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OECD Territorial Reviews: Cape Town, South Africa 2008

image of OECD Territorial Reviews: Cape Town, South Africa 2008

The Cape Town city-region, which is the second-largest area in South Africa (4 million inhabitants), reflects the national challenge of creating new economic opportunities while correcting past inequities. Since the end of the apartheid system, Cape Town has benefited from macroeconomic stabilisation and has outpaced the national average growth rate. It has both modernised its traditional strengths in port logistics and developed innovative sectors in tourism, agro-food processing, viticulture, financial and business services. However, 22% of the population is unemployed and 38% of residents live below the poverty line. This report identifies the key missing collective goods that could both create externalities for firms and foster a more equitable distribution. It provides a platform for the development of a forward-looking, cross-cutting regional development strategy and proposes new "second generation" governance reforms to consolidate previous achievements and respond to emerging obstacles.

English

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Assessment and Recommendations

The socio-economic conditions in the Cape Town city-region are in many ways more favourable now than at any time since apartheid was abolished fourteen years ago. As one of the most economically powerful metropolitan areas on the continent, Cape Town, with its 4 million inhabitants, has benefited from South Africa’s macroeconomic stabilisation and its re-entrance into international markets. After a sluggish period in the 1990s, its average annual growth rate reached 5.5% in 2005. The region has modernised its traditional strengths in port logistics and trans-shipment and has developed innovative sectors in tourism, agro-food processing, viticulture and finance. The regional GDP per capita is USD 15 250, or 40% more than the national average, roughly equal to that of OECD city-regions like Naples or Mexico City. Though the Johannesburg-Gauteng city-region still dominates the overall national economy (with 31% of the national population and 33% of national GDP), Cape Town has been the only major city-region to increase its share of national output. The tenfold growth of population over the past 50 years is testament to its draw as the secondrichest economy in South Africa, with the lowest unemployment rate and the best standards of health, education and housing in the country.

English

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