Inside Regional - Regional Analysis

South Africa has nine provinces. The performance of the provinces differs in the delivery of economic output, regional development and the all too important aspect: Development.


South Africa’s Gross Domestic Product currently stands at approximately R4,350,314.  The country has been experiencing poor GDP growth and this has affected the provinces. Gauteng remains the powerhouse for the country, with KwaZulu Natal and the Western Cape following.

In real terms, at 2010 level, the information is displayed below:


The percentage change indicates that the North West, heavily relying on Mining, has had the most economic fluctuation, but generally, nearly all provinces show an overall decline.
Western Cape is largely focused on tertiary industries, and there has been a decline in agricultural output. The Eastern Cape by contrast has tertiary sector contribution mostly through the government services. Contribution to Northern Cape’s GDP is strong in mining with a small agricultural base, but the focus is also similar to the Eastern Cape. If South Africa wants to expand its manufacturing base, there is a need for a spread of activities in the five provinces that is lacking in these industries.


Primary Industries

Secondary Industries

Tertiary industries

Taxes - subsidies

Western Cape





Eastern Cape





Northern Cape





Free State










North West




















Despite the drought, the country is recovering well.  Government Services as contributor to GDP is a problem for the poorer provinces.

Construction and Building by Province

Building plans are often used to monitor the state of the economy and the formulation of economic policy. Private Sector uses the information to understand the growth, plan new developments and provide guidance on areas which are struggling. Municipalities pass building plans as provided by residents/businesses living in the municipalities but not all the buildings passed end up being built.  The table below displays the number of plans passed and the number of houses built in each province. The narrower the distance between the two, the greater the stability in the planning process.

There is a downward trend in residential units completed overall.  This is evident in the following two graphs.


Retail growth mimics the growth in buildings completed. Looking at the graph below, one can see that the years just before 2010 had seen a spurt in retail space for Gauteng province. The reasons for this could be due to preparation for 2010 Soccer World Cup.  More recently, there is a growth due to new centres being opened or older ones being revamped. However, since 2014, Gauteng and North West seem to be on an upward trajectory of retail space.

Possible Solutions For the Future

As a company looking at the major economic problems in the country, some of the solutions could be:

  1. The collapse of the parastatals is a serious threat to the economy, and to the perception that the country is on a declining economic trajectory. It is important to maintain the agencies that are controlled or supported by the government and create a public-private partnership.  Eskom is continuing to pose a problem for the economy going forward but so is most of the other parastatals.
  2. On-going labour disputes makes this a difficult country in which to employ staff. Companies would do well to ensure that staff are rewarded for their loyalty and have a market related wage to avoid disputes. The NMW (National Minimum Wage) has had a positive outcome for the economy.
  3. South Africa should be a major player in the delivery of Solar Energy. The western half of Limpopo and North West province, as well as Northern Cape and Eastern Cape have massive opportunities for Solar Plants, instead of Nuclear Energy Plants. The Nuclear Plant has been put on hold.
  4. We have mines, but we export the raw materials, with no thought of the creating avenues for the end product. Mining is on a decline and there is a need to re-habilitate these areas. This requires learning new skills for the workers on the mine. 
  5. The manufacturing sector has all but died over the past 20 years. In our quest to trade with China, to whom we export raw materials, we end up importing durables and semi-durables, to the detriment of our own economy. Until South Africa, and even Africa, can create a strong manufacturing base, it will continue to lose out. If South Africa is not able to compete in textiles for the mass market, there are gaps for the artisanal products globally. However, the quality is expected to be high.
  6. Each province can deliver something unique in terms of its resources, its unique history and its place within the geographical context of the country.
  7. Education in sectors which are high contributor to GDP is vital. For example, this could be multiplier industries in the mining sector for Limpopo, North West and Northern Cape. Furthermore, a growth in the number of agricultural colleges in Limpopo and Mpumalanga. Is long overdue, given the recent Land distribution Bill.
  8. Currently, employment is a major issue and the fourth industrial revolution must hone into the agricultural sector.