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Socio-economic profile
Local Economic Development (LED) within the Cacadu District
LED is a process by which public, business and nongovernmental sector partners work collectively to create better conditions for economic growth and employment generation.
It offers local government, the private and not-for-profit sectors, and local communities the opportunity to work together to improve the local economy. It focuses on enhancing competitiveness, increasing sustainable growth and ensuring that growth is inclusive. LED encompasses a range of disciplines including physical planning, economics and marketing. It also incorporates many local government and private sector functions including environmental planning, business development, infrastructure provision, real estate development and finance.
LED essentially means that communities continually improve their investment climate and business enabling environment to enhance their competitiveness, retain jobs and improve incomes. Local communities respond to their LED needs in many ways, and a variety of approaches can be taken that include:
- Ensuring that the local investment climate is functional for local businesses;
- Supporting small and medium sized enterprises;
- Encouraging the formation of new enterprises;
- Attracting external investment (nationally and internationally);
- Investing in physical (hard) infrastructure; and
- Investing in soft infrastructure (educational and workforce development, institutional support systems and regulatory issues).
Economic sectors
- Third largest economy of the Eastern Cape Province, with 9% of provincial value added.
- Agriculture, the primary sector, contributes 28% of all value added and constitutes 41% of formal employment.
- Manufacturing and construction - the secondary sector - accounts for 13% of the economic output.
- The services sector (dominated by government services such as education, health and public administration) contributes to just under a third of the economic output.
- The Cacadu District has an average annual economic growth rate of 2.4%, placing it second after that of the Nelson Mandela Bay area.
Key features of the Cacadu District economy
§ Within the Cacadu District, Makana has the largest economy of the nine Local Municipalities, followed closely by Kouga.
§ Increasing economic growth rate.
§ Strong agricultural sector that is the largest producer of agricultural goods of the Eastern Cape Province.
§ Agricultural production centred around the citrus industry, and supported by the production of pineapples, chicory, flowers, Lucerne and vegetables.
§ Largest mohair producer in the world.
§ Export-orientation of agricultural goods.
§ Potential for the mining of kaolin reserves and establishment of a ceramics industry.
§ Agri-processing prospects from beneficiation of animal and plant fibres.
§ Small, but thriving construction industry, set to grow as a result of an increased demand from current and planned developments in the area.
§ Specialized manufacturing base positioned in niche markets.
§ Close proximity to an international airport and deep-water port for export in Nelson Mandela Bay.
§ Two industrial development zones (Coega IDZ and East London IDZ) situated on the doorstep of the Cacadu District.
§ Growing tourism industry based on natural, cultural and historical features in the area.
§ Abundance of natural resources.
§ Two development agencies in the area, Kouga and Blue Crane Development Agencies, and facilitating
projects aimed at stimulating sustainable economic growth.
Development potential within the Cacadu District
There are clearly defined current and future development nodes in the District, while there are also vast areas of undeveloped land where no or very little infrastructure exists. The main role of the Cacadu District Municipality is to facilitate development in its area of jurisdiction. Essentially, the development potential of the District centres on Agriculture and Tourism mainly:
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Agriculture
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Livestock production
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- Premier livestock province.
- Core agri-business in South Africa.
- Home to more livestock than any other province.
- Produces 21%, 28% and 46% of South Africa’s cattle, sheep & goats.
- World class producer of wool & mohair.
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Beef
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- Major potential for beef production.
- Production is projected to peak towards 2010.
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Dairy
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- Eastern Cape produces approximately 20.5% of South Africa’s total milk supply.
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Sheep & Goats
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- Small stock farming predominates in the dry Karoo interior.
- Wool & Mohair provide raw material to local industries.
- Large parts of Cacadu suitable for sheep & goat production.
- Merino sheep can achieve a margin above the cost of R180, even at the lowest price per kilogram per animal and at lowest wool price.
- Sheep production is easily adapted to a small-scale or part-time farming operation.
- Compared to most livestock enterprises, it has lower investment costs, minimal labour requirements and quicker returns.
- Angora goats can be produced in total confinement.
- Operating expenses for Angora goats are generally less than for sheep due to goats being smaller and needing less feed.
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Ostrich
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- Good potential for ostrich farming in non-coastal areas.
- Potential lies in high value leather goods and clothing, automotive upholstery and export of cured hides/skins.
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Broilers
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- Potential lies in Kouga Municipal area.
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Pigs
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- Potential lies in Blue Crane Route and Sundays River Valley Municipal areas.
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Crops
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- Eastern Cape is already a major producer of pineapples, citrus, deciduous fruit, tomatoes, chicory and tea.
- Dry land crops can be produced in most of the Municipal areas.
- By expanding irrigation in the Fish and Sunday’s River catchment areas, opportunities can be created for further citrus production and high value horticultural production.
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Maize
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- Coastal strip of land in Koukamma Municipal area is moderately suitable for production of rain-fed maize.
- Also land between Somerset East and Cookhouse suitable for rain-fed maize.
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Wheat
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- Municipal areas suited to rain-fed wheat production include Kouga, Sundays River Valley, Makana, Ndlambe and the coastal region of Koukamma.
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Soya Beans
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- Lucrative export opportunities.
- Koukamma Municipal area most suited for soya bean production.
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Sunflowers
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- Koukamma and Kouare Municipal areas are most suited to produce rain-fed sunflowers.
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Cotton
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- Summer crop.
- Suitable areas for production of irrigated cotton include Camdeboo, Ikwezi and Sundays River Valley.
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Chicory
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- Drying plant established in Alexandria (near Cacadu).
- Opportunity for expansion into the Sundays River Valley and Makana Municipal areas.
- Used in a wide range of foodstuffs including coffee, pure chicory drinks, chocolates, breakfast foods and pet food.
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Honeybush Tea
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- South Africa produces 200 tons of honeybush tea per year.
- Growing export market.
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Pineapple
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- Ndlambe Municipal area is major producer of Pineapples.
- Labour intensive venture.
- High volume of dew may eliminate the need for irrigation.
- Pineapples are marketed as fresh produce, for further processing and as an export product.
- Pineapples are the third most important commercial tropical fruit crop in the world.
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Wool & Mohair
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- The dry Karoo interior is the centre of wool & mohair farming in the Eastern Cape, providing a high proportion of world mohair production.
- Wool & Mohair are mainly produced from Merino Sheep and Angora goats.
- Mohair is obtained from the Angora goat is regarded as the finest animal fibre available.
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Olives
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- Marginally suited to Cacadu.
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Deciduous Fruit
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- Langkloof Valley is home to apple and pear production.
- Production of apple in northern parts of Camdeboo Municipal area can yield between 30 and 50 tons per hectare.
- Production of pears in northern parts of Camdeboo Municipal area can yield between 15 and 30 tons per hectare.
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Citrus
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- Oranges are mainly produced in Kirkwood area of Sundays River Valley.
- Other areas marginally suited to citrus production under irrigation include northern parts of Camdeboo, Ikezi, Willowmore, Koukamma Municipality, Blue Crane Route and Makana.
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Pecan Nuts
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- All coastal areas of Cacadu are marginally suited for production of Pecan Nuts.
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Tourism
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- The main drive of the tourism industry in the District is its wide range of environmental assets.
- On the western region of the District is the indigenous Tsitsikamma Forest with giant yellowwoods, mountains, rivers, waterfalls, bridges and high cliffs.
- The Kouga region is characterized with beaches that are also used for international surfing competitions.
- On the R62 from N2 west of Humansdorp is the Langkloof Fruit Route, which goes past fruit orchards and protea-covered hills.
- Fynbos is the dominant vegetation type in this area and there are also rare mountain cedars, honeybush and indigenous herbal plants.
- The Sunday’s River Valley is home to the famous elephants of the Greater Addo Elephant National Park.
- It is also a major citrus and rose growing area, where the Addo Rose Festival is held in October each year.
- “The Valley of the Baboons” between Kouga and the Baviaans Mountains is the third largest nature conservation area in South Africa with its large variety of mammal species and freshwater fish species.
- Also forming part of the Baviaanskloof Wilderness Area are the 4 x 4 trails with gravel roads that cut across mountain peaks, rivers, valleys and plateau.
- Grahamstown is the heart of the Frontier Country, which has a turbulent history as the scene of nine Frontier Wars between the Xhosa and the British in the 19th Century.
- The Frontier Country Route provides a mixture of attractions, from old forts and battlefields, national monuments and museums, abundant wild life, an ethnic village and annual Arts & Culture, Science & Technology festivals.
- The District is also home to several worldclass private nature reserves and five star eco-tourism lodges.
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Forestry
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- Forestry is mainly restricted to the Kouga and Koukamma Municipal areas where predominantly pine, eucalyptus and indigenous forests are established.
- Forestry can be expanded to a limited extent in the Tsitsikamma and the areas around Grahamstown, but potential lies more in adding value to wood products and furniture enterprises.
Furniture production has high potential with existing forestry in Tsitsikamma and Grahamstown.
- High-value custom-made handcrafted furniture will create the need for a skills base, employment and a base for national and international sales.
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Agro-processing
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- There are approximately 1300 export farmers and 2200 small farmers who supply the local market with citrus in South Africa.
- South Africa contributes 14% of the world orange exports.
- The Eastern Cape Province contributed 26% of South African production.
- Valencia and navel oranges are the most popular types planted in South Africa, followed by grapefruit, mandarisn and lemons.
- Opportunities exist to expand processing of Ultra High Temperature (UHT) milk, milk powder and cheese.
- Opportunities also exist for new canning and juicing plants as well as prospects for the processing of wool & mohair.
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Eco-tourism and Game Farming
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- Agri-tourism has massive potential for growth.
- The Addo and Baviaanskloof World Heritage Sites and the Fish River Reserve are expanding and will increase the attraction of game reserves in the District.
- The whole of the Cacadu District is suited for Game Farming, and this is a huge attraction for national and international agri-tourists.
- The district has many diverse attractions and has already established tourism as a major economic activity.
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Mining
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- There is very minimal mining that is carried out in the District and it is mainly for construction material.
- There is river-sand mining in the Sunday’s River Valley as well as in the Kouga region.
- There are studies that are being carried out on the limestone deposit that is in the Makana area as well as investigations on the viability of Uranium mining in the Camdeboo area.
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Environmental Conservation
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- There are many opportunities in the District to integrate biodiversity management and conservation with sustainable development and the creation of sustainable livelihoods.
- Opportunities lie in the development of appropriate eco-tourism enterprises, consolidation and expansion of protected areas through links with communities and land owners.
- There are opportunities available to engage with production sectors to develop ecologically sustainable land use management practices, e.g. the Biodiversity and Citrus Initiative in the Gamtoos Valley.
- Sustainable harvesting / commercial cultivation of indigenous species for fuelwood, medicinal or cultural purposes, as well commercial ventures, e.g. honeybush tea, bee keeping, aloe tapping, indigenous flowers.
- Developing horticultural potential of indigenous species, e.g. pelargoniums, proteas and fynbos, indigenous trees, succulents.
- Alien vegetation clearing programmes linked to improved catchment management.
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Small, Micro and Medium-sized Enterprises (SMME’s)
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- Targets the district’s growth sectors with the aim of growing the quantity, improving the competiveness and productivity of SMME’s and large enterprises in these sectors, as well as increase the contribution of these sectors in terms of employment and contribution towards the local economy.
- The CDM has allocated nearly R1 million towards two interventions aimed boosting SMME’s in the district.
- This involves the development of the first district-wide SMME development strategy and rollout plan, and the establishment of three Small Enterprise Development Agency satellite offices in the district.
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South African economic information
Population: 48.7 Million
Area: 1 233 404km2
Major Cities: Cape Town (Legislative)
Pretoria (Administrative)
Bloemfontein (Juridical)
Major Economic Activities: Agro-processing
Automotive
Banking and financial services
Chemicals
Fishing
Food and beverage
General
ICT and electronics
Mining and minerals
Property
Tourism
Telecoms
Textiles
BPO
Growth Rate: GDP December 2008: R2,304 billion
GDP per capita: R47,310
GDP Growth 2008: 3.1%
Principal languages: Afrikaans, English, isiNdebele, isiXhosa, isiZulu, Sependi, Sesotho, Setswana, siSwati, Tshivenda and Xitsonga. English is the preferred business language.
International Airports: Cape Town International Airport
Durban International Airport
OR Tambo International Airport
Infrastructure: Transport
South Africa has a modern and well developed transport infrastructure. The roads are world-class. The air and rail networks are the largest on the continent. The transport sector has been highlighted by the government as a key contributor to South Africa's competitiveness in global markets. It is increasingly being seen a crucial engine for economic growth and social development.
Ports and shipping
Major shipping lanes pass along the South African coastline in the south Atlantic and Indian oceans. The state-owned Transnet National Ports Authority manages the country's ports, namely Richards Bay and Durban in KwaZulu-Natal, East London and Port Elizabeth in the Eastern Cape, and Mossel Bay, Cape Town and Saldanha in the Western Cape.
Roads
South Africa's total road network is about 754 000 kilometres, 9 600km of which are surfaced national roads. Around 2 400km of the roads in the country are toll roads.
While the Department of Transport is responsible for overall policy, road-building and maintenance is the responsibility of the South African National Roads Agency as well as the nine provinces and local governments.
Railways
South Africa has an extensive rail network - the 10th longest in the world - connecting with networks in the sub-Saharan region. State-owned Transnet Freight Rail is the largest railroad and heavy hauler in southern Africa, with about 22 000km of rail network, of which about 1 500km are heavy haul lines. The company's rail infrastructure, which connects the ports with the rest of South Africa, represents about 80% of Africa's total. Tourists and well-heeled passengers can travel on the Blue Train, one of the world's most famous luxury trains, while Shosholoza Meyl transports about four million passengers a year between the country's major cities.
Exchange rate: South African Rand (ZAR)
Sources: ECDC, SA Tourism, SA info, Stats SA, SA @ a Glance.
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R 9.3258
R 11.392
R 7.395
About Cacadu