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Today, during the tabling of the Provincial Economic Outlook and Review (PERO) by Minister of Finance, Mireille Wenger, the opportunities for economic growth in the Western Cape, and the binding constraints on growth, were revealed.
The PERO is a comprehensive research document, compiled by the Provincial Treasury, that is a treasure trove of valuable information that can inform both government policy, and private sector investment.
Among the key economic insights for the Western Cape:
• The Western Cape’s GDP has expanded by 11.1% over the past decade, including the recession and recovery from the Covid-19 pandemic.
• Agriculture grew by 37.1% over the last decade, while the finance sector also showed robust growth with 27.5% over the same period.
• The province’s economy is expected to increase by 0.5% in 2023, followed by increased growth of 2.1% in 2024.
• In 2022, the Western Cape received R13.3 billion in Greenfield investments that created 2 315 employment opportunities. This equates to 0.7 per cent of the jobs created in the province.
• Renewable energy accounts for the 10.9% of Greenfield investments in the province or R11.6 billion, and is also the 4th largest industry in terms of foreign direct investment received.
The investment in energy is vital given the massive impact of loadshedding on the economic growth of the province and of the country. As the Minister noted, a 25-year period of inaction on Eskom’s generating capacity has resulted in an untenable and ever-worsening energy situation, with loadshedding costing the provincial GDP between R48.6 billion and R61.2 billion since loadshedding was introduced, and R8.2 billion in 2022 alone. More disturbing still, one in every ten businesses in the province was at risk of insolvency due to rolling blackouts.
Minister Wenger also reported that the Western Cape’s LEAP program has made a notable impact, with a significant decrease in the average number of crimes reported since LEAP’s implementation in hotspot areas in the Province. The Minister further noted that drug-related crime has decreased by 38% over the last decade, representing a direct impact on the profits which keep gangs in business. However, as the Minister noted, nothing will stop crime until the Western Cape achieves breakout economic growth, creates jobs, and lifts people out of poverty.
MPP Deidré Baartman: “The 2023 PERO delivers a clear message on the economic future of the Western Cape. While the DA-led Western Cape Government has made stunning progress to create jobs, keep us safe, and rid us of loadshedding, the Western Cape cannot realise its true potential while dragged down by the incompetence of national government and the pervasive burden of loadshedding.
If national government cannot make the tough choices that will deliver the growth we need, they should devolve the power to do so to a government that can.”
Issued by Deidré Baartman, MPP - DA Western Cape Spokesperson on Budget