A study on the economic state of the City of Johannesburg’s (CoJ’s) economy has revealed lagging growth and a lack of diversification as the city struggles to return to prefinancial crisis growth levels.

The ‘CoJ Economic Overview 2013: A Review of the State of the Economy and Other Key Indicators’, undertaken by the Human Sciences Research Council’s (HSRC’s) Economic Performance and Development (EPD) research unit, shows that, during the 2008/9 recession, South Africa and the CoJ both recorded negative growth rates of 1.3% and 1.5% respectively.

After “what appeared to be a modest recovery” post-2009, with growth levels reaching 3.4% and 3.7% in 2010 and 2011 respectively, forecast growth for the city for the next few years remained subdued.

The CoJ-commissioned report indicates the resumption of some growth in 2014, with an expected rate of 2.8%, which will quicken to growth rates of 4.2% and 5.2% in 2015 and 2016 respectively.

Although the city’s growth remained “relatively superior” to both the national and provincial levels, it had failed to grow its contribution to the Gauteng province’s growth beyond 48% and to the South African economy beyond 16%, HSRC EDP researcher Dr Selma Karuaihe said last week.

However, presenting the findings of the study at HSRC’s headquarters in Pretoria, she said the city’s contribution to the national economy was so significant that the CoJ’s lack- lustre performance would have “significant implications” nationally.

HSRC chief researcher Stewart Ngandu said the growth of the country’s most populated city, which was home to more than four-million, had fallen short of the National Development Plan’s (NDP’s) targeted growth rate, which did not augur well for the Vision 2030 ambitions.

“The NDP estimates that for South Africa to achieve full employment, it needs to create about 11-million more jobs over the next 20 years, which required economic growth of 5.4% on average every year,” he explained.

This meant that the city needed to achieve the same growth that it experienced at the height of the commodities boom between 2004 and 2007, which saw growth levels peaking at 6.5%.

The findings of the study show a lack of diversification of the city’s economy, which is concentrated around a few dominant sectors, such as finance, manufacturing, trade and community services.