The economy is well diversified with wholesale and retail trade, primary agriculture and agro-processing, fishing and aquaculture, and financial and business services making significant contributions to the local economy. The leading sectors in Cape Agulhas are agriculture and agro-processing, eco-tourism, fishing and mari-culture, financial and professional services and the construction industry.
Diversification of the agricultural sector has led to substantial improvement and growth in exports of wine products, olives, and cut flowers in Cape Agulhas. Overall, the tourism industry is taking a strong lead in the various sectors in Cape Agulhas. The preservation of the natural resources and conservation of sensitive areas plays a key role in eco-tourism and includes places like De Hoop Nature Reserve, the coastline, Agulhas Plains and various nature conservancies.
Mari-culture and the processing of marine products like abalone, mussels, and seaweed, has the potential to become a very lucrative industry for the area. This provides valuable natural resources which can be harvested and processed for commercial use and can be converted into a financially viable economic opportunity with multiple business ventures. The relatively slow-paced Cape Agulhas economy still has a lot of potential for further expansion of the agro-processing sector, eco-tourism, and small-scale manufacturing businesses to contribute to the growth of bigger businesses and the leading sectors. Unemployment is fortunately not highly dependent on seasonality compared to other regions in the Overberg and stays fairly stable through out the year and is estimated between 14-18%. According to the socio-economic survey that has been conducted randomly by Urban Econ in 2008, 15.8% of households in Cape Agulhas have no income and a significant 48% of households survive only on social grants from the Department of Social Development and SASSA.
In general, the strengths for the development of the local economy are:
- One of the biggest producers of agricultural products in the country and the continent;
- Sought after Tourism destination;
- Abundance of natural resources and picturesque natural features;
- Relatively stable political environment;
- Strong entrepreneurial culture;
- Good infrastructure;
- Availability of bulk basic services.