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Municipal Economic Review and Outlook 2016

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Municipal Economic Review and Outlook 2016 Western Cape Government Provincial Treasury Municipal Economic Review and Outlook 2016 Provincial Treasury Local Government Budget Office Private Bag X9165 7 Wale Street Cape Town tel: +27 21 483 3386 fax: +27 21 483 4680 www.westerncape.gov.za Afrikaans and isiXhosa versions of this publication are available on request. Email: [email protected] PR298/2016 ISBN: 978-0-621-44870-2 Foreword This is the fifth edition of the Municipal Economic Review and Outlook (MERO) since its inception in 2012. The MERO continues to provide valuable evidenced-based research to municipalities within the Western Cape in support of enhanced planning for economic growth, job creation and socio-economic upliftment. The MERO compliments the Provincial Economic Review and Outlook and as a toolkit it enables decision-making for municipalities, government departments, public entities, businesses as well as national and international organisations interested in investing in the Western Cape. The 2016 MERO will thus assist Executive Mayors, Councillors, Municipal Managers, officials, business chambers, IGR Forums, local stakeholder organisations and future investors in making informed decisions and to exercise policy choices that is backed up with evidence-based research. Both these publications aim to improve our understanding of the Western Cape economy at a sub-regional level to facilitate provincial and municipal policy formulation, alignment, integrated planning and budgeting. The municipal and provincial economic outlook remains fragile and is extremely vulnerable to any further international and domestic shocks. Stubbornly high unemployment rates, coupled with increasing population pressures linked to service delivery demands and socio-economic dynamics related to youth, gender and race remain key challenges in the Western Cape. Other domestic constraints impacting on the economic outlook relate to energy, water, food security, infrastructure and skills shortages; while outcomes related to education, health and broader social ills continue to impact on and are affected by the levels of economic development. These economic pressures highlight the fundamental need for thorough integrated development planning, considered decision-making, active economic transformation and appropriate policy responses which will in turn stimulate economic and human development. The MERO’s research findings are therefore of particular relevance given that municipalities will adopt their fourth generation Integrated Development Plans in May 2017, which will be key to facilitate sustainability, ensure the effective use of resources, improved service delivery, attract additional funding, harness democratic values and to promote inter-governmental cooperation. Municipal Economic Review and Outlook 2016 The detailed analysis and overview of the unique comparative advantages and opposing challenges faced by municipalities which are each differently influenced by external economic pressures emphasise the need for innovation and entrepreneurship to achieve inclusive growth. Lastly, I wish to express a sincere word of appreciation to my colleagues and officials from the various provincial government sector departments, municipal officials and the research team for their valuable contributions and inputs. We will continue working with our partners and key stakeholders particularly those working on planning and budgeting in the municipal space to support evidence-based decision-making in the building of an environment conducive to economic growth and employment creation. Dr Ivan Meyer Minister of Finance Western Cape Government 30 September 2016 Contents SECTION A: BACKGROUND AND MACROECONOMIC CONTEXT 1 1. Introduction and background 1 2. Macroeconomic outlook 2 3. Background to main sub-sections 23 SECTION B: WESTERN CAPE REGIONS 45 City of Cape Town Metropolitan Municipality 47 Chapter 1: Regional economic review and outlook 47 Chapter 2: Sectoral growth, employment and skills per planning district 63 Chapter 3: Value chains 91 Chapter 4: Infrastructure spending - review and analysis 115 Chapter 5: Municipal socio-economic analysis 125 West Coast District 139 Chapter 1: Regional economic review and outlook 139 Chapter 2: Sectoral growth, employment and skills per municipal area 153 Chapter 3: Value chains 171 Chapter 4: Infrastructure spending - review and analysis 187 Chapter 5: Municipal socio-economic analysis 203 Cape Winelands District 219 Chapter 1: Regional economic review and outlook 219 Chapter 2: Sectoral growth, employment and skills per municipal area 233 Chapter 3: Value chains 251 Chapter 4: Infrastructure spending - review and analysis 267 Chapter 5: Municipal socio-economic analysis 283 i Municipal Economic Review and Outlook 2016 Overberg District 301 Chapter 1: Regional economic review and outlook 301 Chapter 2: Sectoral growth, employment and skills per municipal area 315 Chapter 3: Value chains 329 Chapter 4: Infrastructure spending - review and analysis 343 Chapter 5: Municipal socio-economic analysis 357 Eden District 373 Chapter 1: Regional economic review and outlook 373 Chapter 2: Sectoral growth, employment and skills per municipal area 389 Chapter 3: Value chains 417 Chapter 4: Infrastructure spending - review and analysis 433 Chapter 5: Municipal socio-economic analysis 457 Central Karoo District 475 Chapter 1: Regional economic review and outlook 475 Chapter 2: Sectoral growth, employment and skills per municipal area 489 Chapter 3: Value chains 499 Chapter 4: Infrastructure spending - review and analysis 513 Chapter 5: Municipal socio-economic analysis 523 References 539 ii Municipal Economic Review and Outlook 2016 Acronyms ABT Alternative Building Technology AFASA African Farmers' Association of South Africa AH Agri-Hub AP Agri-park ART Anti-Retroviral Treatment ASA Animation South Africa ASNAPP Agribusiness in Sustainable Natural African Plant Products BBBEE Broad-Based Black Economic Empowerment BER Bureau of Economic Research BCI Business Confidence Index BNG Breaking New Ground BPO Business Process Outsourcing BPO&O Business Process Outsourcing & Off Shoring Casidra Cape Agency for Sustainable Integrated Development in Rural Areas CASP Comprehensive Agricultural Support Programme CBD Central Business District CCA Customs Controlled Area CCI Consumer Confidence Index CCID Central City Improvement District CFR Cape Floristic Region CIPC Companies and Intellectual Property Commission CIS Commonwealth of Independent States COGTA Department of Cooperative Governance and Traditional Affairs CPI Consumer Price Index CRM Customer Relations Management CSP Concentrated Solar Power CT Cape Town DAC Department of Arts and Culture DAFF Department of Agriculture, Forestry and Fishing DBSA Development Bank of South Africa DEDAT Department of Economic Development and Tourism iii Municipal Economic Review and Outlook 2016 DRC Democratic Republic of Congo the dti Department of Trade and Industry ED Enterprise Development EFTA European Free Trade Area EIA Environmental Impact Assessment EIFF Eden Independent Film Festival EIP Enterprise Investment Programme EPA Economic Partnership Agreement ERM Enterprise Resource Management ETI Employment Tax Incentive EU European Union FDI Foreign Direct Investment FPSU Farmer Production Support Unit FSA Food Safety Assessment FSD Farmer Support and Development GDP Gross Domestic Product GDPe Expenditure on GDP GDPp GDP Production GDS Global Distribution Systems GGP Gross Geographic Product GIS Geographic Information System GMO Genetically Modified Organism GOSA Grain Handling Organisation of Southern Africa GVA Gross Value Added ha hectare HDI Human Development Index HRM Human Resource Management ICT Information and Communications Technology IDC Industrial Development Corporation IDP Integrated Development Plan IDZ Industrial Development Zone IMF International Monetary Fund IPW Integrated Production of Wine iv Municipal Economic Review and Outlook 2016 IRT Integrated Rapid Transit ITO Information Technology Outsourcing KPI Key Performance Area KPO Knowledge Processing Outsourcing LED Local Economic Development LPO Legal Process Outsourcing LSFB Light Steel Frame Building Construction Method LQ Locational Quotient MERO Municipal Economic Review and Outlook MFMA Municipal Finance Management Act No. 56 of 2003 MIG Municipal Infrastructure Grant MOU Memorandum of Understanding NDP National Development Plan NEO National Executive Officer NHBRC National Home Builders’ Registration Council OECD Organisation for Economic Co-operation and Development PDO Protected Designation of Product of Origin PGI Protected Geographic Indication PMI Purchasing Managers Index PV Photovoltaic q-o-q Quarter-on-Quarter QCTO Quality Council for Trade and Occupations QMS Quality Management System R&D Research and Development REIPPPP Renewable Energy Independent Power Producer Procurement Programme RUMC Rural Urban Marketing Centre SA South Africa SABS South African Bureau of Standards SACU Southern African Customs Union SADC Southern African Development Community SALT Southern African Large Telescope SAQA South African Qualifications Authority v Municipal Economic Review and Outlook 2016 SARB South African Reserve Bank SARETEC South African Renewable Energy Technology Centre SARS South African Revenue Service SATSA Southern Africa Tourism Services Association SAWIS SA Wine Industry Information & Systems SBIDZ Saldanha Bay Industrial Development Zone SDF Spatial Development Plan SEDA Small Enterprise Development Agency SEZ Special
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