economy that is not growing at an acceptable rate. In this regard, we are building an enabling infrastructure as a catalyst to grow the economy and create jobs.”
Premier Mabuyane announced several infrastructure projects that would be opening up transport links across the province.
These include eight major road infrastructure projects worth R3.1-billion, which were completed in the 2021/2022 year, and 18 projects, worth R7-billion, planned over the next few years. These will include upgrades to sections of the N2 highway, a key transport artery that intersects the province and links it to the Western Cape and KwaZulu-Natal.
Along with creating new infrastructure, rehabilitation road works to the value of R1.5-billion were rolled out in the last financial year, which have benefitted towns such as Middelburg, Steynsburg, Molteno, Dordrecht, Indwe and Nqanqarhu. More than 4 500 job opportunities were created, of which 2 020 benefitted youth and 1 076 women, said Premier Mabuyane.
Along with the investment into roads, there is also a R5.6-billion investment planned by Transnet to expand facilities at the East London Port.
These transport links are essential for the province’s economy, especially with its reliance on agriculture and manufacturing.
To enable the growth of the manufacturing sector, several investments have been announced for the province. These include an R1.4-billion investment into the Wild Coast Industrial Park in Mthatha, which will increase capacity in both the agricultural and manufacturing sectors.
In addition, R3.3-billion has been injected into the East London Industrial Development Zone (EL IDZ) – which is linked to the auto sector – and the EL IDZ is looking at deepening local content by localising the second and third-tier car components that are not currently in South Africa.
The Coega SEZ has recently been chosen by Hive Hydrogen SA as the location of a Green Hydrogen project which will be fully operational by 2026. This will see the construction of a R70-billion green ammonia plant. But two more investments are also planned for the SEZ: R362-million by Seraphim Solar Cell Manufacturing and R300 million African Port Logistics and Infrastructure.
In addition to investing in infrastructure to bolster the economy, the provincial government is also working to create a new smart city in the Eastern Cape. The African Coastal Smart City is in the planning stages, and will be located on the Wild Coast, said Premier Mabuyane.
The coastal smart city is expected to reduce unemployment in the area, promote tourism and help reverse some of the loss of skilled labour from the area. The development model, initially unveiled by President Cyril Ramaphosa, is a step towards creating new regional nodes that will attract investment and create opportunities for the surrounding communities.
President Ramaphosa said the development is essential under South Africa’s economic reconstruction and recovery plan and are likely to provide a much needed economic boost.
“This initiative is going to serve as a game-changer and a catalyst for further development and investment attraction throughout the Wild Coast. There are already investors who have expressed an interest in the area. To facilitate implementation on the Eastern Cape side of the programme, we have appointed Coega (Special Economic Zone) to package our projects,” said Premier Mabuyane.