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Why Invest

THE NORTHERN CAPE is unique as a trade and investment destination, its vast geographical extent and natural resources, complemented by human capacity and sound infrastructure, offering its partners a wide array of attractive trade and investment opportunities meeting global standards. The geographic location of Northern Cape provides easy access to SADC markets and export ports via sea and air. The entry points in terms of access to Namibia and Botswana, extending to Zambia, provide a unique competitive advantage. The mineral profile of the Northern Cape has contributed to the establishment of global trade centres such as London and New York through diamond resources and mining listings. In addition to being for many years the leading source of diamonds, the province is a key iron ore and manganese producer, which is complemented by lime, granite, semi-precious stones and other minerals. The mining sector continues to expand, and with it opportunities in mining supplies and mineral value addition. The South African government has prioritised the diversification of energy sources to supply the national grid, and the focus on renewable energy has stimulated the demand for solar, wind, hydro and biomass energy sources.

No province is better equipped in these fields than the Northern Cape, which has become the preferred investment destination for renewable energy companies. Growth in the energy sector has stimulated the manufacturing and agricultural sectors, which in turn has stimulated the development of infrastructure and services. Key projects include the Boegoebaai deep-sea port, Kathu Industrial Park, Upington Industrial Park and Vioolsdrif Dam. These projects are complemented by a well-developed settlement, transport and communication network. Huge opportunities also exist in value addition to the Northern Cape's agricultural and mineral resources. Human capital is key to the sustainable development of any region, and the Northern Cape boasts the newly established Sol Plaatje University and enjoys representation through technology stations of other universities including Unisa and the Vaal University of Technology. The province is also served by a well-established multi-campus Technical Education and Vocational Training College. Provincial and local government organs in the Northern Cape underpin all the potential of the province, and are dedicated to ensuring a sound, safe and well-governed investment destination.

NC Economic Overview

1.       Economy

The economic state of Northern Cape Province is put in perspective by comparing it on a spatial level with its neighbouring provinces and South Africa. The section will also elude to the economic composition and contribution of the municipalities within Northern Cape Province.

The Northern Cape Province does not function in isolation from South Africa and the world and now, more than ever, it is crucial to have reliable information on its economy for effective planning. Information is needed that will empower the municipality to plan and implement policies that will encourage the social development and economic growth of the people and industries in the municipality respectively.

1.1       Gross Domestic Product by Region (GDP-R)

The Gross Domestic Product (GDP), an important indicator of economic performance, is used to compare economies and economic states.

  • Gross Domestic Product by Region (GDP-R) represents the value of all goods and services produced within a region, over a period of one year, plus taxes and minus subsidies.

GDP-R can be measured using either current or constant prices, where the current prices measures the economy in actual Rand, and constant prices measures the economy by removing the effect of inflation, and therefore captures the real growth in volumes, as if prices were fixed in a given base year.

  • Gross Domestic Product (GDP) - Northern Cape and National Total, 2008-2018 [R billions, Current prices]

 

Northern Cape

National Total

Northern Cape as % of national

2008

54.7

2,369.1

2.3%

2009

54.4

2,507.7

2.2%

2010

60.1

2,748.0

2.2%

2011

64.0

3,023.7

2.1%

2012

68.2

3,253.9

2.1%

2013

72.6

3,540.0

2.0%

2014

83.5

3,805.3

2.2%

2015

86.2

4,049.9

2.1%

2016

90.4

4,359.1

2.1%

2017

96.5

4,653.6

2.1%

2018

98.6

4,873.9

2.0%

Source: IHS Markit Regional eXplorer version 1870

With a GDP of R 98.6 billion in 2018 (up from R 54.7 billion in 2008), the Northern Cape Province contributed 2.02% to the South Africa GDP of R 4.87 trillion in 2018 increasing in the share of the National Total from 2.31% in 2008.It's contribution to the national economy stayed similar in importance from 2008 when it contributed 2.31% to South Africa, but it is lower than the peak of 2.31% in 2008.

  • Gross Domestic Product (GDP) - Northern Cape and National Total, 2008-2018 [Annual percentage change, Constant 2010 prices]

 

Northern Cape

National Total

2008

1.7%

3.2%

2009

-2.3%

-1.5%

2010

2.2%

3.0%

2011

2.0%

3.3%

2012

3.2%

2.2%

2013

2.4%

2.5%

2014

3.0%

1.8%

2015

1.1%

1.2%

2016

-1.2%

0.4%

2017

2.8%

1.4%

2018

-0.3%

0.8%

Average Annual growth
20082018

1.28%

1.50%

Source: IHS Markit Regional eXplorer version 1870

In 2018, the Northern Cape Province achieved an annual growth rate of -0.30% which is a significant lower growth rate than the of South Africa as a whole, where the 2018 GDP growth rate was 0.79%. Contrary to the short-term growth rate of 2018, the longer-term average growth rate for Northern Cape (1.28%) is slightly lower than that of South Africa (1.50%). The economic growth in Northern Cape peaked in 2012 at 3.23%.

  • Gross Domestic Product (GDP) - Northern Cape Province and the rest of National Total, 2018 [Percentage]

The Northern Cape Province had a total GDP of R 98.6 billion and in terms of total contribution towards South Africa the Northern Cape Province ranked lowest relative to all the regional economies to total South Africa GDP. This ranking in terms of size compared to other regions of Northern Cape remained the same since 2008. In terms of its share, it was in 2018 (2.0%) slightly smaller compared to what it was in 2008 (2.3%).  For the period 2008 to 2018, the average annual growth rate of 1.3% of Northern Cape was the fourth relative to its peers in terms of growth in constant 2010 prices.

  • Gross Domestic Product (GDP) - district municipalities of Northern Cape Province, 2008 to 2018, share and growth

 

2018
(Current prices)

Share of province

2008
(Constant prices)

2018
(Constant prices)

Average Annual growth

Namakwa

10.65

10.79%

7.28

7.54

0.35%

Pixley ka Seme

12.23

12.40%

7.39

7.81

0.56%

ZF Mgcawu

24.11

24.44%

13.89

16.94

2.00%

Frances Baard

35.79

36.28%

22.22

22.63

0.18%

John Taolo Gaetsewe

15.86

16.08%

9.38

13.38

3.62%

Northern Cape

98.63

 

60.16

68.30

 

Source: IHS Markit Regional eXplorer version 1870

John Taolo Gaetsewe had the highest average annual economic growth, averaging 3.62% between 2008 and 2018, when compared to the rest of the regions within the Northern Cape Province. The ZF Mgcawu District Municipality  had the second highest average annual growth rate of 2.00%. Frances Baard District Municipality had the lowest average annual growth rate of 0.18% between 2008 and 2018.

  • GDP contribution - district municipalities of Northern Cape Province, 2018 [Current prices, percentage]

The greatest contributor to the Northern Cape Province economy is the Frances Baard District Municipality with a share of 36.28% or R 35.8 billion, increasing from R 19.9 billion in 2008. The economy with the lowest contribution is the Namakwa District Municipality with R 10.6 billion growing from R 6.49 billion in 2008.

1.1.1        Economic Growth Forecast

It is expected that Northern Cape Province's GDP will grow at an average annual rate of -0.09% from 2018 to 2023. South Africa as a whole is forecasted to grow at an average annual growth rate of 1.04%, which is higher than that of the Northern Cape Province.

  • Gross Domestic Product (GDP) - Northern Cape and National Total, 2008-2023 [Average annual growth rate, constant 2010 prices]

In 2023, Northern Cape's forecasted GDP will be an estimated R 68 billion (constant 2010 prices) or 2.1% of the total GDP of South Africa. The ranking in terms of size of the Northern Cape Province will remain the same between 2018 and 2023, with a contribution to the South Africa GDP of 2.1% in 2023 compared to the 2.2% in 2018. At a -0.09% average annual GDP growth rate between 2018 and 2023, Northern Cape ranked the lowest compared to the other regional economies.

  • Gross Domestic Product (GDP) - district municipalities of Northern Cape Province, 2018 to 2023, share and growth

 

2023
(Current prices)

Share of province

2018
(Constant prices)

2023
(Constant prices)

Average Annual growth

Namakwa

12.96

10.66%

7.54

7.40

-0.35%

Pixley ka Seme

15.39

12.66%

7.81

7.73

-0.21%

ZF Mgcawu

28.90

23.78%

16.94

16.07

-1.05%

Frances Baard

43.01

35.38%

22.63

21.68

-0.85%

John Taolo Gaetsewe

21.29

17.52%

13.38

15.11

2.46%

Northern Cape

121.55

 

68.30

67.99

 

Source: IHS Markit Regional eXplorer version 1870

When looking at the regions within the Northern Cape Province it is expected that from 2018 to 2023 the John Taolo Gaetsewe District Municipality will achieve the highest average annual growth rate of 2.46%. The region that is expected to achieve the second highest average annual growth rate is that of Pixley ka Seme District Municipality, averaging -0.21% between 2018 and 2023. On the other hand the region that performed the poorest relative to the other regions within Northern Cape Province was the ZF Mgcawu District Municipality with an average annual growth rate of -1.05%.

1.2       Gross Value Added by Region (GVA-R)

The Northern Cape Province's economy is made up of various industries.  The GVA-R variable provides a sector breakdown, where each sector is measured in terms of its value added produced in the local economy.

  • Gross Value Added (GVA) is a measure of output (total production) of a region in terms of the value that was created within that region. GVA can be broken down into various production sectors.

The summary table below puts the Gross Value Added (GVA) of all the regions in perspective to that of the Northern Cape Province.

  • Gross Value Added (GVA) by broad economic sector - Northern Cape Province, 2018 [R billions, current prices]

 

Northern Cape

National Total

Northern Cape as % of national

Agriculture

6.4

106.1

6.0%

Mining

19.4

350.9

5.5%

Manufacturing

3.0

572.9

0.5%

Electricity

3.3

166.0

2.0%

Construction

2.8

170.3

1.6%

Trade

10.5

652.7

1.6%

Transport

10.7

426.7

2.5%

Finance

11.9

854.4

1.4%

Community services

20.4

1,041.3

2.0%

Total Industries

88.5

4,341.3

2.0%

Source: IHS Markit Regional eXplorer version 1870

In 2018, the community services sector is the largest within Northern Cape Province accounting for R 20.4 billion or 23.1% of the total GVA in the province's economy. The sector that contributes the second most to the GVA of the Northern Cape Province is the mining sector at 22.0%, followed by the finance sector with 13.4%. The sector that contributes the least to the economy of Northern Cape Province is the construction sector with a contribution of R 2.8 billion or 3.16% of the total GVA.

  • Gross Value Added (GVA) by broad economic sector - Northern Cape Province, 2018 [percentage composition]

The community sector, which includes the government services, is generally a large contributor towards GVA in smaller and more rural local municipalities. When looking at the regions within the province, the Frances Baard District Municipality made the largest contribution to the community services sector at 45.04% of the province.  As a whole, the Frances Baard District Municipality contributed R 31.7 billion or 35.80% to the GVA of the Northern Cape Province, making it the largest contributor to the overall GVA of the Northern Cape Province.

  • Gross Value Added (GVA) by broad economic sector - district municipalities of Northern Cape Province, 2018 [percentage composition]

1.2.1        Historical Economic Growth

For the period 2018 and 2008, the GVA in the finance sector had the highest average annual growth rate in Northern Cape at 1.96%. The industry with the second highest average annual growth rate is the construction sector averaging at 1.88% per year. The electricity sector had an average annual growth rate of 0.20%, while the agriculture sector had the lowest average annual growth of 0.01%. Overall a negative growth existed for all the industries in 2018 with an annual growth rate of -0.23% since 2017.

  • Gross Value Added (GVA) by broad economic sector - Northern Cape Province, 2008, 2013 and 2018 [R billions, 2010 constant prices]

 

2008

2013

2018

Average Annual growth

Agriculture

4.41

4.17

4.42

0.01%

Mining

15.04

16.57

17.68

1.63%

Manufacturing

1.90

1.99

2.01

0.56%

Electricity

1.78

1.82

1.82

0.20%

Construction

1.29

1.50

1.55

1.88%

Trade

6.85

7.18

7.24

0.56%

Transport

5.41

5.74

6.12

1.24%

Finance

7.24

7.84

8.78

1.96%

Community services

10.50

11.84

12.48

1.74%

Total Industries

54.43

58.63

62.11

1.33%

Source: IHS Markit Regional eXplorer version 1870

The tertiary sector contributes the most to the Gross Value Added within the Northern Cape Province at 60.5%. This is slightly lower than the national economy (68.5%). The primary sector contributed a total of 29.2% (ranking second), while the secondary sector contributed the least at 10.3%.

  • Gross Value Added (GVA) by aggregate economic sector - Northern Cape Province, 2018 [percentage]

The following is a breakdown of the Gross Value Added (GVA) by aggregated sector:

1.2.1.1       Primary Sector

The primary sector consists of two broad economic sectors namely the mining and the agricultural sector. The following chart represents the average growth rate in the GVA for both of these sectors in Northern Cape Province from 2008 to 2018.

  • Gross Value Added (GVA) by primary sector - Northern Cape, 2008-2018 [Annual percentage change]

Between 2008 and 2018, the agriculture sector experienced the highest positive growth in 2008 with an average growth rate of 13.7%. The mining sector reached its highest point of growth of 7.1% in 2017. The agricultural sector experienced the lowest growth for the period during 2011 at -11.6%, while the mining sector reaching its lowest point of growth in 2008 at -5.8%. Both the agriculture and mining sectors are generally characterised by volatility in growth over the period.

1.2.1.2       Secondary Sector

The secondary sector consists of three broad economic sectors namely the manufacturing, electricity and the construction sector. The following chart represents the average growth rates in the GVA for these sectors in Northern Cape Province from 2008 to 2018.

  • Gross Value Added (GVA) by secondary sector - Northern Cape, 2008-2018 [Annual percentage change]

Between 2008 and 2018, the manufacturing sector experienced the highest positive growth in 2010 with a growth rate of 6.9%. The construction sector reached its highest growth in 2009 at 13.2%. The manufacturing sector experienced its lowest growth in 2010 of -6.0%, while construction sector reached its lowest point of growth in 2010 a with -2.4% growth rate. The electricity sector experienced the highest growth in 2018 at 1.6%, while it recorded the lowest growth of -1.1% in 2016.

1.2.1.3       Tertiary Sector

The tertiary sector consists of four broad economic sectors namely the trade, transport, finance and the community services sector. The following chart represents the average growth rates in the GVA for these sectors in Northern Cape Province from 2008 to 2018.

  • Gross Value Added (GVA) by tertiary sector - Northern Cape, 2008-2018 [Annual percentage change]

The trade sector experienced the highest positive growth in 2011 with a growth rate of 4.3%.  It is evident for the transport sector that the highest positive growth rate also existed in 2011 at 2.9% which is lower than that of the manufacturing sector.  The finance sector experienced the highest growth rate in 2015 when it grew by 4.9% and recorded the lowest growth rate in 2010 at -0.6%. The Trade sector had the lowest growth rate in 2009 at -5.1%. The community services sector, which largely consists of government, experienced its highest positive growth in 2008 with 5.6% and the lowest growth rate in 2016 with -0.4%.

1.2.2        Sector Growth forecast

The GVA forecasts are based on forecasted growth rates derived from two sources: historical growth rate estimates and national level industry forecasts. The projections are therefore partly based on the notion that regions that have performed well in the recent past are likely to continue performing well (and vice versa) and partly on the notion that those regions that have prominent sectors that are forecast to grow rapidly in the national economy (e.g. finance and telecommunications) are likely to perform well (and vice versa). As the target year moves further from the base year (2010) so the emphasis moves from historical growth rates to national-level industry growth rates.

  • Gross value added (GVA) by broad economic sector - Northern Cape Province, 2018-2023 [R billions, constant 2010 prices]

 

2018

2019

2020

2021

2022

2023

Average Annual growth

Agriculture

4.42

4.36

4.44

4.49

4.49

4.52

0.47%

Mining

17.68

16.73

16.60

17.03

17.51

18.00

0.36%

Manufacturing

2.01

1.95

1.92

1.91

1.92

1.93

-0.86%

Electricity

1.82

1.69

1.64

1.61

1.60

1.58

-2.73%

Construction

1.55

1.51

1.49

1.50

1.52

1.54

-0.09%

Trade

7.24

7.09

7.02

7.06

7.11

7.16

-0.22%

Transport

6.12

6.03

6.02

6.07

6.17

6.26

0.47%

Finance

8.78

8.87

8.86

8.93

9.06

9.19

0.90%

Community services

12.48

12.35

12.00

11.79

11.71

11.65

-1.36%

Total Industries

62.11

60.57

59.98

60.40

61.09

61.84

-0.09%

Source: IHS Markit Regional eXplorer version 1870

The finance sector is expected to grow fastest at an average of 0.90% annually from R 8.78 billion in Northern Cape Province to R 9.19 billion in 2023. The mining sector is estimated to be the largest sector within the Northern Cape Province in 2023, with a total share of 29.1% of the total GVA (as measured in current prices), growing at an average annual rate of 0.4%. The sector that is estimated to grow the slowest is the electricity sector with an average annual growth rate of -2.73%.

  • Gross value added (GVA) by aggregate economic sector - Northern Cape Province, 2018-2023 [Annual growth rate, constant 2010 prices]

The Primary sector is expected to grow at an average annual rate of 0.38% between 2018 and 2023, with the Secondary sector growing at -1.25% on average annually. The Tertiary sector is expected to grow at an average annual rate of -0.21% for the same period.

Based on the typical profile of a developing country, we can expect faster growth in the secondary and tertiary sectors when compared to the primary sector. Also remember that the agricultural sector is prone to very high volatility as a result of uncertain weather conditions, pests and other natural causes - and the forecasts presented here is merely a long-term trend rather than trying to forecast the unpredictable weather conditions.

1.3       Tress Index

  • The Tress index measures the degree of concentration of an area's economy on a sector basis. A Tress index value of 0 means that all economic sectors in the region contribute equally to GVA, whereas a Tress index of 100 means that only one economic sector makes up the whole GVA of the region.
  • Tress index - Northern Cape and National Total, 2008-2018 [Number]

In 2018, Northern Cape's Tress Index was estimated at 39.9 which are lower than the 40.3 of the national. This implies that - on average - Northern Cape Province is more diversified in terms of its economic activity spread than the national's economy as a whole.

The more diverse an economy is, the more likely it is to create employment opportunities across all skills levels (and not only - for instance - employment opportunities that cater for highly skilled labourers), and maintain a healthy balance between labour-intensive and capital-intensive industries. If both economic growth and the alleviation of unemployment are of concern, clearly there need to be industries that are growing fast and also creating jobs in particular the lower skilled categories. Unfortunately, in practice many industries that are growing fast are not those that create many employment opportunities for unskilled labourers (and alleviate unemployment).

1.4       Location Quotient

  • A specific regional economy has a comparative advantage over other regional economies if it can more efficiently produce the same good. The location quotient is one way of measuring this comparative advantage.

If the location quotient is larger than one for a specified sector within a region, then that region has a comparative advantage in that sector. This is because the share of that sector of the specified regional economy is greater than the same sector in the national economy. The location quotient is usually computed by taking the percentage share of the sector in the regional economy divided by the percentage share of that same sector in the national economy.

  • Location quotient by broad economic sectors - Northern Cape Province and South Africa, 2018 [Number]

For 2018 Northern Cape Province has a very large comparative advantage in the agriculture sector. The mining sector also has a very large comparative advantage. The transport also has a comparative advantage when comparing it to the South Africa economy as a whole, although less prominent. The Northern Cape Province has a comparative disadvantage when it comes to the manufacturing and finance sector which has a large comparative disadvantage. In general mining is a very concentrated economic sector. The entire Northern Cape Province-economy is centred around the mines in the area, with an LQ of 2.72.

 

 

2.       Labour

The labour force of a country consists of everyone of working age (above a certain age and below retirement) that are participating as workers, i.e. people who are actively employed or seeking employment.  This is also called the economically active population (EAP). People not included are students, retired people, stay-at-home parents, people in prisons or similar institutions, people employed in jobs or professions with unreported income, as well as discouraged workers who cannot find work.

  • Working age population in Northern Cape and National Total, 2008 and 2018 [Number]

 

Northern Cape

National Total

2008

2018

2008

2018

15‑19

106,000

100,000

5,300,000

4,570,000

20‑24

104,000

106,000

5,230,000

4,960,000

25‑29

92,000

112,000

4,390,000

5,530,000

30‑34

80,100

116,000

3,690,000

5,420,000

35‑39

73,900

102,000

3,230,000

4,360,000

40‑44

66,000

85,900

2,790,000

3,480,000

45‑49

53,600

78,800

2,440,000

2,950,000

50‑54

41,500

68,200

2,040,000

2,530,000

55‑59

37,300

51,900

1,660,000

2,180,000

60‑64

32,900

38,400

1,310,000

1,790,000

Total

687,696

858,679

32,070,524

37,757,662

Source: IHS Markit Regional eXplorer version 1870

The working age population in Northern Cape in 2018 was 859 000, increasing at an average annual rate of 2.25% since 2008. For the same period the working age population for South Africa increased at 1.65% annually

The graph below combines all the facets of the labour force in the Northern Cape Province into one compact view. The chart is divided into "place of residence" on the left, which is measured from the population side, and "place of work" on the right, which is measured from the business side.

  • Labour Glimpse - Northern Cape Province, 2018

Reading the chart from the left-most bar, breaking down the total population of the Northern Cape Province (1.32 million) into working age and non-working age, the number of people that are of working age is about 859 000.  As per definition, those that are of age 0 - 19 (youth) or age 65 and up (pensioners) are part of the non-working age population.  Out of the working age group, 55.6% are participating in the labour force, meaning 477 000 residents of the province forms currently part of the economically active population (EAP).  Comparing this with the non-economically active population (NEAP) of the province: fulltime students at tertiary institutions, disabled people, and those choosing not to work, sum to 382 000 people.  Out of the economically active population, there are 136 000 that are unemployed, or when expressed as a percentage, an unemployment rate of 28.5%. Up to here all the statistics are measured at the place of residence.

On the far right we have the formal non-Agriculture jobs in Northern Cape, broken down by the primary (mining), secondary and tertiary industries.  The majority of the formal employment lies in the Tertiary industry, with 168 000 jobs.  When including the informal, agricultural and domestic workers, we have a total number of 345 000 jobs in the area.  Formal jobs make up 67.3% of all jobs in the Northern Cape Province.  The difference between the employment measured at the place of work, and the people employed living in the area can be explained by the net commuters that  commute every day into the province.

In theory, a higher or increasing population dividend is supposed to provide additional stimulus to economic growth.  People of working age tend to uphold higher consumption patterns (Final Consumption Expenditure, FCE), and a more dense concentration of working age people is supposed to decrease dependency ratios - given that the additional labour which is offered to the market, is absorbed.

2.1       Economically Active Population (EAP)

The economically active population (EAP) is a good indicator of how many of the total working age population are in reality participating in the labour market of a region.  If a person is economically active, he or she forms part of the labour force.

  • The economically active population (EAP) is defined as the number of people (between the age of 15 and 65) who are able and willing to work, and who are actively looking for work. It includes both employed and unemployed people. People, who recently have not taken any active steps to find employment, are not included in the measure.  These people may (or may not) consider themselves unemployed.  Regardless, they are counted as discouraged work seekers, and thus form part of the non-economically active population.
  • Economically active population (EAP) - Northern Cape and National Total, 2008-2018 [number, percentage ]

 

Northern Cape

National Total

Northern Cape as % of national

2008

387,000

18,300,000

2.1%

2009

384,000

18,300,000

2.1%

2010

380,000

18,000,000

2.1%

2011

391,000

18,300,000

2.1%

2012

411,000

18,700,000

2.2%

2013

434,000

19,300,000

2.2%

2014

455,000

20,100,000

2.3%

2015

464,000

20,900,000

2.2%

2016

468,000

21,500,000

2.2%

2017

473,000

22,100,000

2.1%

2018

477,000

22,400,000

2.1%


Average Annual growth

2008‑2018

2.13%

2.03%

 

Source: IHS Markit Regional eXplorer version 1870

Northern Cape Province's EAP was 477 000 in 2018, which is 36.11% of its total population of 1.32 million, and roughly 2.13% of the total EAP of the South Africa.  From 2008 to 2018, the average annual increase in the EAP in the Northern Cape Province was 2.13%, which is 0.099 percentage points higher than the growth in the EAP of National Total's for the same period.

  • EAP as % of total population - Northern Cape and the rest of National Total, 2008, 2013, 2018 [percentage]

 

2008

2013

2018

Northern Cape

36.0%

36.1%

36.1%

Western Cape

46.2%

46.4%

46.9%

Eastern Cape

28.5%

27.3%

31.6%

Free State

38.3%

38.3%

41.3%

KwaZulu‑Natal

32.4%

29.5%

31.1%

North‑West

35.2%

31.5%

33.5%

Gauteng

48.8%

47.2%

48.4%

Mpumalanga

34.9%

36.2%

39.6%

Limpopo

24.6%

23.8%

29.7%

Source: IHS Markit Regional eXplorer version 1870

In 2008, 36.0% of the total population in Northern Cape Province were classified as economically active which increased to 36.1% in 2018. Compared to the other regions in South Africa, Gauteng Province had the highest EAP as a percentage of the total population within its own region relative to the other regions. On the other hand, Limpopo Province had the lowest EAP with 29.7% people classified as economically active population in 2018.

2.1.1        Labour Force participation rate

  • The labour force participation rate (LFPR) is the Economically Active Population (EAP) expressed as a percentage of the total working age population.

The following is the labour participation rate of the Northern Cape and National Total as a whole.

  • The labour force participation rate - Northern Cape and National Total, 2008-2018 [percentage]

 

Northern Cape

National Total

2008

56.2%

57.2%

2009

54.2%

55.9%

2010

52.2%

54.2%

2011

52.5%

53.9%

2012

53.8%

54.3%

2013

55.6%

55.2%

2014

57.1%

56.6%

2015

57.2%

57.7%

2016

56.6%

58.7%

2017

56.1%

59.5%

2018

55.6%

59.4%

Source: IHS Markit Regional eXplorer version 1870

The Northern Cape Province's labour force participation rate decreased from 56.20% to 55.58% which is a decrease of -0.63 percentage points. South Africa as a whole increased from 57.15% to 59.36% from 2008 to 2018.The Northern Cape Province labour force participation rate exhibited a lower percentage point change compared to the South Africa from 2008 to 2018.

  • The labour force participation and unemployment rates - Northern Cape Province, 2008-2018 [percentage]

In 2018 the labour force participation rate for Northern Cape was at 55.6% which is very similar when compared to the 56.2% in 2008. The unemployment rate is an efficient indicator that measures the success rate of the labour force relative to employment. In 2008, the unemployment rate for Northern Cape was 27.5% and increased overtime to 28.5% in 2018. The gap between the labour force participation rate and the unemployment rate decreased which indicates a negative outlook for the employment within Northern Cape Province.

  • The labour force participation rate - district municipalities and the rest of Northern Cape Province, 2013 and 2018 [percentage]

Frances Baard District Municipality had the highest labour force participation rate with 57.0% in 2018 decreasing from 57.4% in 2008. Pixley ka Seme District Municipality had the lowest labour force participation rate of 53.0% in 2018, this decreased from 54.7% in 2008.

2.2       Total Employment

Employment data is a key element in the estimation of unemployment.  In addition, trends in employment within different sectors and industries normally indicate significant structural changes in the economy.  Employment data is also used in the calculation of productivity, earnings per worker, and other economic indicators.

  • Total employment consists of two parts: employment in the formal sector, and employment in the informal sector
  • Total employment - Northern Cape and National Total, 2008-2018 [numbers]

 

Northern Cape

National Total

2008

287,000

13,900,000

2009

289,000

13,800,000

2010

286,000

13,500,000

2011

295,000

13,700,000

2012

295,000

14,000,000

2013

310,000

14,500,000

2014

322,000

15,100,000

2015

328,000

15,600,000

2016

331,000

15,900,000

2017

337,000

16,100,000

2018

345,000

16,300,000


Average Annual growth

2008‑2018

1.85%

1.63%

Source: IHS Markit Regional eXplorer version 1870

In 2018, Northern Cape employed 345 000 people which is 2.12% of the total employment in South Africa (16.3 million). Employment within Northern Cape increased annually at an average rate of 1.85% from 2008 to 2018.

  • Total employment per broad economic sector - Northern Cape and the rest of National Total, 2018 [Numbers]

 

Northern Cape

Western Cape

Eastern Cape

Free State

KwaZulu‑Natal

North‑West

Gauteng

Mpumalanga

Limpopo

Total
 National Total

Agriculture

47,400

205,000

97,600

67,000

133,000

55,600

36,900

87,000

134,000

863,932

Mining

32,500

3,680

1,250

42,800

10,800

130,000

74,200

92,300

69,000

456,478

Manufacturing

13,500

318,000

128,000

56,500

330,000

59,100

603,000

92,600

78,200

1,678,253

Electricity

3,120

7,490

3,820

6,760

9,040

4,450

30,300

22,800

8,430

96,237

Construction

22,700

198,000

152,000

51,000

209,000

68,400

363,000

92,600

133,000

1,290,962

Trade

56,500

537,000

339,000

166,000

560,000

191,000

1,100,000

242,000

321,000

3,512,706

Transport

11,300

131,000

69,700

34,900

165,000

30,900

341,000

49,700

49,500

883,457

Finance

26,400

496,000

170,000

81,200

382,000

98,200

1,230,000

140,000

123,000

2,741,785

Community services

103,000

452,000

389,000

183,000

629,000

211,000

978,000

218,000

308,000

3,470,925

Households

28,200

153,000

118,000

88,300

235,000

78,300

380,000

96,400

111,000

1,286,961

Total

345,000

2,500,000

1,470,000

777,000

2,660,000

926,000

5,130,000

1,130,000

1,340,000

16,281,696

Source: IHS Markit Regional eXplorer version 1870

Northern Cape Province employs a total number of 345 000 people within its province. The province that employs the highest number of people relative to the other regions within South Africa is Gauteng province with a total number of 5.13 million. Northern Cape Province also employed the lowest number of people within South Africa.

In Northern Cape Province the economic sectors that recorded the largest number of employment in 2018 were the community services sector with a total of 103 000 employed people or 30.0% of total employment in the province. The trade sector with a total of 56 500 (16.4%) employs the second highest number of people relative to the rest of the sectors. The electricity sector with 3 120 (0.9%) is the sector that employs the least number of people in Northern Cape Province, followed by the transport sector with 11 300 (3.3%) people employed.

  • Total employment per broad economic sector - Northern Cape Province, 2018 [percentage]

2.3       Formal and Informal employment

Total employment can be broken down into formal and informal sector employment. Formal sector employment is measured from the formal business side, and the informal employment is measured from the household side where formal businesses have not been established.

Formal employment is much more stable than informal employment. Informal employment is much harder to measure and manage, simply because it cannot be tracked through the formal business side of the economy. Informal employment is however a reality in South Africa and cannot be ignored.

The number of formally employed people in Northern Cape Province counted 307 000 in 2018, which is about 89.17% of total employment, while the number of people employed in the informal sector counted 37 400 or 10.83% of the total employment. Informal employment in Northern Cape increased from 27 100 in 2008 to an estimated 37 400 in 2018.

  • Formal and informal employment by broad economic sector - Northern Cape Province, 2018 [numbers]

Some of the economic sectors have little or no informal employment:

Mining industry, due to well-regulated mining safety policies, and the strict registration of a mine, has little or no informal employment. The Electricity sector is also well regulated, making it difficult to get information on informal employment. Domestic Workers and employment in the Agriculture sector is typically counted under a separate heading.

In 2018 the Trade sector recorded the highest number of informally employed, with a total of 12 600 employees or 33.64% of the total informal employment. This can be expected as the barriers to enter the Trade sector in terms of capital and skills required is less than with most of the other sectors. The Manufacturing sector has the lowest informal employment with 2 400 and only contributes 6.44% to total informal employment.

  • Formal and informal employment by broad economic sector - Northern Cape Province, 2018 [numbers]

 

Formal employment

Informal employment

Agriculture

47,400

N/A

Mining

32,500

N/A

Manufacturing

11,100

2,400

Electricity

3,120

N/A

Construction

17,300

5,400

Trade

44,000

12,600

Transport

8,590

2,720

Finance

22,300

4,070

Community services

93,100

10,200

Households

28,200

N/A

Source: IHS Markit Regional eXplorer version 1870

The informal sector is vital for the areas with very high unemployment and very low labour participation rates.  Unemployed people see participating in the informal sector as a survival strategy.  The most desirable situation would be to get a stable formal job. But because the formal economy is not growing fast enough to generate adequate jobs, the informal sector is used as a survival mechanism.

2.4       Unemployment

  • The unemployed includes all persons between 15 and 65 who are currently not working, but who are actively looking for work. It therefore excludes people who are not actively seeking work (referred to as discouraged work seekers).

The choice of definition for what constitutes being unemployed has a large impact on the final estimates for all measured labour force variables. The following definition was adopted by the Thirteenth International Conference of Labour Statisticians (Geneva, 1982): The "unemployed" comprise all persons above a specified age who during the reference period were:

  • "Without work", i.e. not in paid employment or self-employment;
  • "Currently available for work", i.e. were available for paid employment or self-employment during the reference period; and
  • "Seeking work", i.e. had taken specific steps in a specified reference period to seek paid employment or self-employment. The specific steps may include registration at a public or private employment exchange; application to employers; checking at worksites, farms, factory gates, market or other assembly places; placing or answering newspaper advertisements; seeking assistance of friends or relatives; looking for land.
  • Unemployment (official definition) - Northern Cape and National Total, 2008-2018 [Number percentage]

 

Northern Cape

National Total

Northern Cape as % of national

2008

106,000

4,470,000

2.4%

2009

104,000

4,440,000

2.3%

2010

105,000

4,490,000

2.3%

2011

110,000

4,590,000

2.4%

2012

117,000

4,710,000

2.5%

2013

126,000

4,870,000

2.6%

2014

135,000

5,070,000

2.7%

2015

140,000

5,320,000

2.6%

2016

141,000

5,690,000

2.5%

2017

139,000

6,020,000

2.3%

2018

136,000

6,130,000

2.2%


Average Annual growth

2008‑2018

2.48%

3.20%

 

Source: IHS Markit Regional eXplorer version 1870

In 2018, there were a total number of 136 000 people unemployed in Northern Cape, which is an increase of 29 600 from 106 000 in 2008. The total number of unemployed people within Northern Cape constitutes 2.22% of the total number of unemployed people in South Africa. The Northern Cape Province experienced an average annual increase of 2.48% in the number of unemployed people, which is better than that of the South Africa which had an average annual increase in unemployment of 3.20%.

  • Unemployment rate (official definition) - Northern Cape and National Total, 2008-2018 [Percentage]

 

Northern Cape

National Total

2008

27.5%

24.4%

2009

27.1%

24.3%

2010

27.7%

24.9%

2011

28.1%

25.1%

2012

28.5%

25.1%

2013

29.1%

25.2%

2014

29.7%

25.2%

2015

30.1%

25.5%

2016

30.1%

26.4%

2017

29.5%

27.2%

2018

28.5%

27.4%

Source: IHS Markit Regional eXplorer version 1870

In 2018, the unemployment rate in Northern Cape Province (based on the official definition of unemployment) was 28.47%, which is an increase of 0.966 percentage points. The unemployment rate in Northern Cape Province is higher than that of National Total. The unemployment rate for South Africa was 27.35% in 2018, which is a increase of -2.94 percentage points from 24.41% in 2008.

  • Unemployment and unemployment rate (official definition) - Northern Cape Province, 2008-2018 [number percentage]

When comparing unemployment rates among regions within Northern Cape Province, Pixley ka Seme District Municipality has indicated the highest unemployment rate of 34.0%, which has increased from 31.5% in 2008.  It can be seen that the Namakwa District Municipality had the lowest unemployment rate of 21.4% in 2018, which decreased from 24.4% in 2008.

  • Unemployment rate - district municipalities and the rest of Northern Cape Province, 2008, 2013 and 2018 [percentage]

3.       Income and Expenditure

In a growing economy among which production factors are increasing, most of the household incomes are spent on purchasing goods and services. Therefore, the measuring of the income and expenditure of households is a major indicator of a number of economic trends.  It is also a good marker of growth as well as consumer tendencies.

3.1       Number of Households by Income category

The number of households is grouped according to predefined income categories or brackets, where income is calculated as the sum of all household gross disposable income: payments in kind, gifts, homemade goods sold, old age pensions, income from informal sector activities, subsistence income, etc.). Note that income tax is included in the income distribution.

Income categories start at R0 - R2,400 per annum and go up to R2,400,000+ per annum. A household is either a group of people who live together and provide themselves jointly with food and/or other essentials for living, or it is a single person living on his/her own. These income brackets do not take into account inflation creep: over time, movement of households "up" the brackets is natural, even if they are not earning any more in real terms.

  • Households by income category - Northern Cape and National Total, 2018 [Number Percentage]

 

Northern Cape

National Total

Northern Cape as % of national

0‑2400

32

1,700

1.91%

2400‑6000

758

32,900

2.31%

6000‑12000

5,450

318,000

1.71%

12000‑18000

10,900

627,000

1.73%

18000‑30000

32,400

1,770,000

1.82%

30000‑42000

34,400

1,790,000

1.92%

42000‑54000

31,700

1,590,000

2.00%

54000‑72000

39,000

1,730,000

2.25%

72000‑96000

37,600

1,580,000

2.38%

96000‑132000

37,400

1,500,000

2.49%

132000‑192000

36,700

1,440,000

2.54%

192000‑360000

46,100

1,870,000

2.47%

360000‑600000

28,300

1,220,000

2.31%

600000‑1200000

19,700

892,000

2.21%

1200000‑2400000

5,840

290,000

2.01%

2400000+

806

46,700

1.73%

Total

367,000

16,700,000

2.20%

Source: IHS Markit Regional eXplorer version 1870

It was estimated that in 2018 13.48% of all the households in the Northern Cape Province, were living on R30,000 or less per annum. In comparison with 2008's 30.91%, the number is about half. The 192000-360000 income category has the highest number of households with a total number of 46 100, followed by the 54000-72000 income category with 39 000 households. Only 32 households fall within the 0-2400 income category.

  • Households by income bracket - Northern Cape Province, 2008-2018 [Percentage]

For the period 2008 to 2018 the number of households earning more than R30,000 per annum has increased from 69.09% to 86.52%. It can be seen that the number of households with income equal to or lower than R6,000 per year has decreased by a significant amount.

3.2       Annual total Personal Income

Personal income is an even broader concept than labour remuneration. Personal income includes profits, income from property, net current transfers and net social benefits.

  • Annual total personal income is the sum of the total personal income for all households in a specific region. The definition of income is the same as used in the income brackets (Number of Households by Income Category), also including the income tax. For this variable, current prices are used, meaning that inflation has not been taken into account.
  • Annual total personal income - Northern Cape and National Total[Current Prices, R billions]

 

Northern Cape

National Total

2008

32.1

1,587.9

2009

34.2

1,695.1

2010

37.2

1,843.3

2011

41.2

2,033.0

2012

46.0

2,226.5

2013

49.6

2,412.1

2014

56.7

2,590.6

2015

61.9

2,794.9

2016

65.8

2,990.4

2017

72.0

3,227.9

2018

76.7

3,420.9


Average Annual growth

2008‑2018

9.09%

7.98%

Source: IHS Markit Regional eXplorer version 1870

Northern Cape Province recorded an average annual growth rate of 9.09% (from R 32.1 billion to R 76.7 billion) from 2008 to 2018, South Africa had an average annual growth rate of 7.98% (from R 1.59 trillion to R 3.42 trillion) which is less than the growth rate in Northern Cape Province.

  • Annual total personal income by population group - Northern Cape and the rest of National Total [Current Prices, R billions]

The total personal income of Northern Cape Province amounted to approximately R 76.7 billion in 2018. The African population group earned R 23 billion, or 37.34% of total personal income, while the White population group earned R 24 billion, or 31.24% of the total personal income. The African and the Asian population groups only had a share of 30.02% and 1.40% of total personal income respectively.

  • Annual total personal income - Namakwa, Pixley ka Seme, ZF Mgcawu, Frances Baard and John Taolo Gaetsewe district municipalities[Current Prices, R billions]

 

Namakwa

Pixley ka Seme

ZF Mgcawu

Frances Baard

John Taolo Gaetsewe

2008

4.28

5.11

7.24

10.68

4.82

2009

4.58

5.50

7.78

11.15

5.24

2010

4.93

5.97

8.47

11.98

5.84

2011

5.37

6.57

9.37

13.21

6.66

2012

6.05

7.27

10.53

14.49

7.67

2013

6.62

7.92

11.45

15.41

8.21

2014

7.44

9.23

13.19

17.62

9.26

2015

8.03

10.14

14.52

18.94

10.23

2016

8.63

10.86

15.51

19.88

10.88

2017

9.60

11.92

17.08

21.41

12.01

2018

10.26

12.73

18.30

22.52

12.91


Average Annual growth

2008‑2018

9.13%

9.57%

9.71%

7.74%

10.36%

Source: IHS Markit Regional eXplorer version 1870

When looking at the annual total personal income for the regions within South Africa it can be seen that the Frances Baard District Municipality had the highest total personal income with R 22.5 billion which increased from R 10.7 billion recorded in 2008. It can be seen that the Namakwa District Municipality had the lowest total personal income of R 10.3 billion in 2018, this increased from R 4.28 billion in 2008.

3.3       Annual per Capita Income

  • Per capita income refers to the income per person. Thus, it takes the total personal income per annum and divides it equally among the population.

Per capita income is often used as a measure of wealth particularly when comparing economies or population groups. Rising per capita income usually indicates a likely swell in demand for consumption.

  • Per capita income - Northern Cape and National Total, 2018 [Rand, current prices]

The per capita income for Northern Cape Province (R 58,000) is lower than that of the South Africa as a whole which is R 58,800.

  • Per capita income by population group - Northern Cape and the rest of South Africa, 2018 [Rand, current prices]

 

African

White

Coloured

Asian

Northern Cape

34,500

244,000

52,600

97,300

Western Cape

35,900

276,000

58,700

129,000

Eastern Cape

28,800

237,000

53,400

116,000

Free State

36,500

234,000

66,000

121,000

KwaZulu‑Natal

28,900

259,000

84,600

123,000

North‑West

41,000

202,000

51,800

97,500

Gauteng

52,500

258,000

81,000

135,000

Mpumalanga

36,800

179,000

58,500

91,300

Limpopo

32,100

204,000

61,300

94,400

Source: IHS Markit Regional eXplorer version 1870

Gauteng Province has the highest per capita income with a total of R 83,400. Western Cape Province had the second highest per capita income at R 80,100, whereas Limpopo Province had the lowest per capita income at R 36,500. In Northern Cape Province, the White population group has the highest per capita income, with R 244,000, relative to the other population groups.  The population group with the second highest per capita income within Northern Cape Province is the Asian population group (R 97,300), where the Coloured and the African population groups had a per capita income of R 52,600 and R 34,500 respectively.

3.4       Index of Buying Power

  • The Index of Buying Power (IBP) is a measure of a region's overall capacity to absorb products and/or services. The index is useful when comparing two regions in terms of their capacity to buy products. Values range from 0 to 1 (where the national index equals 1), and can be interpreted as the percentage of national buying power attributable to the specific region. Regions' buying power usually depends on three factors: the size of the population; the ability of the population to spend (measured by total income); and the willingness of the population to spend (measured by total retail sales).
  • Index of buying power - Northern Cape and National Total, 2018 [Number]

 

Northern Cape

National Total

Population

1,321,491

58,125,712

Population ‑ share of national total

2.3%

100.0%

Income

76,713

3,420,872

Income ‑ share of national total

2.2%

100.0%

Retail

32,924,007

1,056,278,508

Retail ‑ share of national total

3.1%

100.0%

Index

0.03

1.00

Source: IHS Markit Regional eXplorer version 1870

Northern Cape Province has a 2.3% share of the national population, 2.2% share of the total national income and a 3.1% share in the total national retail, this all equates to an IBP index value of 0.025 relative to South Africa as a whole. National Total has an IBP of 1.  . 

The considerable low index of buying power of the Northern Cape Province suggests that the province has access to only a small percentage of the goods and services available in all of the South Africa. Its residents are most likely spending some of their income in neighbouring areas.

  • Index of buying power Northern Cape Province, 2008-2018 [Index value]

Between 2008 and 2018, the index of buying power within Northern Cape Province increased to its highest level in 2015 (0.02526) from its lowest in 2008 (0.02339). Although the buying power within Northern Cape Province is relatively small compared to other regions, the IBP increased at an average annual growth rate of 0.70%.

 

 

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