THE city with SA’s most positive growth story is Rustenburg in the North West, which in recent years has outstripped the growth of all other urban centres.
A regional analysis of gross domestic product (GDP) growth by economics consultancy IHS Global Insight, published in the South African Institute of Race Relations (SAIRR) survey for 2010-11, shows that Rustenburg — the belt where the richest platinum deposits are located — grew at 3,9% during 2010. National GDP growth for the same period was 2,8%.
Rustenburg’s growth for last year could come in at 6%, says IHS Global Insight senior analyst David Wilson. It is forecast to reach 4% this year.
Mr Wilson says there is “definitely a good growth story in Rustenburg … it is packed with platinum mines and it receives quite a lot of tourism, due to the presence of Sun City”.
During 2010, the city was outdone only by the Nelson Mandela Bay municipality, which grew at 4,2%. Johannesburg and Cape Town grew at 2,4% and 2%.
Nelson Mandela Bay’s strong showing was mainly due to the recovery in the automotive sector, which in 2009 had suffered a huge decrease.
“In the case of Nelson Mandela Bay, last year’s growth shows the picking up in the automobile sector. It is more of a base effect and not an illustration that the city has a fundamental advantage. It is just catching up,” says Mr Wilson.
In Rustenburg, on the other hand, growth “was not a short-term thing”.
This is demonstrated by declining unemployment and poverty over the past 10 years.
Since 2001, unemployment in Rustenburg has come down from 16,5% to 10% in 2010, says Mr Wilson. The number of people living in poverty had also marginally declined, from 24,8% to 24,4% in the 14 years between 1996 and 2010.
But while the North West city has a good news story to tell, the outlook looks bleak for the former mining and manufacturing areas on the Rand.
The West Rand grew at 2,2% during 2010 and Vereeniging at 3,1%. However, per capita GDP growth in these areas is very weak. In the case of the West Rand, GDP per capita fell between 1996 and 2010.
Forecasts show that the Rand will not easily recover, says Mr Wilson. “There was a very sharp drop in all manufacturing activity during the recession, which doesn’t recover until about 2013-14. The West Rand, for example, has two problems: the decline of mining and the decline of manufacturing,” he says.
The analysis of urban economies also makes the case for viewing cities as engines of growth — an idea that has yet to gain serious traction among government policy makers, who favour the idea that growth can and should be directed to where it is needed.
IHS Global Insight forecasts that GDP growth for SA as a whole this year will be 2,9%. This is more conservative than many other forecasts, with many commercial banks forecasting growth of 3,1%-3,6%, says the SAIRR survey.
Cities are expected to grow well above the average at about 3,5%, while there are some non-urban areas that IHS Global Insight forecasts will experience “massive negative growth”.
The success of Rustenburg’s growth is further underlined by the relative changes in poverty levels in the cities. While the number of people living in poverty in Rustenburg declined marginally, in many other cities it increased significantly.
For example, the percentage of people living in poverty between 1996 and 2010 increased from 18,4% to 21,5% in Johannesburg. In the depressed areas of the Rand, the percentage of those living in poverty rocketed to 44,9% from 29,6% on the West Rand, and in Vereeniging to 32,6% from 21,6% over the same period.
Article source: http://www.businessday.co.za/articles/Content.aspx?id=162940