Cape Town growth prospects

Posted On Tuesday, 28 August 2001 03:01 Published by
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ECONOMIC growth in Cape Town will continue to outstrip the national average, with a growth rate of 4,4 percent per annum forecast between 2005 and 2010.

ECONOMIC growth in Cape Town will continue to outstrip the national average, with a growth rate of 4,4 percent per annum forecast between 2005 and 2010.
But achieving this impressive growth rate will depend largely on the efficient and effective
management of the City, including the implementation of economic development strategies through
public-private sector partnerships.
These are among the conclusions of an in-depth report prepared by the Economic Development
Department of the City of Cape Town Council on 'Cape Town's Economy: Current Trends and Future
Sources for the report include the Department of Finance, the Reserve Bank, specialist studies at
the University of Cape Town and information obtained from 30-thousand businesses registered as levy
payers on the database of the former Western Cape Regional Services Council.
The report - the first to detail key factors contributing to sustainable economic growth and job
creation in Cape Town - is intended as an important guide for future investment and the direction
of resources.
Trends identified in the report will be used as a basis to create a globally competitive economy
and reduce poverty.
Positive points to emerge from the study include the following:
Cape Town's economy grew at an average annual real rate of 2,6% a year from 1991 to 2000, compared
to the national average of 1,8% in the same period
After a short cyclical downturn, the economy of the city is currently experiencing an upturn, and
an average growth rate of 4% per annum is considered realistic over the next ten years compared
with the forecast national average of 3,6%
A large increase in new business registrations is reported (up by 33% from 1999 to 2000), together
with several large capital projects, the growth of e-commerce in local business, a booming tourism
industry and an improving trade balance
Cape Town has a competitive advantage over other centres, especially in trade and catering,
manufacturing, construction, and niche industries like film and media, fashion, jewelry, boat
building, bio-technology, health products and industries involved in natural gas extraction
The population will continue its slower growth trend, from 3% in the late 1990s to 1,2% by 2010
Some 95% of businesses in Cape Town are small, medium and micro enterprises and they contribute 50%
of total output.
While the economic prospects for Cape Town are considered excellent, a number of disturbing trends
- most of them not unique to the city - have emerged from the study.
Some concerns:
Labour force skills, while stronger than in other cities, require major attention. There are
350-thousand illiterate adults in the city and the figure is growing by over 15-thousand annually
Unemployment is at least 18% of the workforce (240-thousand) and is likely to reach 21% by 2005
An economic growth rate of 7% a year is needed to absorb all the new entrants into the job market
HIV-Aids related deaths are expected to increase from about six thousand in 2000 to a peak of
40-thousand a year in 2015.

Publisher: Cape Business News
Source: Cape Business News

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