| Economy of Western Cape | |
|---|---|
A panel from the frescoes in the Assembly Room, Mutual Building in Cape Town, painted by Le Roux Smith in 1942. The fresco illustrates the importance of agriculture and shipping to the economy of the Western Cape in the early half of the 20th century. |
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| Output | |
| Output | R 264.98 billion[1] US$ 33.88 billion |
| Output per capita | R 50,726 US$ 6,488 |
| Labor force | |
| Unemployment rate | 21.7% |
Main sectors as a proportion of GDP in 2009[2]
The Western Cape's total GDP for 2008 was R268.26bn, making the province the joint second largest contributor to the country’s total GDP, at 14.3%. It also has one of the fastest growing economies in the country, growing at 4% in 2008[3] and is expected to grow by 3.2% in 2011.[4] Close to 30% of the gross regional product comes from foreign trade.[5] At 19.7% the province has a substantially lower unemployment rate than the national average currently standing at 23.2% in 2009.[6] High-tech industries, international call centres, fashion design, advertising and TV production are niche industries rapidly gaining in importance.[7] The provinces top export destinations in 2008 were the United Kingdom and the Netherlands with exports growing at 18.83% per annum between 2006 and 2008.[3]
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The two pullers of the Cape Colony's economy until the Kimberley diamond strike of 1868 and the opening of the opening of the Suez Canal in 1869 were shipping and agriculture. Cape Town's strategic position as the halfway point between Europe and Asia meant that prior to the opening of the Suez Canal almost every ship involved in the spice trade between those two continents docked at Cape Town to revictulate. The supplying of these ships with fresh provisions, fruit, and wine provided a very large market for the surplus produce of the colony. By the late 1700s the Cape Colony was one of the best developed European settlements outside of Europe or the Americas.[8]
After the Suez Canal was constructed in 1869, Cape Town's importance as a refuelling point declined as the canal obviated the need to navigate the longer sea lane around the southern coast of Africa.
The biggest sector in the Western Cape's economy is the financial, business services and realestate sectors contributing approximately R77 billion in 2008.[3] A number of large financial companies were founded in the province and continue to maintain a significant presence in the provinces capital Cape Town. The largest such company being Old Mutual which was founded in Cape Town in 1845. Financial services group Sanlam Limited is headquartered in Cape Town where it was founded in 1918. Investment and wealth management firm Allan Gray is also headquartered in Cape Town.[9]
This finding [of Cape Town's entrepreneurship] suggests that Cape Town has a much higher level of knowledge, innovation and opportunity than elsewhere in the country.
- Dr Mike Herrington[10]
The city of Cape Town is ranked as the most entrepreneurial city in South Africa with Early-Stage Entrepreneurial Activity being 190% greater than South Africa’s national average.[10] In the future Cape Town plans to become a global design and innovation hub by focusing on industries and policies that support the design sector.[11] The design and advertising sectors are already the best developed in Africa. There has also been a substantial increase in the number of high-tech start-up companies in Cape Town and interest in developing intellectual property start-up companies, has also been expressed through communities such as the Silicon Cape Initiative.
Manufacturing was the second largest contributor to the Western Cape's economy valued at R43.7 billion in 2008. The province's manufacturing sector has proven to be more robust then the rest of the country as a large part of the manufacturing sector is made up of a food processing sector whose products have been in relatively constant demand.[3] The largest manufacturing industry in the province is the clothing and textile industry, which employs over 170,000 people. The textile industry is presently declining in importance, due to competition with cheaper Eastern producers, such as China. The Saldanha Steel mill in Saldanha is a major producer and exporter of hot-rolled carbon steel. Designed to produce 1,25 million tons of hot-rolled carbon steel coil per year. The petrochemical and plastics industry, furniture, printing, pharmaceuticals, and publishing are also significant industries.
Of increasing importance to the province's economy are the production of and research in information technology, telecommunications, medical equipment, research equipment and other hi-tech industries. The Capricorn Science and Industrial Park in the Cape Town suburb of Muizenberg is an important growth node of the hi-tech industry in the province.[5]
The province has grown a large tourism industry since 1994. The majority of international tourist visiting South Africa visit the province, with Cape Town, Garden Route and the Winelands being popular tourist destinations. In 2004, Cape Town was listed as one of the top five international tourist destinations.[12] Fifty percent of international tourists to South Africa visit the Western Cape. The province's overall share of South Africa's tourism sector by gross expenditure is 24 percent.[5]
There were 1,535,903 international arrivals in 2004 with continued growth annually. Annually 8 million tourists visit the province.[5] Domestic tourism is also on the rise, as low-cost air carriers such as Kulula and 1Time making travel more affordable to more South Africans.
Around 11,5 million hectare of land in the province is cultivated. Although this only represents 12.4% of the total land used for agriculture in South Africa the Western Cape produces 55% to 60% of South Africa’s agricultural exports, valued at more than R7 billion[13] (US$1 billion)[14] a year. The sector is also one of the fastest growing of the economy, expanding by 10.6% in 2008.[3] Key agricultural export products from the province include wine, wool, ostrich related products, essential oils and fruit.[13] Wheat and other cereals are extensively cultivated in the Swartland and Overberg districts of the province.[5]
For most of the province's history exports have been dominated by agricultural products (primarily fruit, sea food, vegetables, wine and brandy).[5]
The Western Cape region has been famous for its wine since the late 1700s and exports wine all over the world. In 2010 the Western Cape exported 374.8 million litres of wine.[15] With 100,200ha of vines under cultivation the province is the ninth largest exporter of wine in the world.[5] Distilled wine or brandy is produced in the area long the R62 around the towns of Worcester, Robertson, Barrydale, Calitzdorp and Oudtshoorn. Brandy is also produced around the towns of Paarl, Stellenbosch, Franschhoek, Wellington and Grabouw.[16] Brandy from these regions are regarded as amongst the best in the world.[17]
With 52,300ha of fruit trees under cultivation the province is also well known for its fruit and fruit related products. The vast majority of South Africa's pome (apples & pears) fruit and most of its stone fruit is grown in the province. Around 687,121 tons of apples and 345,296 tons of pears were exported in 2008. Ceres Fruit Juices originated in the town of Ceres and is a major exporter of fruit juices to North America, Europe, and Asia. Appletiser, a popular sparkling fruit juice, originated from and all production is based in the town of Elign. The major fruit growing regions of the province are Ceres, Grabouw, and Villiersdorp.[18]
Around 75% of all commercial fishing in South Africa takes place along the Western Cape's coastline. The provinces rich cold water fishing grounds are abundant in marine life. Marine life such as Spiny lobster (locally known as Crayfish), abalone, snoek, squid, octopus, oysters and mussels are extensively fished. The fishing of Spiny lobster and abalone is heavily regulated due to their high value and dwindling population due to extensive poaching.[5]
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