WSDP: MODULE 3
TOPIC 4: SOCIO-ECONOMIC
4. SOCIO-ECONOMIC
4.1. Current Population and growth over the next five years
In 2011 the total population of Cape Town was estimated to be approximately 3.82 million
(City of Cape Town Stats. In terms of population trends, the population of Cape Town grew
by 36.4% between October 1996 and March 2007 and by 20.9% between October 2001 and
March 2007. In 2010 the estimated annual population growth was 3% (Demographic and
Socio-economic Characteristics of Cape Town report of April 2011).
Source: (Demographic and Socio-economic Characteristics of Cape Town report of April 2011).
The population of Cape Town is projected to reach 4 million in 2016 and 4.3 million by 2031.
Figure 1: Projected Population Growth for the City of Cape Town
Source: (Demographic and Socio-economic Characteristics of Cape Town report of April 2011).
The population of Cape Town is projected to reach 4 million in 2016 and 4.3 million by 2031.
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4.2. Economic Trends
4.2.1. Future trends and goals (economics)
Economic sectors, GGP contribution and employment
Being the second-largest economic contributor in SA, it is only expected that international
trade and investment is a component of Cape Town's economy.
There have been changes in its composition of export basket, the most noticeable being the
increase in agriculture & hunting products, and the decrease in fuel, petroleum, chemical &
rubber products. Cape Town's import basket has also experienced changes, the most
noticeable being the doubling of fuel, petroleum, chemical & rubber products. Cape Town's
import-value have always exceeded its export-value, its net trade balance (exports less
imports) growing from -R9.8 billion in 2000 to -R46.6 billion in 2010.
FDI inflows have become more diversified. Significant changes illustrate changes within the
economy. From being concentrated in software & IT services and warehousing & storage
sectors in 2003, the greatest proportion of current FDI is channelled to the hotels & tourism
sector.
Cape Town, as with most of South Africa, is faced with high levels of unemployment. But the
problem of unemployment cannot be tackled in an isolated manner. Whilst the value of total
employment has increased during the analysis period, unemployment has also increased.
This is as a result of an increasing labour force (economically active population / jobseekers) i.e. entrants into the labour market. It is thus important to take cognisance of
current levels of unemployment as well as a growing population, specifically the working
aged (15-64 years), as job creation would have to accommodate for both.
The increasing unemployment rate can be further explained or monitored by the respective
growth rates. Currently, Cape Town's labour force is increasing at a higher rate (2.71%) than
its employment (1.95%), illustrating that not sufficient amounts of jobs is being created
annually. This is evident in the even higher growth rate of unemployment (6.11%) (FactSheet, Cape Town’s Economy, August 2011).
In order to address the issue of unemployment, it is important to understand the economy
and its needs. This understanding will inform the labour market and aid in reaching a point
close to equilibrium between the supply and demand thereof.
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During the analysis period, the structure of labour demand in Cape Town has not changed
significantly. Total employment remains dominated by the demand for skilled labour in the
formal sector, with a growing increase. The economy is also demanding fewer semi- and
unskilled labour, illustrated by both the decline in its value and contribution to total
employment, as well as its negative growth rate. The growing importance of the informal
sector is also evident in its increase to total employment levels and the highest average
annual growth rate.
Fostering economic growth whilst tackling problems such as unemployment is an inheritant
task within South Africa and its cities. With technological advancements ever-increasing,
there is the added complexity of striking a balance between the utilisation thereof to
maximise efficiency with providing employment opportunities to the increasing population.
Data illustrate that, not only has capital formation in Cape Town increased, but it has done
so often at rates much higher than the growth in employment levels. This suggests that
Cape Town is on a capital-intensive growth path - a concern when unemployment rates
remain high.
4.2.2. Strategic gap analysis (economics)
The water demand forecasts a factor of economic growth.
The City’s ability to keep pace with the need to upgrade and extend the water and
wastewater infrastructure is currently under severe strain. Increased economic growth will
further exacerbate this.
Replacement and upgrading of infrastructure to provide for demand (upgrade and
construction of WWTW).
4.2.3. Implementation and strategies
Water and Sanitation tariffs are to increase substantially over the next 5 year to ensure that
the necessary infrastructure can be upgraded and extended. At the same time the WC/WDM
Strategy will focus on reducing water demands. This will assist in postponing the
implementation of new water resource schemes and reduce the hydraulic loading on
wastewater treatment works.
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