Honourable Speaker
Members of the Provincial Legislature
Representatives of our strategic partners
The People of Gauteng
Introduction
It is my privilege, indeed, to present the 2012 Provincial Economic Review and Outlook (PERO) publication to the Gauteng Legislature. The publication provides economic analysis on the global and national scale and outlines the structural make-up of the provincial economy through sectoral analysis, amongst other things, provides an analysis of the province’s economic performance and contribution to national output.
This is the sixth year that the Gauteng Provincial Treasury (GPT) has produced this publication. During this period, the quality of the final product has improved significantly, demonstrating GPT’s ability to take raw data, interpret it, package and present it in a simple language that even ordinary citizens can understand.
This is what makes this document such a valuable source of information. That is why I would like to urge everyone, even ordinary citizens and civil society to make use of PERO to track economic progress of the province.
PERO is an annual publication that forms part of documents produced by GPT to inform policy decisions and budget allocation. Other publications are the Socio Economic Review and Outlook (SERO) and the Medium Term Budget Policy Statement (MTBPS).
Collectively these publications provide the Executive (Gauteng Provincial Government) and the Legislative (Gauteng Legislature) arms of government with the necessary insight into the economic and socio-economic issues of the province.
These in turn enabling these two structures to make informed decisions with regards to policy interventions and the efficient allocation of resources to fund various priorities aimed at improving the living conditions of the People of Gauteng.
The 2012 PERO is divided into four chapters of;
- Global and National Economic Review and Outlook
- Gauteng Economic Review and Outlook
- Economic Overview of the Agricultural Sector, and
- Labour Overview
Economic Outlook
The global economy is slowly emerging from the deepest recession in more than 30 years. This recovery can best be described as sluggish, hesitant and fragile depending, of course, on which part of the world you are looking at.
The developed economies, driven by the double dip recession in the European Union and uncertainties in the economic prospects of the US, will experience growth rates of 1. 4% this year and possibly even higher next year.
However economic growth in the developing economies will be at 5% to 6%, suggesting that the impact of the Euro zone debt crisis is minimal when compared to advanced economies.
In 2011, South Africa experienced the smallest Gross Domestic Product (GDP) growth rate of 3.1% within the Brazil, Russia, India, China and South Africa (BRICS) grouping. It also has the smallest population of all the other BRICS countries and has an average rating for infrastructure within the grouping.
As the Finance Minister, Honourable Pravin Gordhan noted during the tabling of the Medium Term Budget Policy Statement last month, this “will be supported by an increased focus on modern tertiary sector activities, the prudent management of the budget deficit by the government, and falling household debt”.
Therefore, our country’s economy is expected to grow by 2.5% this year, rising to 3% next year before reaching 4.1% in 2015%.
The Highlights
So what does the 2012 Provincial Economic Review and Outlook tell us about the structural make up of our economy, performance and contribution to national output?
It says the following:
- Gauteng remains the largest contributor to the country’s gross domestic product, generating 35.6% of the national output
- The Gross Domestic Product by Region (GDP-R) of the province was R674.9 billion last year growing at the rate of 3.2%
- The City of Johannesburg has the largest economy of the Gauteng municipalities; its GDP-R was R313 billion in 2011 and growing at 4%
- The City of Tshwane has the fastest growing economy of the municipalities, at 4.4% growth with a total GDP-R of R184 billion
- Ekurhuleni has a GDP-R of R128 billion, with a growth of 3%, in 2011
- Gauteng accounts for 68% of all exports from the country and 61.4% of imports
- The province experienced a surplus in the trade account from 2009 to 2011; this surplus amounted to R24.3 billion last year
- China is the biggest trading partner of the province; it was the destination for just under 15% of exports from Gauteng and the source of just over 15% of imports to the province.
The tertiary sector continues its dominance of the province’s economy, contributing 71.1% to the Gross Value Added by Region (GVA-R) of Gauteng. The secondary sector contributed 24.3% to the economy and the primary sector’s contribution was 4.7%.
The economic contribution of the agricultural sector has been declining both nationally and provincially. In the province, the sub-sector contributed 0.4% in 2011. Employment by the sub-sector has also been declining, ranging between 50,000 and 42,750 in 2002 and 2011 for the province. However, employment in agro-processing has increased from 62,912 to 86,768 in the same period. The main agricultural products in the province, amongst others are, maize, ground nuts, sunflower and cotton.
However, our province like the rest of South Africa is still facing the challenge of high unemployment rate. This is inspite of the fact that in the second quarter of 2012, the unemployment rate had decreased to 24.9% from 25.2% in the first quarter. In the same period, the number of people who were employed grew by 0.2% only. The province has a high share of the population that is not economically active, at 10.2% in the second quarter of 2012.
The objective of PERO is to tell us a story of where we are so that we could determine where we want to be in future. To do that we will need to engage with facts and figures, debate what is our shared vision for the future and then work on designing/reviewing our plans and policies that will ensure that we arrive at the destination as envisaged in our vision. That destination is a better life for all of our people.
I therefore urge the people of Gauteng to get hold of the document and start engaging with the findings. Let me congratulate Head of Department Ms. Nomfundo Tshabalala and the team for the hard work that they put in developing this insightful publication. Your work is appreciated.
Thank you.
