The recently released experimental provincial GDP figures by Stats SA show that Gauteng not only has the largest provincial economy but grew at the fastest rate in 2022, at 2.8% — a reminder that it remains the backbone of the South African economy.
While these statistics are listed as experimental, subject to Stats SA perfecting their system, their GDP estimates are close to the calculations of consultancies such as Quantec, which estimated Gauteng's GDP to have grown by 2.5% in 2022.
These figures show that despite its small geographical size, the province remains the county's largest economy — larger than those of KwaZulu-Natal and the Western Cape combined, generating around R33 of every R100 nationally.
They also reveal that Gauteng is still viewed as the province of dreams, an appealing destination for job and fortune seekers, and a land of limitless possibilities. Migration to the province between 2021 and 2026 is expected to total around 1.4-million people.
This economic resilience is not accidental. It results from the provincial government's conscious efforts to position Gauteng as the preferred investment destination, to keep a competitive edge through agile governance and to increase its capacity to deal with and adapt to disruptive change.
The state of the economy reflects the considerable influence of decisions by policymakers; such as the impact of the provincial growth strategy, Growing Gauteng Together 2030, adopted in 2019 to create an economically inclusive Gauteng City Region.
This prioritised diversifying the economy and increasing its productive capacity. A province formerly dominated by mining has embraced sectors including the digital economy, travel and hospitality, the automotive industry, financial services and cultural and creative industries. Tertiary services are the largest sector in the Gauteng economy, showing a structural shift from the mining past.
Finance, real estate and business services, manufacturing and trade were the key contributors to Gauteng's value added in 2022.
The provincial government's dedication to the concept of a capable developmental state, intended to be the primary focus under the NDP, has started to produce expected outcomes. The province carefully balances government involvement and intervention in the economy while creating an environment favourable to private sector investment and economic growth.
To improve the ease of doing business in the province, focused skills development for each industry is supported, as is the development of supportive infrastructure such as industrial parks and special economic zones (SEZs).
The province's SEZs, such as OR Tambo and Tshwane Automotive and the projected Vaal and West Rand zones, demonstrate this dedication to nurturing private sector investment. These zones concentrate on industries including manufacturing, agro-processing, green energy and the automotive sector. They provide incentives such as support for infrastructure, duty-free imports and tax breaks to entice domestic and foreign investment.
The OR Tambo SEZ has drawn R1bn in investment, while the Tshwane Automotive SEZ has attracted R4.7bn. Our forecasts indicate that by 2030 our SEZs will likely attract R20bn in investment and produce more than 50,000 jobs.
We collaborate with national departments, state-owned enterprises, development finance institutions and business leaders to create comprehensive implementation plans for high-growth sectors.
Increasing trade within our continent and exports from Gauteng has become essential in our attempts to expand the economy. We support and promote manufacturing goods and services for the African Continental Free Trade Area (AfCFTA).
Gauteng, the fifth-largest economy on the continent, already makes up 7% of Africa's GDP. As the gateway to the AfCFTA, the province is a good hub for international trade due to its strategic location and close access to important ports, airports and transport networks.
Load-shedding has not only severely disrupted people's lives, it has had a detrimental impact on the cost of living, hampered efforts to create new jobs, and weakened the battle against poverty. Left unattended, it has the potential to reverse foreign investment, erode the competitiveness of our economy and result in business closures.
The data demonstrates that Gauteng remains a desirable investment destination with a robust economy despite an unimpressive domestic economic environment and severe load-shedding
The province adopted a five-point strategy to respond to this crisis:
- eliminating all illegal power connections;
- installing smart meters in every home and business;
- improving revenue collection by cleaning the billing system;
- cleaning the indigent register; and
- replacing all damaged transformers.
Gauteng has one of South Africa's most robust economic, technological and talent bases and has modernised government operations and service delivery using information and communications technology.
The province is accelerating the systematic creation of new information infrastructure and building a new basis for developing the digital economy because it recognises that as the driving force and catalyst for economic progress.
We intend to develop new ideas to advance economic growth, factoring in issues such as social justice, income inequality and environmental sustainability. This entails expanding the notion of economic growth from its limited perspective centred on the GDP growth rate and per capita income growth.
The only way to promote and maintain economic growth and secure the genuine redistribution of wealth is by creating decent jobs and supporting SMMEs. We aim to assist small businesses in managing high administrative costs, such as electricity, data charges and the lack of readily available low-cost financing.
The Township Economic Development Act, a provincial blueprint for assisting and funding township businesses, is one way that Gauteng is working toward sustained economic growth, the kind that lifts millions of people out of poverty. We also plan to use public procurement policy as an important instrument to support women's empowerment and the expansion of black and township-based businesses.
Overall, the data demonstrates that Gauteng remains a desirable investment destination with a robust economy despite an unimpressive domestic economic environment and severe load-shedding.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.