Publications
Partners
KwaZulu-Natal (KZN) is the third smallest province by land size but is the second largest contributor (about 16%) to the South African economy after Gauteng. KZN is home to the Durban and Richards Bay ports, which, being the closest to Gauteng, handle almost 60% of South Africa’s cargo. KZN is also an important agricultural contributor, producing 50% of all timber used in the country and accounting for a significant percentage of the country's wood exports, as well as sugar cane and dairy exports.
Just as KZN’s economy was starting to recover from the Covid-19-induced contraction of 6,4% in 2020, which was made worse by the civil unrest in July last year, the floods came. This disaster displaced close to 40 000 people and caused untold damage to homes and businesses across eThekwini. The Durban Chamber of Commerce and Industry estimates that the floods have cost the city's economy R737 million so far, and KZN Premier Sihle Zikalala says the cost of rebuilding and repairing infrastructure will be approximately R12 billion.
Adding to these woes, unemployment – especially among the youth – is a major concern. KZN is home to about 11,5 million people, which is about 19% of the national population. The official unemployment rate for the province is 32,4%. However, under the expanded definition of unemployment, this jumps to 48,7%. The most concerning statistic, however, is the approximately 59,3% unemployed young people between 15 and 34 years old¹.
The Eastern Cape is home to over 6,6 million people. Its real gross domestic product (GDP) stands at R230,3 billion, which is 8% of our national GDP, making the Eastern Cape the fourth largest regional economy in South Africa, followed by Limpopo and Mpumalanga. The Eastern Cape is the poorest province in South Africa, with around 880 000 mostly rural people living in poverty. The province also has the highest unemployment rate (45%) in the country, with the expanded definition of unemployment putting this figure at 53,2%.
The economy in the Eastern Cape is driven by government, so part of the challenge is the lack of a diversified provincial economy to generate growth and jobs. However, as with KZN, there are areas of opportunity and development in both provinces to combat unemployment.
In KZN R18,6 billion has been allocated for infrastructure development that is driven by the provincial government. This investment will hopefully help to address challenges at the ports and optimise their functionality, as cargo ships are regularly diverted to Mozambique.
The Dube Tradeport and Richards Bay industrial development zones (IDZ) are equally key drivers of the KZN economy and opportunities for growth, together with the development of the South Durban automotive sector and the aerotropolis around King Shaka International Airport. Other potential growth areas in KZN include agriculture, manufacturing, tourism and hospitality, as well as imports and exports, as Durban is the largest national port.
IDZ zones in the Eastern Cape are also taking the lead in growing the economy. The provincial government is hoping to sign up new investments worth R460 million in the 2022/2023 financial year into the Coega Special Economic Zone, which is expected to create more than 20 000 new job opportunities. Provincial finance MEC Mlungisi Mvoko announced that R91 million would be allocated to the Automotive Industry Development Centre to support small businesses in the sector, while the East London IDZ has recently attracted R4,4 billion investment in the information and communications technology (ICT) and automotive sectors. The Coega Development Corporation has been tasked with coordinating much-needed infrastructure delivery programmes in the province, while agriculture – particularly aquaculture – tourism and hospitality, government and franchising are also identified as growth sectors in the province.
So, while both provinces are going through a tough time, there is renewed hope for growth. At Nedbank, we use our financial expertise to do good, and our philosophy is to partner with our clients to grow their businesses and achieve their financial goals, while carefully taking macroeconomic ups and downs into account. We’re always seeking ways to support our clients, which ultimately helps to build a stronger, more resilient economy to the benefit of all.
We offer innovative financial solutions and advisory services to private clients, small businesses, medium-sized businesses, agribusinesses, municipalities and schools in and around South Africa, including those geared towards sustainability – with financing solutions for water, energy and recycling – and transformation, particularly in the fuel franchising sector.
But we believe our role goes beyond simply providing finance, so we use our banking expertise and understanding of each sector to advise our clients, and to package funding solutions that will not only meet their needs but also help them achieve the business success they desire.
To find out more about how Nedbank can help your business thrive in KZN and the Eastern Cape, please contact Siphamandla Ndhlovu at SiphamandlaN@Nedbank.co.za or contact our team at business@nedbank.co.za or smallbusinessservices@nedbank.co.za.
Siphamandla Ndhlovu is Nedbank’s Executive for Relationship and Business Banking for KZN and the Eastern Cape. He holds a BCom (Hons) Accounting degree from the University of KZN and completed his commercial articles with PwC. Further studies include the international Executive Development Programme with Wits Business School and Cass Business School (London), Strategic Management in Banking course with INSEAD, and Executive Business Transformation with Duke University. Siphamandla has been with Nedbank for 18 years.
¹ KZN youth unemployment figure for Q3 2021.
This post and content is sponsored, written and provided by Nedbank.
