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Johannesburg – Tourism in the Eastern Cape is being seriously neglected and the ripple effect on the province's economy is becoming increasingly evident.
After a seven-month-long negative tourism figure,
Economists.co.za economist Mike Schüssler, the compiler of the Sake24 and BoE
Private Clients’ Eastern Cape Barometer, says a serious focus on this industry
is needed.
Taking the province’s economic performance for the past
three months into account, Schüssler is positive, but year on year the Eastern
Cape has performed negatively.
“The Eastern Cape is to an extent our weakest province.” He
says the province is “slowly creeping forward”.
After long droughts the agriculture sector is beginning to
turn around. Country districts have renewed hope, he says.
Motor manufacturing is certainly the economic heartbeat of
the Eastern Cape, but it is currently on “a road to nowhere”.
There is nevertheless still heavy dependence on the
industry.
Schüssler says that should something go awry in this sector,
it would pull the rug from under the province’s economy.
“In difficult times this is where the Eastern Cape suffers.”
He describes the motor manufacturing industry as a “big fish in a small pond”.
If we look at vehicle exports, he says, we don't have the
capacity to produce greater volumes. We are far from major markets and our
factories are rather small.
Globally, 50m vehicles are manufactured each year. The
Eastern Cape exports some 100 000 (and South Africa as a whole 200 000)
vehicles a year.” This constrains competition with the rest of the world.
Schüssler says the Eastern Cape therefore earnestly needs to
shift its focus and concentrate largely on tourism.
The Eastern Cape's tourism figures are pulling down national
tourism numbers, he believes.
Over the past festive season Eastern Cape tourism, Schüssler
says, fared poorly despite existing tourist attractions.
“Hotel and restaurant figures were down. The Eastern Cape
appears to have had no tourists in December. Perhaps people cut down on holiday
spending.”
Fewer tourists mean lower retail sales, lower petrol sales
and even a weaker housing market.
“The province needs to speed up marketing itself as a
tourism destination.”
The Eastern Cape construction industry, says Schüssler, is
experiencing a slump.
“Construction is negative as the housing market has not yet
recovered. This is the industry’s deepest depression in three decades. The size
of the province’s construction industry is back where it was in 2004, when it
was on the way up.”
One of the concerning consequences of the stranglehold on the construction industry is the jobs that are lost.
“The property industry is therefore critical.”
Civil indebtedness cases rose each month in 2011. According to Schüssler, this is disappointing. “People are still in difficulties.”
On a positive note, recent retail sales look “reasonable”
and volumes at Eastern Cape ports looked good.
At the end of last year container handling at the Ngqura
harbour outside Port Elizabeth exceeded global standards, according to Transnet.
The acceptable standard is for cranes to handle 26 to 30
containers per hour, and Ngqura handled 34 per hour. This was its best
performance to date.
- Sake24
For business news in Afrikaans, go to Sake24.com.
For more news on the Sake24/BoE Private Clients barometers, go to www.fin24.com/barometer.
