Cape’s economic output looks bleak

The food poverty line has increased to 10% in the province

THE ECONOMIC outlook for the Western Cape looks bleak with the persistent drought compounding the province’s woes. Finance MEC Ivan Meyer tabled the provincial and municipal economic outlook for the province and painted a grim picture.

According to the report, poverty increased in the province between 2011 and 2015. The upper poverty line increased from 33.7% in 2011 to 37.1% in 2015.

The food poverty line also increased sharply from 6.9% in 2011 to 10% in 2015.

The demand for social assistance in the Western Cape grew by its largest margin between 2015 and 2017.

“Grant aid beneficiaries grew at around 15% of the total social grants. These are

targeted at providing resources for older persons, war veterans and disabled persons. In 2017, about 65% of grant beneficiaries received grants for child support, followed by the older person’s grant at just over 21%,” the report read.

The Gini coefficient, a measurement of the income inequality ranging from 0 to 1 where 0 is a perfectly equal society and a value of 1 represents a perfectly unequal society, deteriorated between 2011 and 2016.

The City of Cape Town consistently experienced the highest increase from 0.608 in 2010 to 0.614 in 2016. The Gini co-efficient for the province increased from 0.599 in 2010 to 0.609 in 2016.

Carol Beerwinkel, ANC MPL and spokesperson on finance, said: “It is what one can expect when consultants, and not the people who are required, do it. Agri-processing is one of the fasting-growing sectors, but it is water dependant and we have a drought at the moment.

“How are we going to deal with that. No plan was given.

“The biggest unemployment is under African (30.3%) coloureds (19.6%). Unemployed whites account for 6.4% of the working population. Still there are more females unemployed.”

Despite the social challenges, Meyer said estimated economic growth for the Western Cape is at 0.8% for 2016 while output in the province could rise by only 0.5% in 2017 before a more meaningful improvement of 1% in 2018.

“The persistent drought conditions being faced by the Western Cape will affect the agricultural sector together with the rest of the value chain.

“The impact of the water crisis on the Western Cape economy is likely to be significant, both directly on businesses and through their supply chains.

“Further to this, additional negative effects in the form of employment losses and lower exports are expected.”

The Western Cape’s unemployment rate was 20.7% translating to about 628 000 individuals unemployed in the second quarter of 2017.

Both child and institutional maternal mortality had declined between 2015/16 and 2016/17.

The 2017 Municipal Economic Review and Outlook highlighted the City of Cape Town’s 72% contribution to the GDP.

Cape Winelands contributes (11.4%) followed by Eden (7.6%), West Coast (5.1%), Overberg (3.5%) and Central Karoo District (0.5%).