Municipality: Cacadu District Municipality

Description

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.

Strengths

Economic drivers are the primary sector (predominantly agriculture with 16% of SA’s milk produced in the area) which in 2004 contributed 12.2% of the District’s gross GGP. The secondary sector (predominantly manufacturing and construction) accounted for 16% of economic output while the tertiary sector contributed over 70% of the GGP. This sector is dominated by general government services such as public administration.

Weaknesses

the seasonality of agriculture related jobs, water problems and lack of a “critical mass” of people and buying power hamper economic development. Also, conversion of farms to game reserves raises concern about food security and the future perspective of agriculture in general.

An indicator for the high level of poverty in CDM is that 44% of households are living below the poverty line (R800 per month per household).  More than a third of household income (37.4%) in 2004 was unearned income, which includes social grants and other government transfers etc.