Development financier the Eastern Cape Development Corporation (ECDC) says the province is showing signs of economic recovery, characterised by increased consumption levels which were last recorded before the 2008 economic slump in the world economy.

Gross domestic product (GDP) growth in the province is expected to be 4.2% this year, with fixed domestic expenditure gradually expanding on infrastructure projects, such as the R55-million upgrade of Mthatha Airport, the South African National Roads Agency’s plans to upgrade 33.7 km of the N2 between the Mtunzini toll plaza and Empangeni, and other initiatives in rail, dams, roads and schools.

The ECDC plans to help develop and finance projects to revive agricultural infrastructure and to increase primary production, the rapid movement of goods and services to the markets. It also plans to take advantage of natural land endowments and the favourable climate conditions, says ECDC CE Sitembele Mase.

But Democratic Alliance provincial legislature representative John Cupido tells Engineering News that the province will not be able to rely heavily on agricultural infrastructure improvements alone to achieve a 4.2% GDP growth rate.

“Agriculture is a contributor, but manufacturing is a more significant contributor in terms of growth. “The provincial government needs to drive support for labour- intensive manufacturing industries and for the agriculture sector to increase the province’s growth,” he says.

Mase acknowledges that the recovery comes amid a negative economic outlook for South Africa, which has a direct bearing on the province – particularly on the protracted instability in the mining and agriculture sectors.

The farmworker strikes in the Western Cape could have a damaging effect on the prospects of the Eastern Cape economy in terms of job losses and increasing unemployment.

To help sustain the current growth path of the province, the ECDC has invested about R44-million since 2008 in new growth sectors. Some of these relate to the revival of the pineapple, processing and natural fibres industries.

“The financier has invested in the blueberry corridor production and beneficiation and in the cassava pilot projects and research. It has also invested in research on the bamboo industry and its potential catalytic beneficial value for biofuel, construction, energy and food security,” Mase says.

These investments assist in offloading the burden from the automotive and manufacturing industries to stabilise the automotive industry, ensure that it receives support and contribute to the provincial economy without having to consider other social pressures.

Further, the ECDC is taking advantage of the economic policy framework to rethink its property investment to leverage on the infrastructure investment programmes. The Eastern Cape must accelerate the development of identified natural endowments, such as its coastline and heritage to boost the tourism industry and add to its GDP.

“The ECDC has researched a list of projects worth more than R750 million that have potential economic benefits. “This bears testimony to the reorientation of entrepreneurship into new growth sectors of the Eastern Cape economy, which can create jobs and contribute to GDP,” Mase concludes.