In the context of the Eastern Cape, the western portion, in which Cacadu District Municipality is situated, is relatively prosperous, notwithstanding high levels of poverty that are increasingly concentrated in the towns and settlements in the region. The district is ranked as the third largest economy within the Eastern Cape, with 9% of provincial value added.
The spatial structure of CDM is characterised by a large area with several small towns like Graaff Reinet, Jeffreys Bay, Somerset East, Grahamstown, Humansdorp and Port Alfred which constitute critical nodes in terms of retail and other services. The area´s economic hub Nelson Mandela Metro / Port Elizabeth - even though surrounded by CDM - is a separate municipal entity. The nine Local Municipalities (LM) differ widely in character and economic potential – in most cases there is limited economic activity and a low level of entrepreneurship. The Western part of CDM follows an own growth path mainly based on agriculture. Unlike Amathole DM, CDM never had former homeland areas but townships at the fringes of the towns do exist.