A report by the Risk Analysis Center shows that rural provinces such as the Eastern Cape are underperforming compared to more urbanized provinces. (Photo by: Sandile Ndlovu/Sowetan/ Gallo Images /Getty Images)
South Africa's economic problems have exacerbated regional disparities, with rural areas performing significantly worse than the urban centers of Gauteng and the Western Cape.
The latest edition of the Risk Analysis Center's Economic Review highlights widening disparities between states in demographic, economic, educational, health, social security and living conditions, and calls for urgent structural reform. Emphasized.
The report cites recent data published by real estate company Lightstone showing a significant migration trend as rural residents are attracted to economic opportunities in Gauteng and the Western Cape.
These states experienced population growth of 31% and 24%, respectively, between 2011 and 2022, well above the national average of 17%. In contrast, provinces such as the Eastern Cape and the Free State recorded negligible growth of 2% and 7% respectively.
The Gauteng and Western Cape economies expanded at an average rate of 3% a year from 1995 to 2018, compared to the national economy, which grew at 2.2%, according to a paper published in the South African Journal of Journalism. It is said to be one-third faster than other regions. economy.
Garbrandt van Heerden, author of the Risk Analysis Center report, pointed out that while this difference may seem small, when added up over 20 years it amounts to a significant portion of gross value added. .
For example, the increase in gross value added in Gauteng and the Western Cape from 1995 to 2018 (R224 billion in 2010 prices) is roughly equivalent to the size of the Eastern Cape's economy.
Gauteng and the Western Cape also contribute disproportionately to the South African economy, accounting for 47.2% of GDP despite only 37.3% of the population.
“These two states are home to 53.7% of the country's individual taxpayers.
“The labor absorption rate, or the proportion of the working-age population employed, is higher in Gauteng (45.3%) and the Western Cape (52.9%) than at the national level (40.3%),” Van Heerden said. said.
“South Africa’s other seven provinces are mostly rural and underperforming.
“Their share in the total population is 62.7%, but their share in GDP is 52.8%.
“The quality of life in these provinces is also significantly worse than in Gauteng and the Western Cape.The unemployment rate in the North West province (53%) is above 50%.”
Gauteng has finance and manufacturing contributing 33.2% to the country's GDP, while the Western Cape accounts for 14%.
In contrast, Limpopo contributes 7.6% and the Northern Cape 2.3% to the country's GDP. Our high dependence on mining makes us vulnerable to global commodity fluctuations.
Dependence on sluggish primary and secondary industries is a major factor in local economic stagnation.
Mining is the main industry in Limpopo, Mpumalanga, North West and Northern Cape provinces, according to Statistics South Africa's latest provincial GDP data.
“Mining is one of South Africa's top employers, but earlier this year several mining companies said they needed to make job cuts to remain profitable.
“Power and logistics constraints are generally acknowledged to be the main reasons for the industry's decline,” Van Heerden said.
Unemployment rates also highlight disparities, with Gauteng's official unemployment rate at 35.1%, compared to 41.3% in the North West, 41% in the Eastern Cape and 37.4% in Mpumalanga.
Rural areas such as Limpopo and the Eastern Cape have higher youth and dependent ratios. In Limpopo province, 39.2% of the population is under the age of 18, putting social services under pressure.
According to the report, educational outcomes show systemic inequalities. Gauteng and the Western Cape lead with 10.7% and 10.9% of adults with a degree. These areas also have better access to school facilities, with more than 68% of schools having a library compared to 8.7% in Limpopo.
National Advanced Certification pass rates also reflect quality disparities. Free State leads the provinces with 89%, followed by Limpopo with 79.5%. In the Eastern Cape, the mathematics pass rate for learners was just 21.8%, while in Gauteng it was 33.5%.
In terms of health care, the Western Cape and Gauteng are better off with lower HIV infection rates of 11.7% and 12.3%, respectively, compared to 15.8% in KwaZulu-Natal. These two states also have excellent doctor-patient ratios.
Reliance on social grants is highest in rural provinces, with 42.9% of the population in Limpopo and 40.4% in the Eastern Cape.
Child benefit subsidies account for the majority, covering over 75% of children in the Eastern Cape and Limpopo.
The report highlights how rural areas in urban areas offer better living conditions, although they are not without their problems. In Gauteng, 97.6% of households have running water, compared to 64.2% in Limpopo. However, Gauteng has a high informal settlement rate (18.4% of households) due to migration and housing shortages.
Although electricity for lighting is almost universal across the country, there are disparities in the use of electricity for heating, with only 19.4% of households in the Eastern Cape using electricity. , and 64.1% in Gauteng.
The researchers said further barriers to rural development include the collapse of local government functions in many rural towns and the severe deterioration of water, electricity and transport infrastructure. This discourages investment, causes companies to exit, and reduces job opportunities.
“As long as this situation continues, the quality of life for residents in rural areas will continue to decline significantly.
“This will push people further into economically advantaged provinces such as Gauteng and the Western Cape, further straining infrastructure that is already creaking under the strain.
“For example, while Gauteng is the country's economic engine, it is in rapid decline due to political infighting and corruption. To offset the burden, the government is pushing local businesses, residents and We need to introduce urgent reforms aimed at creating a more attractive environment for people to work with,” Van Heerden said.
