At 26.0% in the first quarter this year, the Gauteng city-region has the highest unemployment rate among about twenty metropolitan territories reviewed by the Organisation for Economic Development and Cooperation (OECD), the ‘Territorial Review of the Gauteng city-region’ report revealed on Wednesday.

Compounding this is that in 2008, the gross domestic product (GDP) per capita in US dollar purchasing power parity was 92.4% lower than the OECD metro-region average.

“Surprisingly, intraregional inequality, as measured as the difference in GDP per capita between municipalities is not excessive by OECD standards. However, household inequality, as measured by the Gini coefficient, is one of the highest in the world,” OECD representative Michael Donovan pointed out during the launch of the report in Johannesburg.

To tackle low growth and high economic inequality, the OECD suggested Gauteng boost employment through improved labour market interventions.

This entails encouraging entrepreneurs to start their own undertakings. Donovan pointed out that only about 6% of the region’s population were running their own business concerns, which does not compare well with countries such as Brazil (15.3%) and Uganda (33.3%).

The OECD recommended that the process of registering a business could be simplified to assist this sector.

Further, job-matching services need to be expanded, while the labour market would need improved security, as the report pointed to the Gauteng region as having the highest incidences of occupational accidents in the country.

Another critical challenge the Gauteng region has to deal with is the spatial inequality that remains in place. The OECD said that when compared with other large OECD-assessed cities, Gauteng’s homeowners pay an extreme cost for housing, relative to their household income. An analysis of the ratio between the median income and the median household price in the province for small formal housing units indicated that residents have to fork out 23 times their yearly salary to buy a home.

Globally, five times was considered “severely unaffordable”.

Further, the regional review pointed to Gauteng as having spikes in residential density in certain areas, with few areas of sustained medium density, which makes it difficult to implement effective public transport systems. The location of government Reconstruction and Development Programme houses also contributed to this phenomenon.

This is also compounded by high transport costs, which may consume more than 20% of some households’ income.

Government would also need to increase the supply of medium-cost housing, close to places of work.

The OECD recommended that government build onto existing infrastructure such as the Gautrain and rapid bus transit systems. “Transport infrastructure could also be enhanced with legislative levers to coax individual drivers out of their vehicles and onto public transport,” Donovan said.

The report further revealed that the Gauteng region’s 11-million people contribute about 34% to the national GDP, ranking 14th in terms of regional contribution to a country’s GDP in the reviewed OECD regions. The organisation said that for every 1% increase in the share of the country’s population that moves to urbanised areas in Gauteng, the region’s contribution to the national GDP is expected to increase by 3.6%.

The province’s average economic growth between 1995 and 2008 was 3.6%, while 62.7% of South Africa’s trade took place in Gauteng.

The OECD’s 'Territorial Review of the Gauteng city-region' was commissioned by the provincial premier’s office and the Gauteng planning commission in 2009 and seeks to assess economic and social performance of the provincial and regional governments.

This information is then benchmarked with the database of information on about 20 other territories that had been previously analysed and helps government to implement best practice and learn from previous mistakes made in similar metropolitan areas.