The Eastern Cape economy is in recession after contracting for the third consecutive quarter, with unemployment hovering at 42%. This is a concerning trend, given the province’s enormous potential.

General manufacturing is a significant part of the provincial economy, primarily driven by the automotive sector, the largest manufacturing sector in the Eastern Cape. The province hosts four of the seven Original Equipment Manufacturers (OEMs) operating in South Africa and up to 100 major component manufacturers. Nelson Mandela Bay alone accounts for 45% of local vehicle production and provides 51% of South Africa’s vehicle exports, with over 100 000 vehicles shipped annually through the Port of Port Elizabeth.

The Eastern Cape is also the country’s second-largest citrus-producing province after Limpopo, contributing 25% of the province’s GDP with 24 508 hectares under production. The Eastern Cape is the fifth-largest exporter of lemons in the world and produces soft citrus fruits such as mandarins, oranges, and grapefruit. Additionally, the province hosts the largest percentage of the country’s livestock, producing 30% of the country’s milk, 36% of its wool, and 75% of its mohair, with 70% of the mohair exported to Italy and China.

While the province boasts a wealth of skills, products, and opportunities, there is a significant misalignment between opportunity and productivity. The three main contributors to the negative growth—mining, construction, and manufacturing—raise the big question: why?

The new MEC for Economic Development, Environmental Affairs and Tourism faces a challenging task. An economy cannot develop if the rail and road infrastructure is not maintained and if our ports are not operating at world class efficiency levels. Corruption in tender and procurement processes must be investigated and eliminated.

Road maintenance, fixing traffic lights, prosecuting cable thieves, and replacing streetlights are crucial for safety and functionality. In addition, poor road markings and dilapidated overhead signage pose significant safety risks and hinder tourism prospects. This highlights the need for provincial government and local municipalities to collaborate effectively to promote growth.

To combat unemployment, the provincial government should expedite infrastructure projects, such as building roads and railways. Fortunately, the N2 Wild Coast Road construction project, which has faced numerous delays, is now progressing. However, for substantial growth to occur, the Eastern Cape government needs to revamp itself and foster an environment conducive to investment and tourism. Without these changes, growth will remain sluggish despite the available opportunities.

The Exporters Eastern Cape, which represents most major sectors in the province, continues to work closely with all structures facilitating collaboration and investment and promoting exports. We commend the two business chambers for facilitating business in the province. The Nelson Mandela Bay Business Chamber is aggressively working to create an enabling environment for business in Nelson Mandela Bay. These efforts are essential, but government cooperation is crucial to retain and grow future investments.

Quintin Levey, Exporters Eastern Cape Chairman

The Herald – Let’s Talk Exports – Published July 2024