Turning the Eastern Cape Around

The Eastern Cape has the third-largest population but it is South Africa’s poorest province, partly due to skewed economic development. However, the province also holds enormous opportunities, not least of which is in the wind energy sector.

- Andile Ntingi

During Thabo Mbeki’s tumultuous nine-year reign as South African president, tens of billions of rand in infrastructure and industrial investment poured into the Eastern Cape economy, as Mbeki attempted to slam the brakes on the province’s declining contribution to the country’s economy.

The Eastern Cape’s contribution to GDP dropped to 7.6% in 2014 from 8.2% in 1995, but the province has managed to hang on to its spot as the fourth-biggest contributor to the national economy, behind Gauteng (34.3%), KwaZulu-Natal (16.1%), and the Western Cape (13.6%).

The Eastern Cape is characterised by skewed economic development akin to that of Germany before the fall of the Berlin Wall in 1989.The communist eastern part of the country (formerly East Germany) was underdeveloped and poor, while the capitalist western section (formerly West Germany) was highly industrialised and prosperous.

In the case of the Eastern Cape, the eastern part of the province, largely made up of the rural former Transkei homeland, is still lagging economically behind the industrialised western section of the province. Under Mbeki’s rule, cut short in 2008 when the ANC unceremoniously axed him, the province received billions of rand to build two industrial development zones (IDZs) – one in East London and one at Coega, near Port Elizabeth.

The province’s western portion is an important motor vehicle manufacturing hub, producing about 51% of South Africa’s motor exports and accounting for 30% of manufacturing employment in the Eastern Cape.

Industrialising the east