Economic Transformation

Economic Transformation is a slogan of our time. The content in this section explores the shift from intentions to transform the economy, to the actions that are being undertaken.

Two thirds of South African Households Are Poor

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Statistics South Africa released it’s annual report titled “Selected development indicators” yesterday, 3 May 2011. The report provides important data on government performance on its programmes. One of the most important descriptors is an attempt to measure the extent of poverty in South Africa. The report defines the poor as households with a monthly expenditure of R 2500-00 of below. This measure shows that two-thirds of South African’s households are poor.
Based on the data available, the calculations for each province was undertaken, which shows variances across the provinces. These are represented in the table below:

IndicatorsTotal Number of HouseholdsNumber of households classified as poor using household monthly expenditure of below R2500-00 as the cut-off% of households with monthly expenditure below R 2500-00
Western Cape158173246.3
Gauteng3826197751.7
South Africa14756978866.3
Free State90761667.9
North West100670970.5
Northern Cape32723170.6
Mpuma-langa105075371.7
KwaZulu-Natal2802206573.7
Eastern Cape1820143078.6
Limpopo1437127588.7

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Infrastructure Investment Catalyses Social Accord

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Photo: Hannelie Coetzee, MediaClubSouthAfrica.com

Towards an infrastructure investment social accord

In the last session of the second annual Economic Development Programme conference hosted by the Economic Development Department, a series of remarkable commitments emerged from business and labour leaders, on government’s Infrastructure Investment Plan.
The session chair and convener of the Economic Development Conference, Minister Ebrahim Patel posed a series of questions to the panelists focused around commitment to the plan and the commitments sectors were willing to make . The panel consisted of:

  •  Bobby Godsell, President, Business Leadership South Africa
  • Zwelinvima Vavi, General Secretary, Congress of South African Trade Unions,
  • Ndaba Ntsele, President, Black Business Council

Bobby Godsell representing Business Leadership South Africa argued that the long term nature of the infrastructure investment framework provided the space for business to think about the next twenty years as opposed to the next quarter. In turn, he argued that the private sector should “seek a realistic and sensible” rate of return. The rate of return he ventured would be a real return, but would be in single digits.

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BRICS – Total Entrepreneurial Activity

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Brics - Entrepreneurial activity bubble map

The Global Entrepreneurship Monitor (GEM) provides a basis for comparing entrepreneurial activity, aspirations and intentions globally. The chart below shows the Total early-stage Entrepreneurial Activity (TEA). TEA is defined as

TEA = Percentage of 18-64 population who are either a nascent entrepreneur or owner-manager of a new business

The data shows that there is a gap between South Africa which is has moderate economic growth, and Brazil, India and China which have significantly higher economic growth rates in terms of Total Entrepreneurial Activity. (Curiously, Russia has high growth rates but low TEA rate). The data however suggests that South Africa may be catching up, with these high growth countries.

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