NEWS: Infrastructure backlog, waning service delivery driving people to cities

There is a massive infrastructure backlog in historic labour-sending regions, or former homelands, and the share of households with piped water inside the house has declined in the Free State, North West, Mpumalanga and Limpopo since 1994, reflecting waning service delivery in these provinces.

Consequently, infrastructure backlogs have resulted in a massive migration to major cities, especially around Gauteng, said policy research institution Trade and Industrial Policies Strategies (TIPS).

Gauteng has seen the most rapid increase in population, with its share of the national population having increased from 19% in 1994 to 26% in 2021. In contrast, the Eastern Cape has seen the slowest growth, with its share of the national population declining from 16% in 1994 to 11% in 2021.

Meanwhile, Gauteng and Western Cape have high employment levels compared with the national average. In 2021, 47% of the working-age population in the Western Cape was employed, while in Gauteng, the absorption rate was 42%.

In contrast, the Eastern Cape has high levels of joblessness, with 29% of the working-age population employed compared with the national average of 37%.

Further, the pandemic reduced employment across all provinces except in the Free State.

"Employment data sheds further light on the structure of the provincial economies. Notably, Gauteng, the Western Cape and KwaZulu-Natal account for 73% of national employment in manufacturing.

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Mining employment is more concentrated in North West, Limpopo and Mpumalanga. North West alone accounts for 34% of total employment in mining.

"In addition, employment in services is more concentrated in Gauteng, KwaZulu-Natal and the Western Cape," TIPS said in its 'Real Economy Bulletin Provincial Review 2022' report.

Production in South Africa is centred on a few provinces. In 2021, Gauteng remained the largest provincial economy, accounting for one-third of the national gross domestic product (GDP) and more than one-quarter of the national population.

KwaZulu-Natal is the second largest economy, accounting for 16% of the national GDP and 19% of the total population, followed by the Western Cape, which accounted for 14% of the national GDP and 12% of the total population. The Eastern Cape contributed 8% to the national GDP and the Northern Cape contributed 2% to the national GDP.

Notably, Gauteng experienced the most significant decline in the share of national GDP over the past two years, declining by 0.6%, followed by KwaZulu-Natal and the Western Cape, with both declining 0.4%.

However, Gauteng was also the fastest-growing economy between 2015 and 2019, growing at a yearly average of 1.3%, followed by Limpopo at 1.2% and KwaZulu-Natal and the Western Cape both with 1.1% growth over this period.

Covid-19 affected the growth of all provinces in 2020 except for the Northern Cape. Provinces with large mining sectors experienced a sharp recovery from Covid-19. This is attributable to the commodity price surges in 2021, TIPS noted.

Further, the contribution to the real economy by province varies substantially. Manufacturing is dominant in the three largest provinces, namely Gauteng, KwaZulu-Natal and the Western Cape. Together, these provinces account for 76% of national manufacturing. Gauteng makes up the largest share of manufacturing output.

Mining, meanwhile, is largely concentrated in North West, Limpopo, Mpumalanga and the Northern Cape, which together account for 74% of national mining output. Mining alone in the North West accounts for one-third of the provincial output while, in Limpopo, mining contributes 30% of provincial output.

Agriculture is more concentrated in KwaZulu-Natal, the Western Cape and Free State.

This hardhatNEWS article was first published in Engineering News