Nevin, Tom, African Business
GATEWAY TO SOUTH AFRICA
South Africa is following an economic model set in motion a decade ago by KwaZulu-Natal. In that time, the province has completely altered its economy so that mining, once the economic bed-rock, counts for less, while manufacturing, tourism and agriculture - three major job-spinning industrial sectors - have moved to the fore. The national economy is following a similar course, creating employment in a more diverse and competitive economy in which no one sector predominates.
Single industry dominance was a straitjacket recognised long ago by KwaZulu-Natal, and the province moved decisively to do something about it.
A major stimulus was the region's vast labour pool - next to Gauteng, KwaZulu-Natal is the most densely populated - and job opportunities that had to be created through more labour-intensive economic activity.
Growth at twice the national rate
The result of that foresight now is that KwaZulu-Natal province has become the second largest contributor to South Africa's GDP and with a well-diversified economy and a strong manufacturing base. Its economy is growing at nearly double the rate of the national economy. Skills enhancement programmes have helped to move the productivity of workers to a level comparable to the national average, although entrants onto the job market still put pressure on the economy's capacity to employ them, resulting in a growing informal economic community.
The prospects for further growth and expansion of the KwaZulu-Natal economy are good. The provincial government, together with its national counterpart, is making efforts towards creating the environment and conditions conducive to economic development.
This is evidenced by the Provincial Growth and Development Strategy, the Spatial Development Plan and the Strategic Development Initiative (SDI) corridors.
Numerous sectoral policies have been formulated to guide development within the overall frameworks. The provincial government is also focussing its attention on good governance in an effort to make service delivery more efficient and effective.
The economy of the province, although it is growing slightly faster than its population, is struggling to provide employment opportunities for its relatively large population. Part of the problem stems from the fact that a large section of the population does not have the capacity - by way of training, education, managerial skills and financial resources - to participate meaningfully in the economy, either by selling their labour or as entrepreneurs.
The net effect is that personal incomes per capita in the province tend to be lower than in the national economy. Personal wealth is therefore lower while each income earner has to provide for more people than the national average. …