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Western Cape Government Provincial Treasury Municipal Economic Review and Outlook 2018 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] PR363/2018 ISBN: 978-0-621-46698-0 About the Municipal Economic Review and Outlook The Municipal Economic Review and Outlook (MERO) is an annual research publication produced by the Provincial Treasury of the Western Cape Government. The first edition of the MERO was published in 2012. It is aimed at informing policymakers at municipalities on key economic issues that affect policy, planning and budgeting. The overall aim of the MERO is to unpack regional development and sectors that feature in the Provincial Economic Review and Outlook (PERO) and other economic literature available to local policymakers across the Western Cape. This economic intelligence is to be achieved specifically by analysing factors that is driving broad sector developments. This allows an informed interpretation of development in the Province. Key objectives of the MERO include the identification of constraints and opportunities to development per municipal area; investigating the most appropriate avenues of escalating job-creating growth per municipal area; analysing factors affecting economic growth per municipal area and region; providing updated historical economic information; analysing sectoral developments and trends per municipal area and region; providing short to medium term sectoral forecasts; analysing of regional industry linkages; providing recent information about Small, Micro and Medium Enterprises per region; and analysing the impact of economic activity on households living standards using socio-economic indicators including the HDI, Gini coefficient and the poverty rate amongst others. The aim is to provide more recent information of the economic and sectoral environment, which in turn informs policy, planning and budgeting and responsive interventions required by policymakers for sustainable economic and human development. Foreword The primary aim of the Municipal Economic Review and Outlook (MERO) is to provide evidence-based research to inform policy, planning and budgeting to mitigate economic and fiscal risks. It also provides an opportunity to assess the collective impact of various government programmes on the well-being of society. The MERO compliments the Provincial Economic Review and Outlook by disaggregating the socio-economic intelligence at a municipal level. Municipalities, government departments, academic institutions and the private sector alike will use the MERO as a key policy indicator for research, planning, budgeting and implementation. The South African political and socio-economic landscape can best be described as Volatile, Uncertain, Complex and Ambiguous (VUCA). At a time where global economic growth projections are being revised upwards, South Africa is finding itself in a technical recession. Recent economic growth trends reveal that the modest economic recovery experienced by South Africa in 2017 is not likely to be sustained in 2018. Growth in the Western Cape will be muted in 2018 as a result of the drought. The bleak economic growth prospects combined with increasing unemployment and increased demand for public services will require innovative service delivery models. The 2018 MERO is a result of collaborative effort and I wish to extend the Provincial Treasury’s sincere gratitude to our partners in various provincial government departments and municipalities as well as the research team for their valuable contributions. Dr Ivan Meyer Minister of Finance Western Cape Government 27 September 2018 Contents SECTION A: BACKGROUND AND MACROECONOMIC CONTEXT 1 1. Introduction and background 1 2. Macroeconomic performance and outlook 2 3. Regional context 16 SECTION B: WESTERN CAPE REGIONS 35 Cape Metro 37 Chapter 1 Regional economic review and outlook 37 Chapter 2 Sectoral growth, employment and skills per planning district 59 Chapter 3 Agriculture overview 87 Chapter 4 Municipal infrastructure analysis 97 Chapter 5 Municipal socio-economic analysis 103 West Coast District 117 Chapter 1 Regional economic review and outlook 117 Chapter 2 Sectoral growth, employment and skills per municipal area 135 Chapter 3 Agriculture overview 155 Chapter 4 Municipal infrastructure analysis 165 Chapter 5 Municipal socio-economic analysis 181 Cape Winelands District 197 Chapter 1 Regional economic review and outlook 197 Chapter 2 Sectoral growth, employment and skills per municipal area 217 Chapter 3 Agriculture overview 239 Chapter 4 Municipal infrastructure analysis 249 Chapter 5 Municipal socio-economic analysis 265 i Municipal Economic Review and Outlook 2018 Overberg District 281 Chapter 1 Regional economic review and outlook 281 Chapter 2 Sectoral growth, employment and skills per municipal area 299 Chapter 3 Agriculture overview 315 Chapter 4 Municipal infrastructure analysis 325 Chapter 5 Municipal socio-economic analysis 339 Garden Route District 355 Chapter 1 Regional economic review and outlook 355 Chapter 2 Sectoral growth, employment and skills per municipal area 377 Chapter 3 Agriculture overview 405 Chapter 4 Municipal infrastructure analysis 415 Chapter 5 Municipal socio-economic analysis 437 Central Karoo District 455 Chapter 1 Regional economic review and outlook 455 Chapter 2 Sectoral growth, employment and skills per municipal area 471 Chapter 3 Agriculture overview 481 Chapter 4 Municipal infrastructure analysis 489 Chapter 5 Municipal socio-economic analysis 501 References 517 ii Municipal Economic Review and Outlook 2018 Acronyms AIDS Acquired Immunodeficiency Syndrome ARC Agriculture Research Council ASR Age-standardised mortality rate BCI Business Confidence Index BER Bureau for Economic Research BFAP Bureau of Food and Agriculture Policy BLS Bureau of Labour Statistics BoE Bank of England BPESA Business Process Enabling South Africa BPO Business Process Outsourcing BRICS Brazil, Russia, India and South Africa CBD Central Business District CCA Customs Controlled Area CDC Childhood Development Centre CIPC Companies and Intellectual Property Commission CKD Central Karoo District COPD Chronic Obstructive Pulmonary Disease CPI Consumer Price Index CRR Capital Replacement Reserve CSD Central Supplier Database CWD Cape Winelands District DAFF Department of Agriculture, Forestry and Fishing DBSA Development Bank of Southern Africa DEDT Department of Economic Development and Tourism DOA Department of Agriculture DRDLR Department of Rural Development and Land Reform the dti Department of Trade and Industry DUI Driving under influence ECB European Central Bank ECD Early Childhood Development EU European Union iii Municipal Economic Review and Outlook 2018 FDI Foreign Direct Investment Fed US Federal Reserve Bank FOMC Federal Open Market Committee FPSU Farmer Production Support Unit GDP Gross Domestic Product GDPR Gross Domestic Product per Region GRI Gestamp Renewable Industries GTL Gas-to-Liquid GVA Gross Value Added ha hectare HDI Human Development Index HIV Human Immunodeficiency Virus HRM Human Resource Management ICT Information and Communications Technology IDP Integrated Development Plan IDZ Industrial Development Zone ifo Information and Forschung IMF International Monetary Fund INEP Integrated National Electrification Grant IT Information Technology KKNK Klein Karoo Arts Festival LED Local Economic Development MERO Municipal Economic Review and Outlook MIG Municipal Infrastructure Grant MTEF Medium Term Expenditure Framework MTM Marine Transport and Manufacturing MTREF Medium Term Revenue and Expenditure Framework NDP National Development Plan NT National Treasury NUSP National Upgrading Support Programme OBD Overberg District ODTP Organisational Development and Transformation Plan OG Oil and Gas Exploration iv Municipal Economic Review and Outlook 2018 OSSB Offshore Supply Base PHA Philippi Horticultural Area PMI Purchasing Managers Index PRMG Provincial Roads Maintenance Grant PSG Provincial Strategic Goal PWC Price Waterhouse Coopers QE Quantitative Easing REIPPPP Renewable Energy Independent Power Producer Procurement Programme RMB Rand Merchant Bank RUMC Rural Urban Market Centre SA South Africa SAB South African Breweries SAFEX South African Futures Exchange SAHTA South African Honeybush Tea Association SAMSA South African Maritime Safety Authority SANParks South African National Parks SANRAL South African National Roads Agency SARS South African Revenue Services SAWIS SA Wine Industry Information and Systems SBIDZ Saldanha Bay Industrial Development Zone SDF Spatial Development Framework SEDA Small Enterprises Development Agency SEZ Special Economic Zone SIC Standard Industry Classification SMME Small, Medium and Micro-Sized Enterprises SOE State-Owned Enterprises S&P Standard and Poor Rating Agency Stats SA Statistics South Africa TB Tuberculosis TCT Transport for Cape Town (Cape Town Transport Authority) TNPA Transnet National Port Authority UK United Kingdom v Municipal Economic Review and Outlook 2018 UNESCO United Nations Education, Scientific and Cultural Organisation US United States USD US Dollar VAT Value Added Tax WC Western Cape WCBDC West Coast Business Development Centre WCD West Coast District WCDOA Western Cape Department of Agriculture WCG Western Cape Government WHO World Health Organisation WMA Water Management
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