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PROVINCE OF KWAZULU-NATAL Socio-Economic Review and Outlook 2020/2021 KwaZulu-Natal Provincial Government
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PROVINCE OF KWAZULU-NATAL
Socio-Economic Review and Outlook
2020/2021
KwaZulu-Natal Provincial Government
ISBN: ISBN No. 1-920041-49-4
To obtain further copies of this document, please contact: Provincial Treasury 5th Floor Treasury House 145 Chief Albert Luthuli Road 3201 P.O. Box 3613 Pietermaritzburg 3200 Tel: +27 (0) 33 – 897 4444 Fax: +27 (0) 33 – 897 4580
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Table of Contents
Executive Summary
Chapter 1: Introduction .................................................................................................................... 1
Chapter 2: Demographic Profile ...................................................................................................... 3
2.1 Introduction…………………………………………………………………………………... 3
2.2 Global population growth ............................................................................................. 4
2.3 South African population ............................................................................................. 7
2.4 Population growth rate……………………………………………………………… .......... 8
2.4.1 Population distribution by age and gender ............................................................... 8
2.4.2 Population by race……………………………………………………………………… ... 9
2.5 Fertility, mortality, life expectancy and migration……………………………… .............. 10
2.5.1 Fertility…………………………………………………………………………….. ............ 11
2.5.2 Mortality………………………………………………………………………………… ..... 13
2.5.3 Life expectancy……………………………………………………………………… ........ 16
2.5.4 Migration…………………………………………………………………………… ........... 16
2.6 Conclusion and policy recommendations………………………………………………… 18
Chapter 3: Development Indicators ................................................................................................... 19
3.1 Introduction…………………………………………………………………………….. ......... 19
3.2 Poverty………………………………………………………………………………….. ........ 20
3.3 Household income and income inequality .................................................................... 22
3.4 Human development .................................................................................................... 24
3.5 Grant beneficiaries ....................................................................................................... 25
3.6 Education ..................................................................................................................... 27
3.6.1 School and educator: learner ratio ............................................................................ 28
3.6.2 Literacy rate and matric results ................................................................................. 29
3.6.3 School drop-out rate ……………………………………………………………………….35
3.6.4 South African learner’s performance in reading and mathematics ……………..……36
3.6.5 South African learner’s performance in mathematics and science studies………….37
3.7 Health ........................................................................................................................... 38
3.7.1 Causes of death and Burden of disease……………………………………………….. .39
3.7.1.1 Tuberculosis ........................................................................................................... 40
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3.7.1.2 Human Immunodeficiency Virus……………………………………………………… . 40
3.7.1.3 Hypertension and Diabetes …………………………………………………………….41
3.7.2 Healthcare Financing ………………………………………………………………………42
3.8 Crime ............................................................................................................................ 43
3.9 Access to basic services .............................................................................................. 45
3.9.1 Access to electricity ................................................................................................... 45
3.9.2 Access to water ......................................................................................................... 47
3.9.3 Access to Sanitation ……………………………………………………………………….49
3.10 Conclusion and policy recommendations ................................................................... 50
Chapter 4: Economic Review and Outlook ....................................................................................... 51
4.1 Introduction .................................................................................................................. 51
4.2 Global economic review and outlook ............................................................................ 52
4.3 South African economic review and outlook................................................................. 57
4.3.1 Inflation and Monetary policy......................................................................................63
4.4 KwaZulu-Natal economic review and outlook............................................................... 64
4.5 Sector Performance and Contribution to GDP ............................................................ 66
4.6 International trade ……………………………………………………….............................68
4.6.1 The Brexit uncertainty .............................................................................................. 70
4.6.2 Possible impact for South Africa .............................................................................. 71
4.6.3 Current account of the balance of payments ............................................................. 72
4.6.4 International commodity of prices .............................................................................. 73
4.6.5 South Africa and KwaZulu-Natal exports.................................................................. 74
4.6.6 South Africa and KwaZulu-Natal imports ................................................................. 75
4.7 Capital Formation ......................................................................................................... 77
4.7.1 World travel and tourism .......................................................................................... 79
4.7.2 Travel and tourism in South Africa ........................................................................... 80
4.7.3 Travel and tourism in KwaZulu-Natal…………………………………………………….83
4.7.3.1 Total tourism spend as a percentage of GDP in KwaZulu-Natal…………………….84
4.7.3.2 Tourists visiting KwaZulu-Natal by country of origin…………………………………..85
4.8 Conclusion and policy recommendations ……………………………………………… ... 86
Chapter 5: Labour Markets… ............................................................................................................. 87
5.1 Introduction .................................................................................................................. 87
5.2 Overview of the South African Labour Market .............................................................. 87
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5.2.1 South African employment distribution by industries ………………………………….88
5.2.2 South African unemployment trends ......................................................................... 89
5.2.3. Unemployment distribution by age and gender ........................................................ 90
5.2.3 Unemployment distribution by level of education ……………………………………….91
5.3. The Composition of KZN’s Labour Market .................................................................. 93
5.3.1 Employment distribution by industries ....................................................................... 94
5.3.2 Unemployment trends in KwaZulu-Natal .................................................................. 96
5.3.3 Unemployment distribution by age and gender…………………………………………97
5.4 The Composition of District’s Labour Market........................................................... .…99
5.4.1 Districts’ employment trends .................................................................................... 99
5.4.2 Districts’ employment distribution by industries ....................................................... 100
5.4.3 District’s unemployment trends ……………………………………………….. ............. 101
5.4.4 Districts’ unemployment distribution by age and gender …………………………….102
5.5 Labour force participation rate…………………………………………………………….. 103
5.6 Labour absorption rate…………………………………………………………………… ... 104
5.7 Job scarcity in KwaZulu-Natal and Districts………………………………… .................. 105
5.8 Labour remuneration and productivity in KwaZulu-Natal………………………….…….105
5.9 Conclusion and policy recommendations …………………………………………………107
Appendix A: List of additional Figures and Tables ........................................................................... 109
References…………………………………………………………………………………………………….. ........ 122
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List of Tables
Table 2.1: World population and selected countries in 2019 and 2050……………………………........... 5
Table 2.2: South African population by province in 2006, 2011 and 2019………………………………...7
Table 2.3: Annual population growth rate for South Africa, 2010 to 2019……………………….............. 8
Table 2.4: Fertility, mortality and life expectancy in KwaZulu-Natal, 2006 to 2021 ………………………11
Table 2.5: Migration trends in KwaZulu-Natal, 2011 to 2021………………………………………………..17
Table 3.1: Income distribution by proportion of households in KwaZulu-Natal, 2018 …………………... 23
Table 3.2: Number and proportion of grant beneficiaries as at the end of December 2019……………. 26
Table 3.3: Learner-educator ratio and learner-school ratio by districts, 2011 and 2016……….............. 29
Table 3.4: Educational attainment for individuals at age 20+ in KwaZulu-Natal, 2008 and 2018……… 31
Table 3.5: National Senior Certificate examination performance, 2018 and 2019………………………. 32
Table 3.6: Learner performance by school categories (quintile), 2019…………………………………... 33
Table 3.7: Learner performance by subjects, 2018 and 2019……………………………………………… 33
Table 3.8: Learner performance by type of qualification, 2018 and 2019………………………………… 34
Table 3.9: School drop-outs from grade 10 to grade 12 between 2016 and 2018………………………. 35
Table 3.10: South African grade 6 learner’s and educator’s achievement in SACMEQ IV ……………… 36
Table 3.11: Tuberculosis health indicators, 2017/18…………………………………………....................... 40
Table 3.12: Human Immune Virus health indicators, 2017/18 ……………………………………………… 41
Table 3.13: Crime levels and growth rates in KwaZulu-Natal, 2016 to 2019………………………………. 44
Table 4.1: World economic estimates and projections (percentages), 2017 to 2021 ……………………53
Table 4.2: Macroeconomic performance and projections, 2014 to 2020…………………………………. 60
Table 4.3: Global inflation rates 2013 – 2021………………………………………………………………... 63
Table 4.4: Sector contribution to KZN’s Gross Domestic Product, 2010 to 2020………………………… 66
Table 4.5: Balance on current account (R billion, seasonally adjusted and annualised), 2019...............72
Table 4.6: South African exports by provinces, 2008 and 2018 ……………………………………….......75
Table 4.7: South African imports by provinces, 2008 and 2018 …………………………………………... 76
Table 4.8: Gross Fixed Capital Investment seasonally adjusted annualised rates ……………………… 77
Table 5.1 Labour force characteristics in South Africa, 2018: Q3 to 2019: Q3 ……….………………… 88
Table 5.2: South African employment by industry, 2018:Q3 to 2019:Q3 ……………………… ………... 89
Table 5.3: Labour force characteristics in KwaZulu-Natal, 2018: Q2 to 2019: Q2 ……………………….93
Table 5.4: KZN’s employment by industries, 2008 to 2018 ……….……………………………………….. 95
Table 5.5: Employment by district municipalities, 1996, 2008 and 2018 …………………………………. 99
Table 5.6: District employment by industries, 2018………………………………………………. ………... 100
Table 5.7: Unemployment by district municipalities, 2008 to 2018……………………………… ………... 102
Table 5.8: Unemployment rate distribution by age, 2018………………………………………… ………... 103
Table 5.9: Labour force participation rate, 2008 to 2018………………………………………… ………... 104
Table 5.10: Labour absorption rate, 2008 to 2018 …………………………………………………………… 104
Table 5.11: Job Scarcity in KwaZulu-Natal and districts, 2008 to 2018 …………………………………….105
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List of Figures
Figure 2.1: KZN’s population by age and gender, 2019………………………………………………………9
Figure 2.2: KZN’s population by race in 2019………………………………………………………………… 10
Figure 3.1: Share of poverty lines across all the provinces in SA, 2018…………………......................... 21
Figure 3.2: Human Development Index in KwaZulu-Natal, 2008 and 2018……………………………….. 24
Figure 3.3: KZN’s social grant beneficiaries by grant type, 30 December 2019 …………………………. 26
Figure 3.4: KZN’s share of grant beneficiaries by grant type and growth rate, 30 December 2019 …… 27
Figure 3.5: Provincial functional literacy rates, 2008 and 2018 …………………………………………….. 30
Figure 3.6: National Senior Certificate achievements, 2017, 2018 and 2019 ……………………………..31
Figure 3.7: Performance by provinces in TIMMS (Grade 9), 2015 …………………..…………………….. 37
Figure 3.8: Performance by provinces in PIRLS (Grade 4), 2015………………………………………….. 38
Figure 3.9: Ten leading underlying natural causes of death in KwaZulu-Natal (%), 2016……………….. 39
Figure 3.10: Percentage of individuals who are members of medical aid schemes per province, 2018………………………………………………………………………. 42
Figure 3.11: Share of households with electrical connections by provinces, 2008 and 2018…………….. 46
Figure 3.12: Share of households with piped water at or above
RDP level by provinces, 2008 and 2018 …………………………………………….................. 48
Figure 3.13: Share of households with hygienic toilets by provinces, 2008 and 2018……………………...49
Figure 4.1: South African GDP growth rate and GDP-per capita, 1996 - 2019)………………………….. 58
Figure 4.2: Consumer Price Index headline inflation rate, 2005 – 2017 ……………………………………64
Figure 4.3: Economic growth rate in KZN and SA, 1996 to 2020 ………………………………………….. 65
Figure 4.4: Percentage share of KZN’s real GDP by districts, 2018 ………………………………………..66
Figure 4.5: Real percentage change in selected commodity prices,
2011 to 2019 (US dollar indices: 2011 = 100) ………………………………………………….. 73
Figure 4.6: Total Fixed Capital Investment (GFCF) as a percentage of GDP-R in KZN, 2014-2021……78
Figure 4.7: Number of tourists from ten leading overseas countries,
November 2018 and November 2019………………………………………………................... 82
Figure 4.8 Number of tourists from the ten leading SADC countries,
November 2018 and November 2019……………………………………………………………. 83
Figure 4.9: Total tourism spend as a percentage of GDP in KwaZulu-Natal, 2009 to 2018…………….. 85
Figure 4.10: KZN’s top foreign tourism markets by country of origin in percentages, 2018………………. 85
Figure 5.1: South African unemployment rate, 2017:Q1 to 2019:Q3………………………………………. 90
Figure 5.2: Proportion of the unemployed by education level, Q3 2019…………………………………… 92
Figure 5.3: Unemployment rate (official and expanded unemployment) in KZN, 2009 to 2018…........... 97
Figure 5.4: Unemployment by age, 2018 ………………………………………………………………………98
Figure 5.5: Labour remuneration and productivity in KZN, 2008 to 2018 …………………………………. 106
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List of Acronyms
AGOA African Growth and Opportunity Act
AIDS Acquired Immune Deficiency Syndrome
ANA Annual National Assessment
APSS Agro-Processing Support Scheme
ADEP Aquaculture Development and Enhancement Programme
AIS Automotive Investment Scheme
ARVs Anti-Retroviral
BBBEE Broad-Based Black Economic Empowerment
BCI Business Confidence Index
BER Bureau of Economic Research
BIS Black Industrialist Scheme
BMW Bavarian Motor Works
BRICS Brazil, Russia, India, China and South Africa
CCI Consumer Confidence Index
CDR Crude Death Rate
CPI Consumer Price Index
DBE Department of Basic Education
DRC Democratic Republic of Congo
EAP Economically Active Population
EC Easter Cape
ECD Early Childhood Development
EMDEs Emerging Market and Developing Economies
EU European Union
FS Free State
GDP Gross Domestic Product
GFCF Gross Fixed Capital Formation
GP Gauteng Province
GST Goods and Services Tax
HDI Human Development Index
HIV Human Immune Virus
HST Health Systems Trust
IMF International Monetary Fund
KZN KwaZulu-Natal
KZNYF KwaZulu-Natal Youth Fund
LAR Labour Absorption rate
LBPL Living Below the Lower Poverty Line
LER Learner-Education Ratio
LFPR Labour Force Participation Rate
LP Limpopo Province
LSR Learner-to-School Ratio
MERS Middle East Respiratory Syndrome
MNCWH Maternal, Newborn Child and Women’s Health
MP Mpumalanga Province
MPC Monetary Policy Committee
MTSF Medium-Term Strategic Framework
NAFTA North American Free Trade Agreement
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NC Northern Cape
NDP National Development Plan
NDoH National Department of Health
NERSA National Energy Regulator of South Africa
NIAF National Integrated Assessment Framework
NSC National Senior Certificate
NW North West
OECD Organisation for Economic Co-operation and Development
PGDP Provincial Growth and Development Plan
PMI Purchasing Manager’s Index
PRB Population Reference Bureau
PT Provincial Treasury
PTA Preferential Trade Agreement
QLFS Quarterly Labour Force Survey
SA South Africa
SAA South African Airways
SABC South African Broadcasting Corporation
SACU South African Customs Union
SADC Southern Developing Community
SADTU South African Democratic Teachers Union
SALDRU Southern Africa Labour and Development Research Unit
SARB South African Reserve Bank
SARS South African Revenue Services
SASSA South African Social Security Agency
SDGs Sustainable Development Goals
SERO Socio-Economic Review and Outlook
SEZ Special Economic Zones
SMMEs Small Medium Micro Enterprises
SOPA State of the Province Address
TIKZN Trade and Investment KwaZulu-Natal
TIPS Trade and Industrial Policy Strategy
TVET Technical and Vocational Education and Training
UBPL Living Below the Upper Poverty Line
UK United Kingdom
UN United Nations
UNDP United Nations Development Plan
UNICEF United Nations International Children's Emergency Fund
UNESCO United Nations Educational, Scientific and Cultural Organisation
US United States
USA United States of America
VW Volkswagen
WC Western Cape
WTO World Trade Organisation
WTTC World Travel and Tourism Council
YES Youth Employment Service
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Executive Summary
It is with great pleasure that the Provincial Treasury (PT) of KwaZulu-Natal (KZN) presents the Socio-Economic
Review and Outlook (SERO) for the financial year 2020/21 to all its relevant stakeholders. The publication provides
a detailed analysis of the social and economic factors that influence the environment in which the provincial
economy operates. The analysis provided herein is envisaged to facilitate the formulation of effective policies by
the provincial administration to promote the efficient allocation of fiscal resources to government departments and
public entities. The private sector and members of the general public that are interested to know the state of the
economy of KZN will benefit from the information discussed in the publication as it could influence their business
and personal decision-making. Municipalities could also utilise the information presented herein for effective
planning towards the elimination of service delivery backlogs.
Chapter one of the publication is an introduction which gives a broad overview of the social and economic
landscape of South Africa (SA) and KZN. It also highlights the focal points that make KZN unique from other
provinces. It also highlights the economic and social competencies of the province vis-à-vis its challenges.
Chapter two discusses the province’s population dynamics (demographics). The analysis starts by taking a global
perspective, focusing on population growth in different countries, before it cascades down to offering a national
and provincial overview. The section on global population growth gives a clear picture of acceleration, and
discusses the impact thereof if the situation remains unaddressed. It also assesses the age structure of the global
population, and points out the challenges faced by countries (particularly in the developed world) with ageing
populations. It also looks at the population growth in developing countries and its implications for the allocation of
resources. Lastly, the chapter zooms in on the province of KZN where it analyses the effects of fertility, mortality,
life expectancy, and migration on the provincial population relative to other provinces.
Chapter three focuses on the development indicators in SA and KZN. The indicators that are discussed include,
poverty, household income and income inequality, human development, grant beneficiaries, education, health,
crime, and access to basic services. Poverty is discussed at national and provincial levels for the year ending 2018,
with special focus on poverty lines as recommended by Statistic South Africa (Stats SA). Household income is
categorised and explained in detail. In respect of human development, a comparative analysis between the
provinces for the years 2008 and 2018 is also included. Human Development Index (HDI) of the province increased
from 0.50 in 2008 to 0.61 in 2018, meaning that the standard of living among the populous of KZN has increased
over the ten year period. In respect of grant beneficiaries, the document details the number and proportion of grant
beneficiaries among the nine provinces with specific emphasis on KZN.
Education is viewed as an investment to human capital, a poverty eliminator and a catalyst for economic growth
and development. Therefore, in this chapter, categories of education that have been reviewed include the school
and educator learner ratio, literacy rate, matric results, and the school drop-out rate. In respect of the school and
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educator learner ratio, the number of learners, educators and schools are compared across the nine provinces as
well as SA in 2011 and 2016. The literacy rate focuses on the province for the years 2008 and 2018, whilst the
level of education in the province is discussed amongst different racial groups during the same period. Thereafter,
a comparison of the national and provincial National Senior Certificate (NSC) achievements for 2017, 2018 and
2019 is shown. This section also analyses the percentage of passes by school (quintile) categories in 2019, as
well as the percentage of learners who achieved 30 per cent or more in 2018 and 2019 in Accounting, Economics,
Mathematics and Physical Science. The performance by type of qualification among the nine provinces in 2018
and 2019 is also alluded to whereby it reveals that approximately 37.8 per cent of learners achieved a bachelor
pass in KZN while 43.5 per cent are for the combined diploma and higher certificate pass. In respect of school
drop-out rate, which is shown across all provinces and SA from Grade 10 to Grade 12 between 2017 and 2019, it
is concerning to note that with the exception of the Western cape at 35.6 per cent, all other provinces have drop-
out rates of more than 50 per cent, with KZN at 52 per cent, down from 53.3 per cent recorded between 2016 and
2018.
This chapter also gives the statistics of the causes of death and discusses the province’s burden of disease. It
highlights the ten leading underlying natural causes of death in KZN in 2016, where TB is considered number one.
In respect of crime in KZN, theft, burglary at residential premises and drug related crime were the leading crime
categories in 2019. The chapter further provides an analysis of the population’s access to basic services, namely
electricity, water, and sanitation between 2008 and 2018.
Chapter four discusses the global, national and provincial economies focusing on economic growth, international
trade, travel and tourism, and inflation. The chapter begins by providing an analysis of the world economic growth
estimates and projections for some of the advanced economies, emerging market and developing economies,
Sub-Saharan Africa and SA from 2017 to 2019, including 2020 and 2021 projections. SA’s GDP growth and GDP
per capita is analysed from 1996 to 2021. Under the SA economy section, macro-economic performance and
projections are discussed between 2014 and 2020. Thereafter, there is an analysis on KZN and its economic
review and outlook, as well as the prevailing risks to its stability; the focus being on Primary, Secondary and Tertiary
sector analysis.
The chapter also discusses inflation and monetary policy from a global perspective, cascading down to a national
level. At national level, the South African Reserve Bank (SARB) has over years maintained the rate of inflation
within the target band of 3 to 6 per cent using the repo rate as one of the monetary policy instruments. Currently,
the SARB projects average inflation to be at 4.7 per cent in 2020 and 4.6 per cent in 2021. Although the forecast
is higher than the midpoint of 4.5 per cent, it remains within the target range.
Tourism is a growing industry worldwide which contributes significantly towards GDP and job creation. In light of
this, travel and tourism is discussed at a global, national and provincial level in this document. The discussion
includes the number of jobs created by the industry globally, as well as its contribution towards the world, national
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and provincial GDP. The chapter highlights the number of tourists that visited SA from the top ten overseas
countries and top ten Southern African Development Community (SADC) countries in November 2018 and
November 2019. It continues to discuss visitor exports and investment in SA, after which emphasis is placed on
KZN where analysis is on the top ten countries visiting KZN.
The country’s international trade with the rest of the world is discussed in this publication along with Brexit
uncertainty, and its impact on SA. This section further discusses the current account of the balance of payments,
international commodity prices, real percentage change in selected commodity prices, and KZN imports and
exports.
Chapter five reviews the labour market dynamics at a national, provincial (KZN) and district (municipal) level. The
chapter starts by providing an outline of the national labour market, focussing on employment and unemployment.
It proceeds by analysing unemployment by age and gender. This is followed by provincial labour dynamics, where
labour force characteristics, employment by industries, and unemployment are discussed. It further alludes to the
labour force participation rate, labour absorption rate, and job scarcity in district municipalities. The chapter
concludes by analysing labour remuneration and productivity in the province.
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Chapter 1: Introduction
This Socio-Economic Review and Outlook (SERO) is published in the first quarter of the year 2020, in anticipation
of the tabling of the Estimates of Provincial Revenue and Expenditure for the 2020/21 financial year by the KZN
MEC for Finance. The SERO offers a situational analysis of the province with the aim of informing readers of the
socio-economic climate under which the budget allocations and other planning-related decisions have been taken
by the stewards of the province.
KZN is situated along the eastern coastline of South Africa and is one of the country’s nine provinces. It is bordered
by the countries of Swaziland and Mozambique to the north, the Indian Ocean to the east, the Eastern Cape
Province to the south, Lesotho and the Free State to the west, and Mpumalanga to the north-west. It is home to
the country’s two busiest ports of Durban and Richard’s Bay; with the latter being the larger port by way of cargo
volume.
The province is the second largest contributor to the economy of the country, generating a 16.1 per cent share of
the national GDP, with Gauteng maintaining its position as the main economic contributor with a 35.3 percentage
share of the county’s GDP. The province’s position as the second highest contributor to the South African economy
of the country is testament to its significance, hence the publication discusses the key economic contributors to
the growth of the province.
KZN is engaged in an array of economic activities, most notably in agriculture, tourism, manufacturing, mining,
trade, construction, finance and community services. Its favourable climate compared to other provinces’, puts the
province in a position to excel in agriculture. With its strategically-located ports and good infrastructure, the province
thrives on exports, which in turn boost manufacturing and trade industries. Owing to its strategic location along the
coast and its attractive geographic scenarios of Drakensberg Mountains, attractive valley of thousand hills,
historical sites, the iSimangaliso World Heritage Site and game reserves, the province has a competitive advantage
in the tourism industry.
Presently the province, and the country as a whole, is debilitated by electricity black outs (load shedding). The
frequent interruption in electricity supply does not bode well for business and the economy, therefore it can be
expected that the province economic performance will be negatively affected. Besides load shedding, the province
is also faced with lower budget allocations from the fiscus i.e. equitable share grant. These cuts are a result of out-
migration from the province. This challenge has put pressure on strategic departments like education and health
as far as resource allocation is concerned as the province is dominated by young persons who are unemployed
and/or still at school. This situation places severe pressure on the available resources as a result, and the fact that
this province has the highest number of government grant recipients echoes this reality.
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Crime is also a concern as the province is dominated by young persons who are unemployed. Unemployment
creates further social ills like drug abuse which in turn encourages the prevalence of crime in society. Despite the
fact that the province is the second largest contributor towards the country’s GDP, the latter concerns are affecting
the economy. It is on this basis that this publications alludes to a number of social issues, such as education,
unemployment, poverty and health.
The publication comprises of five chapters, whereby Chapter one is the Introduction, Chapter two focuses on the
demographic profile, Chapter three provides information of the demographic indicators including poverty, income
inequality, education and health, among others. Chapter four provides an overview of the economic review and
outlook at a global national and provincial level, as well as sector analysis, international trade and inflation. The
document concludes with Chapter five which discusses labour markets in detail.
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Chapter 2: Demographic Profile
2.1 Introduction
The world is experiencing significant changes in population dynamics which include continued growth of the world
population, as well as major changes in age structures associated with population ageing, population growth and
changes in spatial redistribution related to migration and urbanization. These mega population trends affect
consumption, employment, income distribution and social protection including pensions. Resultantly, they place
pressure on constrained resources as well as the government fiscus. It is of utmost importance to recognize and
adequately plan for these demographic changes as this has become an essential prerequisite for sustainable
development.
The understanding of global population trends and anticipating demographic changes is crucial to the achievement
of Sustainable Development Goals (SDGs). Population trends witnessed over the past few decades point to
substantial progress being made towards achieving sustainable development thus far. These include reduced
mortality, particularly among children, as well as increased access to sexual and reproductive health care and
enhanced gender equality. These have empowered women to decide freely and responsibly the number, spacing
and timing of their children.
Recent demographic trends are harbingers of the future challenges to sustainable development. For example,
countries experiencing rapid population growth, most of which are in sub-Saharan Africa, must provide better
schooling and health care services to the growing numbers of children, and ensure that education and employment
opportunities are enriched at all levels. Conversely, countries that have experienced low population growth must
be prepared for an increased proportion of an aging population (65 and above). With long-term objectives, such
as SDGs, analysing population trends should equip countries to plan not only for the present but also for the future
to ensure that resources are well distributed. This will be achieved by anticipating upcoming demographic trends
and incorporating that information into economic policies and plans.
Regions with growing population in Africa and Asia are expected to face the challenge of providing quality social
services, including health and education, as well as decent employment opportunities. Furthermore, regions such
as Europe, Northern America and Latin America need to address respective challenges arising from rapid
population ageing and shrinking labour forces by bolstering their social protection systems, including pensions if
they are to improve the well-being of future generations (Hujo, 2012). Developing countries dominated by young
people need to convert a demographic opportunity into a demographic dividend by investing in human capital
development and promoting job creation. In order to promote productive investment through human capital, it is
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requisite that strong economic policies and other structural reforms that will strengthen employability of young
people be formulated and implemented.
As previously stated that demographic changes are related to sustainable development, it is important for countries
that experience high population growth to improve reproductive health care services and family planning,
particularly in the least developed countries (LDCs) so that women can attain their desired family size. This is in
line with SDG 3: Ensure healthy lives and promote well-being for all at all ages. Furthermore, in order to fully realize
a demographic dividend, it is essential to bring more women into the workforce, ensuring equal rights and safety
and security at work, as advocated by SDG 51 on gender equality.
This chapter therefore provides an analysis of population dynamics on a global, national and provincial levels. It
begins with global and national population sizes, followed by the national population growth rate. The provincial
population dynamics ranging from population size, population distribution by age and gender as well as population
distribution by race are discussed in this chapter. It further analyses the fertility rate, mortality rate, and life
expectancy, and concludes with migration, all identified as factors which determine the population structure in the
province. Finally, the chapter makes policy recommendations to improve the status quo and promote the province’s
performance towards the achievement of the SDGs.
2.2 Global population growth
The global population growth has been driven largely by increasing numbers of people reaching reproductive age,
and has been accompanied by major changes in fertility rates, increasing urbanisation and accelerating migration.
Overpopulation is defined as an inability of a country to support its existing population over time (UNICEF, 2010).
Overpopulation is an undesirable condition where the number of existing human population exceeds the carrying
capacity of the earth. Among the factors that cause overpopulation are the decline in the death rate, better medical
facilities, and technological advancement in fertility treatment, immigration and lack of family planning. It is possible
for a previously sparsely populated area to become densely populated if it is not able to contain its population
growth.
The world population increased from 7.6 billion in 2018 to approximately 7.7 billion in 2019. It is, however, expected
to increase by 26 per cent to 9.8 billion by 2050 (Population Reference Bureau, 2019) (Table 2.1). Less developed
countries constitute approximately 83.5 per cent of the world population where Asia and Africa are the most
populous regions. Approximately 60 per cent of the world’s population reside in Asia, with both China and India
comprising 36.3 per cent of the world population. About 17 per cent of the population reside in Africa, followed by
1 Achieve gender equality and empower all women and girls
5
America and Europe which have the lowest population among the regions at 13.1 per cent and 9.7 per cent,
respectively (Population Reference Bureau, 2019).
According to Population Reference Bureau (2019), the world population is expected to grow steadily towards the
year 2050 while population growth is projected to advance at a faster rate in less developed nations. As previously
indicated that global population will grow to 7.7 billion in 2019, the medium-variant projection also indicate that
global population could grow to approximately 8.5 billion in 2030, 9.8 billion in 2050, and 10.9 billion in 2100 in
(Figure A2.1 in Appendix). It can be seen from Table 2.1 that Africa is expected to almost double its population in
2050. This exceptional growth is largely due to a significant decline in mortality rates and an improvement in the
quality of life; the number of births and deaths per 1 000 people are at 34 and 8 persons, respectively. Birth rates
in less developed countries remain high at about five children per female (Population Reference Bureau, 2019).
Ageing population has become a global phenomenon; as a result every country in the world is experiencing higher
population growth among older people. In 2019 there was approximately 703 million people aged 65 and above,
and this number is projected to be doubled to 1.5 billion by 2050. Internationally, the share of the population in this
age cohort (65 years and above) increased from 6 per cent in 1990 to 9 per cent in 2019, projected to rise further
to 16 per cent by 2050 (Population Reference Bureau, 2019).
Table 2.1: World population and selected countries in 2019 and 2050
Source: Population Reference Bureau, 2019
The Population Reference Bureau further stipulates that a high proportion of the population growth anticipated in
developed countries is immigrants from less developed countries. The World Migration Report estimated that in
Population (million)% Share of world
population
Births per 1000
population
Deaths per 1000
population
World 7691 100 19 7 9854
More Developed 1269 16.5 10 10 1319
Less Developed 6423 83.5 20 7 8535
Less Developed (Excl. China) 5016 65.2 23 7 7159
Africa 1305 17.0 34 8 2515
Sub-Saharan Africa 1065 13.8 36 9 2148
Nigeria 201 2.6 38 12 401.3
South Africa 58.0 0.8 20 9 81.8
Northern Africa 240 3.1 25 6 366
America 1011 13.1 15 7 1202
Northern America 367 4.8 11 9 435
Latin America and the Caribbean 645 8.4 17 6 767
Asia 4587 59.6 17 7 5344
China 1398 18.2 11 7 1367.4
Japan 126 1.6 7 11 109.9
India 1392 18.1 20 6 1669.7
Europe 746 9.7 10 11 731
European Union 513 6.7 10 10 515
United Kingdom 67 0.9 11 9 74.7
Russia 147 1.9 11 13 138.7
Oceania 42 0.5 17 7 63
Australia 25 0.3 13 6 36.9
Mid 2019Population in Mid 2050
(million)
6
2015, 244 million people were migrants. Approximately 62 per cent of these migrants were hosted in Europe and
Asia, Africa only hosting 9 per cent. The report further reveals that almost two thirds of international migrants
during the same year were of working age population. Income earned by these migrants is repatriated to their
home countries to support their families.
The world is in the midst of witnessing demographic changes skewed with varying degrees towards ageing
population. According to the United Nations (2017), population aged 60 and above is growing faster compared to
other population groups. Also, in some countries, a smaller increase of the working-age population and relatively
faster economic growth has led to labour shortage, which has in turn led to rising wages. The increasing labour
cost undermines the comparative advantage of labour-intensive industries, making it imperative to upgrade the
industrial structure towards capital and technology-intensive industries.
Ageing population can pose serious structural challenges to fiscal and macroeconomic stability of countries by
increasing government spending on pension, health-care services and other social programs for elderly people.
This may hurt economic growth and overall quality of life if government needs to divert public spending from key
investments such as education and infrastructure in order to finance programs for the elderly. In other developing
countries, already high public spending limits the fiscal possibilities for increased aging-related spending in the
long run. Therefore, appropriate and prompt policy solutions are essential to ensure that fiscal and macroeconomic
sustainability as well as health services for all human beings are well catered for.
As aforementioned, ageing population influences a pattern of economic behaviour within countries. As people
reach their retirement age, their behaviour changes to spending less due to constrained income and prioritised
spending on necessities. As opposed to this, a reduction of the working age population that occurs as a result of
ageing population creates an impact through the changing financial pattern of savings and investments. In this
regard, a small proportion of spenders (working population) with the complement of a bigger base of elderly people
(retirees) brings about a decrease in aggregate consumption. At an early stage of demographic transition, an
increase in a proportion of workers, increases aggregate consumption, investment and total labour output, which
is called a demographic dividend.
As the transition progresses, a significant drop in labour supply due to low rates of fertility and regular mortality
can automatically result in a decline in aggregate output and domestic savings. This change in economic behaviour
can cause slow-moving economic growth and potentially threaten national reserves as well as economic stability.
It is well-documented that an ageing population structure leads to capital deepening and hence higher output per
worker (Lee et al. 2014 and Andrew et al. 2016). However, there have been concerns that this kind of structure
might reduce total productivity of an economy, in the context of an elderly’s capacity to adopt new technology and
innovation. Commonly, elderly people are comparatively slow for adapting to new technologies or approaches, this
can hamper overall productivity in the face of fast-changing global economy with rapid technical progress. Without
such capacity, there is a risk that productivity and economic growth will reduce.
7
In October 2015, the Chinese government decided that all couples would be allowed to have two children. The two
child policy that was announced was legislated to improve the China’s stagnant population growth, ageing
population and dwindling workforce over the past three decades. This policy to a large extent, targeted
approximately 90 million women of the reproductive age who had given birth before to be allowed to have a second
child after October 2015. The effects of the new policy on the shrinking workforce and rapid population ageing will
not be evident for two decades. In the meantime, more sound policy actions are needed to meet the social, health,
and care needs of the elderly population (Zeng, 2016). In a similar fashion, the Hungarian government in 2019 also
introduced financial incentives in order to promote fertility rates among the Hungarian population. These incentives
include a loan program (worth up to US$36,000) for families with at least 2 children to help them buy homes,
subsidies for car purchases and waiving personal income tax for women raising at least 4 children. Women below
the age of 40 who marry for the first time receive a waiver of a third of the debt when a second child is born, and
a complete debt waiver after they birth a third child.
2.3 South African population
The South African total population comprises of four different racial groups, which contribute to a wide variation in
terms of cultural identities, languages and religious beliefs within the country. The population is domiciled across
the nine provinces, namely the Eastern Cape (EC), Free State (FS), Gauteng (GP), KwaZulu-Natal (KZN), Limpopo
(LP), Mpumalanga (MP), Northern Cape (NC), North West (NW) and the Western Cape (WC). The country is
dominated by the African (47.4 million) population group which constitutes approximately 81 per cent of the total
population.
The total population has been increasing steadily over the years. According to Statistics South Africa (Stats SA)
(2019), the national population increased from 47.4 million in 2006 to 58.8 million in 2018; this translates to an
annual average growth rate of 2.2 per cent (Table 2.2). The Population Reference Bureau (2019) expects the
population of SA to increase by approximately 39.1 per cent between 2019 and 2050, which is substantially lower
than the percentage increase projected for countries like Nigeria and the continent of Africa as a whole in Table
2.1.
Table 2.2: South African population by province in 2006, 2011 and 2019
Source: Stats SA, 2006, 2011 and 2019
Population% Share of national
populationPopulation
% Share of national
populationPopulation
% Share of national
population
South Africa 47 390 900 100 50 586 757 100 58 775 022 100
Eastern Cape 6 894 300 14.5 6 829 958 13.5 6 712 276 11.4
Free State 2 958 800 6.2 2 759 644 5.5 2 887 465 4.9
Gauteng 9 526 200 20.1 11 328 203 22.4 15 176 115 25.8
KwaZulu Natal 9 924 000 20.9 10 819 130 21.4 11 289 086 19.2
Limpopo 5 365 400 11.3 5 554 657 11.0 5 982 584 10.2
Mpumalanga 3 508 000 7.4 3 657 181 7.2 4 592 187 7.8
North West 3 374 200 7.1 3 253 390 6.4 4 027 160 6.9
Northern Cape 1 094 500 2.3 1 096 731 2.2 1 263 875 2.2
Western Cape 4 745 500 10.0 5 287 863 10.5 6 844 272 11.6
2006 2011 2019
8
From Table 2.2, Gauteng remains the most populous province in the country with approximately 15.2 million people
in 2019; which constitutes 25.8 per cent of the national total population, an increase of 4.4 percentage points from
2011. This is marginally higher than 11.3 million people in 2011, which translated to 21.4 per cent of the national
population. Further, a large proportion of GP residents were born in other provinces and migrated to GP to take
advantage of work opportunities. KZN has the second highest population although its share of the national total
population has seen a decline from 21.4 per cent to 19.2 per cent over the period 2011 to 2019. In absolute terms,
the growth rate in the population of KZN between 2011 and 2019 was 5.2 per cent. The Eastern Cape is the only
province that realised a declining population both in absolute term and as percentage share of the national
population between 2011 and 2019, indicating a steady pattern of out-migration.
Generally, the major contributors to declining population numbers are the migration rate, a high mortality rate
coupled with a low fertility rate and a high morbidity rate. In the South African context, one of the implications of a
high migration rate for provinces is a decline in the proportion of the provincial equitable share allocation.
2.4 Population growth rate
Table 2.3 shows the South African population growth rate per age category from 2010 to 2019. The table shows
that the national population has increased at an annual average of 1.5 per cent over the 9 year period. Further,
children and elderly population have been increasing at an average of 1.3 per cent and 3.1 per cent over the same
period, respectively. On the other hand, the youth population has been showing a negative growth at an average
of -1.1 per cent for the period under review. This could be due to the fact that young people, especially males, tend
to engage in harmful activities such as drugs, alcohol abuse, crime and irresponsible behaviour which pose a threat
to their lives.
Table 2.3: National annual population growth rate (percentage), 2010 to 2019
Source: Stats SA, 2019
2.4.1 Population distribution by age and gender
Figure 2.1 shows the population distribution of KZN by age and gender in 2019. An estimated 31.6 per cent of the
population are children between 00 and 14 years of age, and about 35.9 per cent is youth between the ages of 15
Period Children (0 to 14 years Youth (15 to 34 years) Elderly (60 + years) Total
2010-2011 1.03 -0.60 2.93 1.55
2011-2012 1.22 -1.00 2.99 1.53
2012-2013 1.41 -1.41 3.16 1.54
2013-2014 1.36 -1.45 3.19 1.52
2014-2015 1.39 -1.44 3.16 1.51
2015-2016 1.40 -1.28 3.12 1.51
2016-2017 1.48 -1.32 3.06 1.49
2017-2018 1.41 -1.17 3.07 1.46
2018-2019 1.03 -0.34 3.00 1.43
9
to 34 and are economically active. Collectively, children and youth account for an estimated 67.5 per cent of the
total provincial population. The total dependent population2 is estimated at 4 190 346, while the economically active
population is estimated at 7 098 737.
Figure 2.1 KZN population distribution by age and gender in 2019
Source: Stats SA, 2019
The implication of these estimates show a high dependency ratio3 of 59 per cent. High dependency ratio is one of
the critical factors that can impede economic growth and the development of the country. It places pressure on
government finances, which lead to higher tax rates on a declining working age population, thereby creating a
disincentive for work with the ultimate result of a reduction in disposable income. In such a situation, the
government may be forced to collect more revenue from indirect taxes or wealth taxes. If the country experiences
high dependency ratio than the global average, this could affect its international competitiveness resulting in a
small number of active workers and a greater tax burden. Hence, productivity may be lower and the country would
experience a resultant decline in competitiveness.
2.4.2 Population by race
Figure 2.2 illustrates KZN’s population distribution by race in 2018. The province is largely dominated by Africans,
constituting 87.5 per cent of the total KZN population, followed by Indians at 7 per cent, Whites at 4.2 per cent and
Coloureds at 1.4 per cent, respectively.
2 The dependent population is the number of people who are aged 15 and younger and those aged 65 and older. 3 Dependency Ratio = [(Number of people under 15 years) + (Number of people aged 65 and over) ÷ (Number of people between 15 and 64)] × 100 = (4 209
229 ÷ 7 175 492) × 100 = 59 per cent. The dependency ratio is an age population ratio of those not in the labour force.
-5.4
-5.2
-5.0
-4.3
-4.4
-4.7
-4.5
-3.7
-2.9
-2.6
-2.3
-2.1
-1.7
-1.4
-1.0
-0.6
-0.6
5.5
5.4
5.1
4.4
4.5
4.7
4.5
3.5
2.5
2.0
1.5
1.3
1.0
0.8
0.5
0.3
0.2
-8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0
00-04
05-09
10-14
15-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65-69
70-74
75-79
80+% Male % Female
10
Figure 2.2: KZN’s population by race in 2019
Source: Stats SA, 2019
2.5 Fertility, mortality, life expectancy and migration
In the 17 goals of the United Nation’s Sustainable Development Goals (SDGs), Goal 3 is centered on ensuring
healthy lives and promoting the well-being of the global population at all ages. This goal is aiming at achieving the
following targets amongst others by 2030:
reduction of the maternal mortality ratio to less than 70 per 100 000 live births
end preventable deaths of newborns and children under 5 years of age, with all countries aiming to reduce
neonatal mortality to at least as low as 12 per 1,000 live births and under-5 mortality to at least as low as
25 per 1,000 live births
ensure universal access to sexual and reproductive health-care services, including for family planning,
information and education, and the integration of reproductive health into national strategies and
programmes
In order to achieve sustainable development, – particularly within the prevailing environment of financial austerity-
the propensity of the South African population to consume and to grow needs to be kept at moderate levels. This
necessitates the formulation and (seamless but speedy) implementation of policies that promote the productivity
of the working age population at large, and females (as the bearers of new life) in particular. The country’s and
province’s performance against the aforementioned SDG targets and indicators is discussed hereunder.
African; 87.5
White; 4.2
Coloured; 1.4
Asian; 7.0
11
Table 2.4: Fertility, mortality and life expectancy in SA, 2006 to 2021
Source: Health Systems Trust and Stats SA, 2020
2.5.1 Fertility4
Fertility analysis is of central importance in demographic analysis as births are a vital component of population
growth. The subject of population growth, in turn, is one that is integral to the realisation of sustainable
development. The relationship between women's empowerment and social development has been a major theme
in studies of development - gender development in particular. The United Nations (UN) claims that improving a
women's status is not only beneficial for themselves but also for the overall economic development: "Investing in
women's capabilities and empowering them to exercise their choices is not only valuable in itself, but is also the
surest way to contribute to economic growth and overall development" (United Nations, 1995).
Sustainable development represents a commitment to advance people’s well-being, with the added constraint that
this development needs to take place within the ecological limits of the biosphere (Moran, Wackernagel et al.
4 The Total Fertility Rate represents the number of children that would be born to a woman if she were to live to the end of her childbearing years and bear
children in accordance with current age-specific fertility rates (www.worldbank.org).
SA EC FS GP KZN LP MP NC NW WC
Average total fertility rate
2006-2011 2.92 3.44 2.68 2.36 3.41 3.16 2.85 2.79 3.30 2.31
2011-2016 2.65 3.06 2.44 2.32 3.08 2.86 2.53 2.41 2.90 2.21
2016-2021 2.51 2.88 2.34 1.91 2.70 2.87 2.54 2.67 2.65 2.00
Delivery in 10 to 19 years in facility rate (%)
2017/18 DHIS 12.7 15.4 10.5 8.1 17.6 13.5 12.9 17.1 10.7 10.9
Stillbirth in facility rate (per 1 000 births)
2017/18 DHIS 21.1 19.6 26.2 19.3 23.3 21.4 21.4 21.6 22.1 18.7
Inpatient early neonatal death rate (deaths per 1
000 live births)
2016/17 DHIS 9.9 10.8 11.4 10.0 9.7 10.6 9.5 13.4 10.0 7.1
2017/18 DHIS 10.2 11.8 12.0 10.2 10.3 11.0 10.4 10.0 7.9 7.2
Under 5 diarrhoea case fatality rate (%)
2016/17 DHIS 2.0 3.7 2.8 1.7 2.0 2.1 1.5 3.8 3.2 0.3
2017/18 DHIS 2.0 3.6 2.5 2.3 2.0 2.6 1.9 1.7 3.1 0.4
Under 5 pneumonia case fatality rate (%)
2016/17 DHIS 2.0 3.0 3.2 1.5 1.8 2.9 3.4 1.6 2.5 0.4
2017/18 DHIS 2.5 3.7 2.9 2.6 2.5 3.0 2.3 1.9 6.4 0.7
Under 5 severe acute malnutrition case fatality
rate (%)
2016/17 DHIS 8.0 10.2 9.6 6.5 7.4 8.3 8.4 5.1 10.6 0.6
2017/18 DHIS 7.4 11.8 7.5 6.2 7.7 5.0 9.1 6.1 8.0 2.2
Infant exclusively breastfed at Dtap-IPV-Hib-HBV
3rd dose rate (%)
2016/17 DHIS 41.6 32.8 46.2 44.0 53.9 28.9 35.3 55.0 45.5 31.8
2017/18 DHIS 47.8 46.7 53.8 47.4 56.0 39.2 48.5 56.0 56.9 34.4
Institutional maternal mortality ratio (deaths per
100 000 live births)
2016/17 DHIS 111.5 127.6 148.4 114.7 100.2 125.9 123.0 87.5 130.1 57.7
2017/18 DHIS 105.7 128.3 132.9 108.5 108.5 109.2 120.0 65.9 117.5 55.1
Life expectancy at birth (Stats SA)
2011-2016 Female 61.8 58.9 58.0 65.8 58.7 64.0 60.6 60.9 59.9 69.0
2011-2016 Male 56.5 54.5 52.5 61.3 54.0 56.6 55.0 57.5 53.1 64.2
2016-2021 Female 66.4 67.1 61.3 69.2 63.7 67.4 66.2 66.0 65.2 71.1
2016-2021 Male 60.0 59.6 54.6 63.8 57.1 61.8 60.4 59.1 57.8 65.7
12
2008). Sustainable development therefore hinges on two factors: consumption and population growth. High fertility
rates (which lead to high population growth) burden the economy in terms of the consumption of scarce resources.
The fertility rate can therefore be considered to be an indicator of the general health status of a population, and a
specific indicator of maternal health, as it encompasses health initiatives such as family planning.
Studies have shown that fertility is negatively associated with women’s education and employment (Axinn &
Barber, 2001; Mason, 1987). Improvement in women's education exposes them to modern values and ideas that
promote individualism and egalitarianism. Moreover, independence gives women the freedom to make decisions
that affect their own lives, including the use of contraception and the number of children they wish to have. In fact,
at least four major aspects of empowerment that can be identified and are closely related to fertility include,
women's education, participation in the labour force, women's participation in household decision-making and
lastly, women's use of contraception (Phan, 2013).
The World Population Review (2019) asserts Africa as the continent containing the vast majority of countries with
the highest fertility rates, with Niger topping the list at 7.1 children per woman, followed by Somalia at 6.1 children
per woman. The Democratic Republic of Congo, Mali and Chad follow at 5.9, 5.9 and 5.7 children per woman,
respectively. The North African country of Tunisia has the lowest fertility rate on the continent at 2.1 children per
woman – a figure that puts it roughly in the middle of the two hundred countries listed. Two of the most densely
populated countries in the world, China and India, have fertility rates on the lower end of the scale. At 2.3 children
per woman, India ranks at number 94 on the list, while China is much lower at 1.6 children per woman. However,
both of these figures are likely to be affected by government policies and cultural expectations around reproduction
in these countries.
According to Stats SA (2019), the fertility rate in KZN between 2016 and 2021 is projected to stand at 2.7 children-
up from the 2.5 children projected in 2018. This estimate sits above the national average of 2.5 children which had
declined from 2018 projections of 2.5 children, and is the third highest after the Eastern Cape (2.9 children) and
Limpopo (2.9 children). Gauteng (1.9 children), the Western Cape (2.0 children), and the Free State (2.3 children)
had the lowest projections.
Of every 1 000 deliveries of babies in KZN public health facilities over 2017/18, 17.6 were to adolescent mothers
between the ages of 10 and 19 years. The province had the highest prevalence of adolescent births in the country,
followed by the NC (17.1 per 1 000 live births), the EC (15.4 per 1 000 live births), and LP (13.5 per 1 000 live
births) - all of which were higher than the national average of 12.7 per 1 000 live births.
There is a negative relationship between levels of development and fertility rates. Provinces that are characterised
by higher development levels in the country such as Gauteng and the Western Cape have the lowest fertility levels
when compared to Eastern Cape and Limpopo with highest fertility rates. Evidently, the better-developed provinces
also had a lower prevalence of adolescent births. KZN therefore needs to intensify its efforts to improve access to
13
quality education particularly to the female segment of its population if the province intends to improve its
development levels.
2.5.2 Mortality5
According to the Connecticut Department of Health, the importance of mortality statistics is derived from both the
significance of death in an individual’s life, as well as their potential to improve the public’s health when used to
systematically assess and monitor the health status of the whole community. Mortality statistics are a mirror of the
prevailing health situation in a population. Within the possible damages in health, death is obviously the most
severe outcome that can emanate. Therefore the panorama of mortality, if not the whole sanitary scenario, depicts
the array of health problems that could be leading to death, i.e., what could presumably be considered the most
relevant problems for that society. Consequently, within the realm of public health, mortality statistics are often
used as a cornerstone in formulating health plans and policies to prevent, or reduce premature mortality and
improve quality of life6.
Global changes which have been witnessed over past centuries in mortality and morbidity patterns have given rise
to what Omran (1982) termed the epidemiologic transition. The main features of the transition include a decline in
mortality, an increase in life expectancy, and a shift in the leading causes of morbidity and mortality from infectious
and parasitic diseases to non-communicable, chronic and degenerative diseases such as heart disease, cancer
and diabetes mellitus.
The epidemiologic transition consists of three stages. The first or pre-transitional stage, the age of pestilence and
famine, is characterized by fluctuating mortality in response to epidemics, famines and war. The Crude Death Rate
(CDR) is high and ranges from 30 to over 50 deaths per 1 000 population. Life expectancy at birth is low, between
20 and 40 years, and the leading causes of death are infectious and parasitic diseases such as influenza, diarrhoea
and tuberculosis. The second stage, the age of receding pandemics, is a transitional phase. During this stage,
mortality starts to decline, CDR reaches a level of less than 30 deaths per 1 000 population, and life expectancy
at birth increases to about 55 years. Improved sanitation, hygiene and nutrition, and later also advances in
medicine, and public health programmes, help control epidemics and pandemics of infectious and parasitic
diseases. As a result, an increasing number of people no longer die from infections at young ages, but from chronic,
degenerative illnesses at middle and older ages.
During the third stage, the age of degenerative and man-made diseases, such as cardiovascular diseases,
diabetes mellitus and cancer. The term “man-made” hereby includes diseases related to radiation, accidents, food
additives, occupational hazards, and environmental pollution. Studies conducted in South Africa, however, have
5 The mortality rate represents the average number of deaths in a particular area over a specified period of time. 6 http://www.ct.gov/dph/cwp/view.asp?a=3132&q=388138
14
revealed that the epidemiological transition is occurring at different paces among the various population groups in
the country, making it difficult to state unequivocally which epidemiological stage the country is in (Nojilana et al.,
2017). There are several indicators of mortality which are widely used to measure premature mortality at various
stages of life. This section will look specifically into infant, children under five and maternal mortality.
For international comparisons, the World Health Organization (WHO) defines a stillbirth as a baby born with no
signs of life at or after 28 weeks’ gestation. Globally in 2015, 2.6 million third trimester stillbirths occurred and most
of these were in low and middle-income countries (LMICs), three quarters in south Asia and sub-Saharan Africa.
The third trimester stillbirth rate in south Asia and sub-Saharan Africa is approximately 10 times that of developed
countries (29 vs. 3 per 1000 births). The number of stillbirths that occur in the second trimester in LMICs is unknown
but in high-income countries, half of all stillbirths occur between 20 and 28 weeks of gestation (Saleem et.al, 2018).
Among the major causes of stillbirth worldwide are asphyxia owing to obstructed labor, placental abruption, pre-
eclampsia or eclampsia, infections (especially chorioamnionitis, syphilis, and malaria) and umbilical cord
complications. In high-income countries, congenital anomalies, infections associated with preterm birth, diabetes,
and post-term pregnancy are additional important causes, as many of the other major preventable causes of
stillbirth have reduced rates or have been eliminated. Contributing to the risk in high-income countries are high or
increasing levels of maternal smoking, obesity, and advanced maternal age (WHO, 2019).
Within populations, high rates of stillbirth rarely occur in isolation from high rates of other adverse maternal and
neonatal outcomes, especially in low-income countries. For instance, high rates of maternal mortality, as well as
neonatal deaths and long-term childhood morbidity, are generally seen in the same populations, and at the same
time in the same women (Lancet, 2011). Globally, each year, an estimated 13 million infants are born before 37
completed weeks of gestation. Complications from these preterm births are the leading cause of neonatal
mortality7. Preterm birth is directly responsible for an estimated one million neonatal deaths annually, and is also
an important contributor to child and adult morbidities. Low and middle-income countries are disproportionately
affected by preterm birth and carry a greater burden of disease attributed to this. Causes of preterm birth are
multifactorial, vary by gestational age, and likely vary by geographic and ethnic contexts8.
The early neonatal death in facility rate9 provides an indication of the quality of antenatal, intrapartum and postnatal
care received by the expectant mother, and is a key indicator to monitor in order to end the preventable deaths of
neonates and children under 5 years of age. The HST (2018) asserts that despite the availability of cost-effective
measures to prevent diarrhoeal diseases they remain the leading cause of child mortality outside the neonatal
7 A neonatal death is defined as a death during the first 28 days of life (0-27 days).
8 http://www.seminperinat.com/article/S0146-0005(10)00109-6/abstract
9 The early neonatal death in facility rate or inpatient death 0–7 days measures the number of deaths among live-born babies that occur within seven days
of birth and is expressed per 1 000 live births. The numerator is the number of death in facility 0–7 days, while the denominator includes the number of live
births in facility.
15
period in South Africa, and in 2015 accounted for 10.1 per cent of all under-5 deaths. Diarrhoeal diseases and
pneumonia are sentinel conditions for the assessment of health services for children and the reduction of the facility
case fatality rates for these two conditions is a key indicator in the National Department of Health’s (NDoH) 2012
- 2016 Strategic Plan for Maternal, Newborn, Child and Women’s Health (MNCWH) and Nutrition.
For every 1 000 live births in KZN facilities in 2017/18, 23.3 were stillborn. The province occupied the second
highest ranking in the country in terms of this indicator, with the FS experiencing the highest prevalence of this
calamity within its facilities. KZN had an early neonatal rate of 10.3 per 1 000 live births. This was on par with the
national average of 10.3 per 1 000 live births, and afforded the province a ranking of fifth place out of the nine
provinces, with the WC (7.2 per 1 000 live births), NW (7.9 per 1 000 live births), and NC (10 per 1 000 live births)
outshining the rest of the provinces as the best performers. This can be viewed as a slump in the province’s
performance in terms of achievement and ranking when compared with how it fared in 2016/17 when it achieved
an early neonatal death rate of 9.7 per 1 000 live births, which was below the national average of 9.9 in that year.
It had exceeded the national target of 10, and the province was surpassed only by the WC at 7.1 deaths per 1 000
live births and MP at 9.5 deaths per 1 000 live births.
A brief look at the health status of children within the province between 2016/17 and 2017/18 reveals that Under-
5 mortality as a result of diarrheal disease had remained unchanged at 2 per cent, on par with the national average.
The province ranked fourth in the country in this regard, surpassed by the WC (0.4 per cent), Northern Cape (1.7
per cent), and Mpumalanga (1.9 per cent).
The Under-5 pneumonia case fatality rate increased from 1.8 per cent in 2016/17 to 2.5 per cent in 2017/18, placing
the province on par with the national average, and the Under-5 acute malnutrition case fatality rate increased
marginally from 7.4 per cent in 2016/17 to 7.7 per cent in 2017/18, pushing the provincial score above the national
average of 7.4 per cent. According to Schlaudecker (2011), new studies parallel earlier reports that diarrhoea and
pneumonia impair children’s growth and that underlying malnutrition is a major risk factor for these conditions.
Episodes of diarrhoea may predispose the child to pneumonia in cases of undernourished children. Malnutrition
may partially account for the reduced efficacy of oral rotavirus vaccines in low-income countries. Additional studies
support breastfeeding and micronutrient supplementation for the prevention and control of diarrhoea and
pneumonia.
According to the Health Systems Trust’s District Health Barometer (2018), 56 per cent of infants were exclusively
breastfed at the time of receiving their 14 week vaccination in KZN. This figure was above the national average of
47.8 per cent, but the province fell short of improving its performance from 2016/17 when it achieved a rate of 53.9
per cent for the same indicator.
16
According to the WHO (2019), the high number of maternal deaths in some areas of the world reflects inequalities
in access to quality health services and highlights the gap between the rich and the poor. The Maternal Mortality
Rate (MMR) in low income countries in 2017 was 462 per 100 000 live births versus 11 per 100 000 live births in
high income countries. Women in less developed countries have, on average, many more pregnancies than
women in developed countries, and their lifetime risk of death due to pregnancy is higher. A woman’s lifetime risk
of maternal death is the probability that a 15 year old woman will eventually die from a maternal cause. In high
income countries, this is 1 in 5400, versus 1 in 45 in low income countries. KZN had a maternal mortality ratio of
101.9 per 100 000 live births in 2017/18; a meagre improvement from the 106.7 deaths per 100 000 live births
seen in 2016/17. This was below the national average of 105.7 deaths per 100 000 live births, but is a far cry from
the SDG target of 70 deaths per 100 000 live births which must be realized by 2030.
2.5.3 Life expectancy
Life expectancy is the most widely used measure of health, although it only takes into account the length of people’s
lives and not their quality of life. There have been remarkable gains in life expectancy over the past 50 years in the
Organisation for Economic Co-operation and Development (OECD) countries. On average, life expectancy at birth
reaches 80 years across OECD countries, a gain of more than 10 years since 1960. Women live almost six years
longer than men, averaging 83 years versus 77 years for men” (OECD, 2014).The United Nations Development
Plan (UNDP), defines life expectancy at birth as the number of years a newly born infant could expect to live, if
prevailing patterns of age-specific mortality rates at the time of birth stay the same throughout the infant’s life10.
The indicator is an important yardstick for any economy as it gives an indication of its health status. The implications
of low life expectancy include loss of a productive workforce, loss of a tax base and ultimately revenue, and a high
dependency ratio. Being able to predict how a population will age has implications for the planning and provision
of services. Increases in life expectancy could translate into large increases in the population. KZN is projected to
have a lower life expectancy (57.1 for males and 63.7 for females) than the national average (60 for males and
66.4 for females). The 2019 projections for KZN are lower than those of 2018 for both males and females, indicating
a deterioration in the living conditions of the provincial populace over the past year.
2.5.4 Migration
In current times, migration as a global phenomenon occurs towards countries that have smaller populations by
people in search of opportunities for employment, investment as well as economic development, among others.
The world has approximately 244 million international migrants (UNDESA, 2017) and 763 million internal
(domestic) migrants (UNDESA, 2017). In other words, migrants make up more than 1 billion people, or one-seventh
of the world’s population. Population diversity in most developed countries can be attributed to international
10 http://hdr.undp.org/en/69206
17
migration, whereas in developing countries it is mostly internal migration that contributes to this diversity. In 2015,
international migrants accounted for a small share of 3.5 per cent of the world’s population. Approximately 244
million international migrants recorded in the same year, 58 per cent of them reside in developed countries whereas
85 million located in developing countries. From the past two decades, countries in Asia, Europe and North America
recorded the largest gains in the number of international migrants, adding roughly to 27 million each, or nearly 1.1
million additional migrants per year (World Economic Forum, 2017).
It is against this backdrop that the Sustainable Development Goals (SDGs) recognise migration as a core
development consideration, which marks the first time migration is integrated explicitly into the global development
agenda. Migration has a huge impact on development in the context that the places where people live, where they
move to, and the places they go through to get there play a role in shaping people’s resources. Among the
Sustainable Development Goals, Goal 8 on economic growth and decent work explicitly refers to migration,
acknowledging the economic value of migrant labour. Migration can also contribute to the achievement of Goal 1,
as it can reduce poverty for migrants and their families in origin and destination countries. Migrants11 and their
families benefit from increased income and knowledge, which allows them to make productive investments, meet
basic needs and access education and health services, related to the achievement of Goals 1, 3 and 4 (Foresti
and Hagen-Zanker, 2017).
Despite the differences with regards to ethnicity, South Africans migrate freely to all corners of the country in
accordance with their preferences. Table 2.5 shows that between 2016 and 2021, Gauteng is expected to continue
to absorb the highest number of migrants (1 643 590) from other provinces. In contrast, KZN is projected to have
a net outflow of people (68 949). Net out-migration has also been projected in the EC, FS and LP. In contrast, NC,
MP and NW are projected to have a net inflow over the period. Migration is cited as one of the main factors
contributing to the decline in KZN’s share of the national population, and consequently its share of the equitable
share funds.
Table 2.5: Migration trends in KZN, 2011 to 2021
Source: Stats SA, 2019
11 Migration can reduce poverty of both migrants themselves and their families in countries of origin. It can do this through remittances, as well as other
mechanisms, including knowledge and norm transfers, in-kind transfers (e.g. assets) and changing household dynamics.
Out-migrants In-migrants Net-migration Out-migrants In-migrants Net-migration
Eastern Cape 505 803 181 242 -324 561 514 308 199 855 -314 453
Free State 158 603 128 327 -30 276 162 982 141 185 -21 797
Gauteng 505 574 1 519 244 1 013 670 574 705 1 643 590 1 068 885
KwaZulu-Natal 350 766 280 614 -70 152 372 681 303 732 -68 949
Limpopo 441 645 271 305 -170 340 464 848 302 226 -162 622
Mpumalanga 202 050 271 962 69 913 219 711 297 949 78 238
Northern Cape 71 460 82 321 10 861 76 193 89 252 13 059
North West 187 753 306 934 119 182 205 099 336 180 131 081
Western Cape 160 673 458 720 298 047 177 313 493 621 316 308
Provinces2011-2016 2016-2021
18
2.6 Conclusion and policy recommendations
In summation, the aging of populations around the world have profound implications for economic development
and growth. When the working-age population shrinks, in many cases so does the labour force, and the potential
for economic growth diminishes. In many advanced and emerging market economies, the proportion of the
working-age people is falling, which places pressure on government revenue. That said, this reality has opened
up an opportunity for advancements in technology and artificial intelligence in the form of driverless cars and other
similar inventions in some of these economies, and this has opened up trade opportunities.
The interventions that reduce stillbirths frequently reduce maternal and neonatal mortality. Improvements in quality
of and access to key life-saving interventions, through the facilitating of access to transportation to medical
facilities, training of health-care personnel, including obstetric drills and audits, and the use of maternity waiting
homes where high-risk women can await birth near medical facilities, are likely to prevent multiple obstetric
disorders, augment treatment, and lower rates of adverse outcomes. Several evidence-based interventions can
reduce stillbirths. Among the most important for low-income and middle-income countries are basic and
comprehensive emergency obstetric care, and the screening for and treatment of syphilis. Reductions in the
numbers of stillbirths can be accomplished not only by lessening the medical risks for pregnant women, but also
by increasing the availability of family planning services to lower the overall numbers of pregnancies. This
intervention was probably partly responsible for the reduction of stillbirths in China.
To meet the World Health Organization/UNICEF 2025 target of a mortality rate for diarrhoeal diseases of less than
1 per 1 000 live births, ongoing improvements in prevention and treatment activities in the community, adequately
equipped and well-managed PHC facilities and hospitals are required. Improved access to water and sanitation,
and increased support to mothers to achieve increased uptake of exclusive breastfeeding is also imperative. A
reduction in the rate of malnutrition requires improved breastfeeding rates and greater household food security. A
higher infant exclusively breastfed at DTaP-IPV-Hib-HBV 3rd dose rate is required in order to improve child survival
in the country and province. Achieving this requires consistent practices and messages promoting breastfeeding
including enhancing postnatal support for breastfeeding mothers in their communities.
KZN’s performance against most of the highlighted mortality indicators has dwindled when compared to the
previous year and to its ranking against other provinces, yet the province has a relatively higher disease and
population burden. This is a worrying outcome as the health sector receives donor funding to supplement its budget
for some of its programmes. Should this negative situation persist, the province could be faced with a withdrawal
of financial support from donor organisations, leaving it in an undesirable state.
19
Chapter 3: Development Indicators
3.1 Introduction
Human development along with the improvement in the living conditions of all population groups is the ultimate
objective of all policy efforts. The Sustainable Development Goals (SDGs) clearly articulate that in order for
development to be sustainable, the process must be based on three important pillars which interact and
complement each other; these are social12, environmental13 and economic14 development (LDCR, 2016). Human
development involves not only expanding capabilities to broaden people’s present choices to live healthy,
productive and safe lives but also ensuring that these choices do not compromise or restrict those available to
future generations. The human development approach has been profoundly inspired by Amartya Sen’s pioneering
works in welfare economics, social choice, poverty and famine, and development economics.
Economic growth and development is particularly needed in those regions where it has been lacking over the past
decades. For many of the least developed countries, sustained human development cannot be envisaged without
a broad range of actions to increase people's capabilities and opportunities. This involves not only mobilizing and
developing human capacities but also investing in order to expand and diversify the economic base and eliminating
the barriers to equal opportunity. One of the central goals of human development is enabling people to become
agents in their own lives and in their countries of origin. As Sen argues, in development activities ‘the people have
to be seen as being actively involved given the opportunity in shaping their own destiny, and not just as passive
recipients of the fruits of cunning development programs’ (Sen, 1999). From this perspective, development relies
on people’s freedom to make decisions and advance key objectives. The best way to achieve human development
is to promote more equitable economic growth and more participatory development. The level of economic
development of a region can be measured using indicators which include, among others, the human development
index (HDI), the Gini coefficient, literacy rate, and poverty rate.
Sustainable development is underpinned by five main principles, namely: natural, human, social, manufactured
and financial capital. These are the five types of sustainable capital from which human beings derive the goods
and services that they need to improve their quality of life. This chapter covers some of the topics that are integral
12 Social sustainability implies that peace, social justice and inclusiveness are indispensable for sustained economic progress and lasting development. Social
disruption resulting from excessive discrepancies in the standards of living of different segments of the population including poverty and all its symptoms
could eventually bring economic progress to a halt and endanger the quality of the natural environment.
13 On the other hand, environmental sustainability indicates that the quality and protection of the natural environment, as well as successful adaptation to
climate change, influence the scope for long-term social progress and economic development. Environmental degradation, waste of non-renewable natural
resources and the various impacts of climate change have a direct effect on living conditions.
14 Lastly, economic sustainability suggests that macroeconomic and financial stability, as well as the prevention of balance of payments crises are a basic
requirement for sustained economic and social development. It also implies that human and financial resources must be used in a way that ensures continuous
and lasting improvements in standards of living.
20
to the attainment of sustainable development in KZN. These are namely poverty, income inequality, human
development, grant beneficiaries, education, health, access to basic services and crime.
3.2 Poverty
In order to understand the threat that poverty poses, it is crucial to know its dimension and the process through
which it worsens. In practical terms, it is important to know how to quantify the extent of poverty. This contribution
was made by Sen who viewed poverty measurement from two perspectives; the identification of the deprived
households and the aggregation of the characteristics of the underprivileged individuals into a single indicator.
From the recent empirical studies, the first question has been solved mostly by the income (or consumption)
method, which requires the specification of a subsistence income level, referred to as the poverty line. As pointed
out by Sen, the second problem has been attempted to be solved using two crude poverty measures which is the
head count ratio (proportion of persons with incomes less than the poverty line) and the income gap ratio (the gap
between the poverty line and average income of the poor, expressed as a proportion of the poverty line). He was
critical of these approaches because they are insensitive to the redistribution of income among the poor and the
former also remains unchanged if the position of a deprived household worsens. It is of utmost importance for
countries in the world to prioritise sustainable development that integrates economic development, social progress
and environmental sustainability which will include growth of employment and income, with sufficient inclusion
benefiting people living in poverty.
The counter-revolution against development economics (Toye, 1987), enabling the ascendance of the Washington
Consensus in the 1980s (Williamson, 1989), significantly transformed the discourse on poverty. Washington
Consensus reforms involving macroeconomic stabilization, defined as low single digit inflation, as well as
microeconomic market liberalization associated with structural adjustment were all supposed to accelerate poverty
reduction. In this new framework, poverty reduction was seen as an almost automatic consequence of economic
growth. In this regard, little attention has been given to structural causes of poverty, including inequality of
opportunities and initial conditions (such as assets), and the distributional consequences of growth. While the
reforms were supposed to unleash rapid growth, social policy was reduced to social safety nets for those falling
between the cracks as well as victims of temporary setbacks such as natural catastrophes and financial crises.
However, the reforms have slowed growth and exacerbated inequality (United Nations, 2005; Jomo and Baudot,
2007).
South Africa (SA) is characterized by high levels of poverty and inequality. Poverty is a multidimensional
phenomenon that extends beyond the economic arena to encompass factors such as the inability to participate in
social and political life (Sen, 1987). In this regard, poverty has numerous manifestations; these include a lack of
income and productive resources sufficient to ensure sustainable livelihoods, hunger and malnutrition, poor health
conditions, and limited or a complete lack of access to education and other basic services. People confronted by
21
such circumstances are usually found to be living in poverty. It, therefore, comes as no surprise that many of them
rely on social security assistance offered by the government to meet their basic living needs such as shelter,
clothing and food.
South Africa is an upper-middle-income country with a per capita income of R55 258 (2018). Regardless of this
perceived wealth, the reality of the majority of the country’s households is either one of absolute poverty, or of
continued vulnerability to poverty. Although significant progress was made prior to the economic crisis of 2008 in
addressing poverty, many South African households have fallen back or still remain in the trap of poverty through
inadequate access to clean water, proper health care facilities and household infrastructure.
Figure 3.1: Share of poverty lines across all the provinces in SA, 2018
Source: IHS Markit, 2020
SA uses three measures of poverty, that is the food poverty line (FPL), the lower-bound poverty line (LBPL), and
the upper-bound poverty line (UBPL) for statistical reporting. The data reported assists with the identification of
patterns, which facilitates in the planning, implementation, monitoring and evaluation of poverty reduction
programmes (Stats SA, 2018). Ideally, the primary purpose of the poverty lines approach is to provide a consistent
benchmark against which progress on a money-metric or expenditure-based dimension of poverty can be
monitored. Stats SA defines the food poverty line15 as the level of consumption below which individuals are unable
to purchase sufficient food to provide them with an adequate diet. Those living below this line are consuming
insufficient calories for their nourishment. The LBPL16 denotes food and non-food items required by households.
However, those living below this line must sacrifice some food to get these non-food items such as transport and
15 Food poverty line – R561 (in April 2019 prices) per person per month. This refers to the amount of money that an individual will need to afford the minimum
required daily energy intake. This is also commonly referred to as the “extreme” poverty line. 16 Lower-bound poverty line – R810 (in April 2019 prices) per person per month. This refers to the food poverty line plus the average amount derived from
non-food items of households whose total expenditure is equal to the food poverty line.
SA WC EC NC FS KZN NW GP MP LP
29.118.9
37.724.1 27.8
37.229.0
20.331.8 36.2
43.6
31.3
54.1
38.343.2
52.6
44.2
32.3
47.2
53.4
58.6
46.7
69.5
54.9
59.3
66.9
59.9
46.1
62.4
69.8
FPL LBPL UBPL
22
airtime. Finally, individuals living below the UBPL17 are those who are able to consume both food and non-food
items, but are unable to meet other necessities such as shelter, education, security and healthcare (Stats SA,
2018).
Figure 3.1 shows the share of people living below the food poverty line, the lower-bound poverty and the upper-
bound poverty lines by province in 2018. The WC (18.9 per cent) had the lowest share of people living below the
FPL, followed by GP (20.3 per cent), NC (24.1 per cent) and FS (27.8 per cent). Approximately 37.2 per cent of
the KZN population was still living below the FPL in 2018. This figure was the second highest in the country and
had increased slightly (1.2 per cent) from 36 per cent in 2017. In terms of the share of people living below the
LBPL, KZN had 52.6 per cent of its population living within this classification of poverty. This was the third highest
rate in the country, and had also increased marginally from 51.7 per cent in the previous year. The share of KZN
people living below the UBPL in 2018 stood at 66.9 per cent; 0.8 per cent up from the level it was at in 2017, and
third highest in the country.
3.3 Household income and inequality
One of the NDP targets is to reduce income inequality (measured by the Gini coefficient) from 0.70 to 0.60 by
2030. This is further supported by Goal 10 of the SDGs which aim to reduce inequalities within and between
countries in the world. High and persistent income inequality stifle economic growth and progress towards further
reduction in poverty. The economic cost of ignoring income inequality is significant. Recent empirical literature
studies suggest that countries with high income inequality may experience lower economic growth, coupled with
long duration of recessions and a reduced effectiveness in lifting people out of poverty. Further, the persistence of
inequality potentially results in unprecedented societal problems such as crime, corruption, social exclusion and
instability.
Understanding that development is not sustainable if people are excluded from opportunities, services, and the
chance for a better life; SDG 10 calls on the international community to reduce inequality within and among
countries. Since the onset of the global financial crisis period in 2008/9, there has been a growing concern that
income inequality is a huge obstacle to inclusive economic growth, social development and environmental
sustainability. It is well known that with high levels of income inequality, poverty cannot be easily reduced through
economic growth. Similarly, unequal societies in terms of wealth constrain the productive capacity of deprived
individuals and the vulnerable groups along with their potential to contribute to economic growth, also the inequality
undermines social cohesion and solidarity. It is an undisputable fact that the division between the rich and the poor
17 Upper-bound poverty line – R1 227 (in April 2019 prices) per person per month. This refers to the food poverty line plus the average amount derived from
non-food items of households whose food expenditure is equal to the food poverty line.
23
is often a factor behind rising levels of crime and social unrest, as it undermines trust and weakens bonds of
solidarity in societies.
High inequality, in particular, impedes government efforts towards reducing poverty, and its persistence is a threat
to social cohesion and social justice (Tregenna, 2011). Reducing inequality is therefore a legitimate goal of
government and a key step towards achieving the ultimate goals of social justice and social cohesion (Salardi,
2005). More importantly, in order for government to deal decisively with poverty, it needs to first tackle inequality.
High levels of inequality prohibit the poor from fully participating in the growth process. By restricting the expansion
of the domestic market, inequality may create institutions that trap the poor into poverty in particular where
inequality is associated with class, race and gender. Further, the persistence of inequality potentially results in
unprecedented societal problems such as crime, corruption, social exclusion and instability.
Table 3.1: Income distribution by proportion of households in KZN, 2018
Source: IHS Markit, 2020
In 2018, the bulk (39.3 per cent) of KZN households were categorized as being lower income earners (between
R0 and 54 000 per annum), approximately 20.7 per cent were categorised as low emerging middle income earners
(between R54 000 and R96 000 per annum), 27.5 per cent were emerging middle class (earning between R96 000
and R360 000 per annum). Approximately 6.5 per cent of households in the province were categorised as realised
middle-class earners (R360 000 - R600 000), 4.4 per cent were upper middle class (R600 000 - R1 200 000) and
only 1.6 per cent of KZN households were considered as affluent, earning in excess of R1.2 million per annum.
About 46 per cent of African households earned less than R54 000 per annum, and a further 23 per cent earned
between R54 000 and R360 000 per annum. In contrast, the majority of White, Coloured and Asian households
fell within the emerging middle class at 34 per cent, 42 per cent and 50.2 per cent respectively. The White segment
of the population enjoyed dominance over realised middle class, upper middle class and affluent income
categories. It is clearly evident that significant income disparities still exist among the four population groups in the
country, and the African segment of the population still remains least favoured by the current conditions.
Income category Income level (R'000) African White Coloured Asian Grand total
Lower income 0 - 54 46% 2% 16.6% 4.4% 39.3%
Low emerging middle income 54 - 96 23% 3% 15.4% 10.6% 20.7%
Emerging middle class 96 - 360 24% 34% 42.0% 50.2% 27.5%
Realised middle class 360 - 600 4% 25% 13.0% 17.4% 6.5%
Upper middle class 600 - 1 200 2% 24% 10.0% 12.2% 4.4%
Affluent 1 200 + 0% 12% 3% 5.2% 1.6%
Grand total 100% 100% 100% 100.0% 100.0%
24
3.4 Human development
According to United Nations Development Programme [UNDP] (2014), human development is defined as enlarging
people’s choices and preferences in a way which enables them to live long and enjoy healthy lives in order for
them to have access to education, health and a decent standard of living. There are two approaches in this nexus,
a standard approach is to treat human capital, or the average years of schooling as an ordinary input in the
production function (Mankiw et al, 1992). The second approach is related to endogenous growth theory, which is
the growth of total factor productivity as a function of the level of education (human capital) and life expectancy.
The assumption is that an educated and healthy labour force is better at creating, implementing, and adopting new
technologies thereby generating economic growth.
On the other hand, a strong relationship between economic growth and human development does exist in
economies with low levels of poverty, fair distribution of income inequality and higher spending on education and
social development. In this regard, economic growth does contribute to human development through household
and government expenditures. The subsequent improvement in the quality of the labour force in health, nutrition
and education enhances their capabilities and productivity, which in turn, contributes to growth (Ranis and Stewart,
2000). In this view, human development contributes to future economic growth rather than being only an end-
product.
Figure 3.2: Human Development Index (HDI) in KZN, 2008 and 2018
Source: IHS Markit, 2020
African countries have increased their levels of investment in education, health and nutrition; increased their
participation in decision-making; and reduced military spending. However, the outcomes have been mixed, and
there have been large variations in their poverty performance (Arimah 2004). Despite the fact that measures have
been introduced to counter poverty in SA, and the province of KZN, the high poverty figures indicate a high level
of deprivation, and this in turn impacts negatively on the level of human development within the province as more
people are unable to access quality services in the health and education sectors for a better quality of life.
SA WC EC NC FS KZN NW GP MP LP
0.560.68
0.490.57 0.53 0.50 0.51
0.650.49 0.50
0.66
0.73
0.60
0.650.65
0.61 0.63
0.72
0.61 0.60
2008 2018
25
Human development entails enlarging people’s freedom and opportunities and in so doing, improving their well-
being. This is achieved through ensuring that individuals are able to enjoy basic rights such as good health, access
to knowledge, and a decent material standard of living (SSRC, 2017).
According to United Nations Development Programme [UNDP] (2018), the Human Development Index (HDI) ranks
189 countries according to their performance against a set of these components; health, education and Gini
coefficient (income inequality). As per the Global HDI in 2018, the following countries ranked the highest, namely
Norway (0.95), Switzerland (0.94), Australia (0.93), Ireland (0.94) and Germany (0.93). These countries were
categorised as being of Very High Development status as they scored above 0.80. Since its inception, Norway
improved from an HDI value of 0.85 in 1990 to 0.95 in 2018. Switzerland’s development status also improved
during the review period from 0.83 to 0.94. Conversely, countries that recorded the lowest HDI in 2018 were Niger
(0.37), the Central African Republic (0.38), South Sudan (0.41), Chad (0.40) and Burundi (0.42). South Africa was
ranked 113 out of 189 countries under the category of High Human Development, with an index of 0.70. The
country had an HDI value of 0.62 in 1990.
There has been considerable progress among all regions in the past three decades. The global HDI value in 1990
was 0.59 and it improved to 0.72 in 2017. This undoubtedly shows that people are living longer, getting more
educated and are generally living a better quality of life. This trend holds promise for reducing gaps in human
development across regions in the future.
Globally, countries have increased their level of investment in education, health, and in the empowerment of
women and girls. In South Africa, this stance is evidenced by the government’s investment being the highest in
education, health, defence and public safety, and social protection (National Treasury, 2018). As depicted in the
figure, KZN had an estimated HDI of 0.61 in 2018, which is considered as medium human development according
to the Human Development Report (2016). Although there was a significant improvement in the HDI of 2008 which
was 0.50, the province’s HDI in that year was below the national average of 0.66 (Figure 3.2).
3.5 Grant beneficiaries
SA has the largest and most well-developed social security system in Africa, with the total number of beneficiaries
estimated at about 18.1 million in 2019. There are approximately 70 per cent of beneficiaries of Child support, 20.1
per cent beneficiaries of the Old age grant, and 5.9 per cent beneficiaries of the Disability grant in the country. A
country like SA where inequality levels are high combined with low levels of labour market participation, social
grants play an important role in supporting households to attain a minimum standard of living. Thus, social grants
have made a substantial contribution in reducing poverty and inequality in South Africa. The expenditure on social
grants was approximately R175.2 billion in 2019/20 and is expected to rise by 8 per cent to R189.3 billion in
2020/21. With the expected growth, expenditure on social grants will account for about 3.3 per cent of GDP in
26
2020/21. The Old age grant (43.9 per cent) constitutes the largest share of the total expenditure on social grants,
followed by the Child support grant (37 per cent) and disability grant (13.2 per cent) (National Treasury, 2019).
Table 3.2: Number and proportion of grant beneficiaries as at the end of December 2019
Source: South African Social Security Agency (SASSA), 2020
KZN had the highest number of social grant beneficiaries as at the end of December 2019, with a total number of
4 million recipients (22.2 per cent). This was 2.2 per cent higher than 3.9 million beneficiaries recorded at the end
of December 2018. The province had the highest share of recipients of the Child Support Grant (2 895 451
beneficiaries, 22.8 per cent), Old Age Grant (720 430 beneficiaries, 19.8 per cent), Disability Grant (228 962
beneficiaries, 21.6 per cent), Grant-in-Aid (78 914 beneficiaries, 29.9 per cent), Care Dependency Grant (39 994
beneficiaries, 25.9 per cent) and Foster Child Grant (61 914 beneficiaries, 19.5 per cent) (Table 3.2).
Figure 3.3: KZN social grant beneficiaries by grant type as at 30 December 2019
Source: South African Social Security Agency (SASSA), 2020
There are approximately 4 025 672 grant recipients within the province, 71.9 per cent were receiving child support,
17.9 per cent for old age, 5.7 per cent for disability, 1.5 per cent for foster care, 2 per cent as a grant-in-aid, 1 per
cent for care dependency and 0 per cent for war veterans (7 beneficiaries) (Figure 3.3).
No. % No. % No. % No. % No. % No. % No. % No. %
Eastern Cape 589 147 16.2 12 17.9 182 530 17.2 30 731 11.7 23 609 15.3 70 885 22.3 1 934 238 15.2 2 831 152 15.6
Free State 210 912 5.8 1 1.5 75 113 7.1 8 878 3.4 8 851 5.7 21 829 6.9 702 541 5.5 1 028 125 5.7
Gauteng 648 495 17.8 22 32.8 120 163 11.3 8 643 3.3 20 736 13.4 40 962 12.9 1 925 349 15.2 2 764 370 15.2
KwaZulu-Natal 720 430 19.8 7 10.4 228 962 21.6 78 914 29.9 39 994 25.9 61 914 19.5 2 895 451 22.8 4 025 672 22.2
Limpopo 479 289 13.2 2 3.0 98 763 9.3 55 658 21.1 16 478 10.7 34 618 10.9 1 880 288 14.8 2 565 096 14.1
Mpumalanga 261 760 7.2 1 1.5 79 987 7.5 23 467 8.9 11 921 7.7 22 185 7.0 1 125 820 8.9 1 525 141 8.4
Northern Cape 91 075 2.5 1 1.5 49 847 4.7 16 862 6.4 6 123 4.0 9 853 3.1 319 465 2.5 493 226 2.7
North- West 270 641 7.4 1 1.5 66 317 6.2 15 697 6.0 10 056 6.5 24 618 7.8 874 102 6.9 1 261 432 7.0
Western Cape 366 484 10.1 20 29.9 160 774 15.1 24 851 9.4 16 509 10.7 30 342 9.6 1 045 358 8.2 1 664 338 9.2
South Africa 3 638 233 100.0 67 100.0 1 062 456 100.0 263 701 100.0 154 277 100.0 317 206 100.0 12 702 612 100.0 18 138 552 100.0
Old Age War Veterans' Disability Grant-in-aid Care Dependency Foster Child Child Support Total
Old Age Grant17.9%
War Veterans' Grant0%
Disability Grant5.7%
Grant in Aid2.0%
Care Dependency Grant1.0%
Foster Care Grant1.5%
Child Support grant71.9%
27
Figure 3.4: KZN’s share of grant beneficiaries by grant type as at 30 December 2019 and growth from 30 December 2018
Source: South African Social Security Agency (SASSA), 2020
In terms of growth in beneficiary numbers as at the end of December 2018 up to December 2019, there was an
increase in the number of Grant-in-aid beneficiaries (25 per cent), Old Age Grant beneficiaries (3 per cent), Child
Support Grant beneficiaries (2.2 per cent), and Care Dependency Grant beneficiaries (0.6 per cent). The types of
grant that had a decline in the number of beneficiaries over the 12 month period were the Disability Grant at -1.6
per cent, the Foster Care grant (-12.8 per cent), and the War Veterans (-36.4 per cent).
3.6 Education
Education is an investment in human capital that has both direct effects on the educated person and society as a
whole. According to Luis (2000) education alone does not cause observable differences among people, since there
are many factors such as innate ability and family background which interact with formal schooling in the
development of the preferences that guide people’s economic behaviour. It is a critical and valuable component of
the nation’s human capital, which increases efficiency and effectiveness of individual worker to perform required
tasks at a high level of capacity. The role of education remains the catalyst for economic growth and development
since investing in human capital is crucial for growth, and hence improves productivity, technological progress
which depends on the presence of highly skilled labour. One of the Department of Basic Education’s (DBE’s)
strategic objectives is to extend a better quality of life to children of school-going age. Education is enshrined in
the South African Constitution as a basic human right; section 29(1) (a) states that “everyone has the right to a
basic education”, and section 29(1) (b) says that “everyone has the right to further education”, and that the state
must make such education “progressively available and accessible”.
It is from this background that one of the objectives for the National Development Plan of SA is to make early
childhood development (ECD) a priority among the measures to improve the quality of education and long-term
Old Age Grant; 17.9%; 3.0%
War Veterans' Grant; 0.0%; -36.4%
Disability Grant; 5.7%; -1.6%
Care Dependency Grant; 1.0%; 0.6%
Foster Care Grant; 1.5%; -12.8%
Child Support grant; 71.9%; 2.2%
Grant in Aid; 2.0%; 25.0%
Grant name; share (%); growth (%)
28
prospects of future generations. It is a critical foundation for the children to reach their full potential and be able to
develop holistically (physical, socio-emotional, language and cognitive) thus shaping their subsequent school
attainment, performance, health, and future earning as well as assisting in discouraging antisocial behaviour
(Heckman, Pinto and Savelyev, 2013).
Investing in ECD is one of the best ways in which governments can reduce primary school drop-out rates and the
number of children who repeat a year. Such an investment will to a large extent, increase government expenditure
on education, offsetting higher costs that governments would otherwise face if having to adopt measures later on
to ensure all children have equal access to primary school and complete primary education (UNICEF, 2019). This
is further supported by Georgieff (2007); Grantham et al, (2007); and Walker et al, (2007) who argue that critical
brain development occurs during the early years and nutritional deficiencies during this time are associated with
delayed cognitive ability and hence negatively affect school progress. These studies provide evidence that early
childhood development gives a good basic education foundation. It is from this backdrop that quality basic
education is one of the fourteen national outcomes as indicated in the Medium Term Strategic Framework (MTSF)
of SA.
It is therefore not surprising that education receives the largest allocation in the national budget. The KZN Budget
for 2019/2020 over the Medium Term Expenditure Framework (MTEF) for Basic Education is R54 billion which
constitutes 41.4 percent of the total provincial Budget (KZN Treasury Budget Speech, 2019). According to National
Treasury (2017), the national priorities for government in the years ahead include, expanding access to education
and quality early childhood development. The focus is to improve the quality of education by strengthening
educator qualifications and providing appropriate learner and teacher support materials.
3.6.1 School and educator: learner ratio
Educators are a basic part of the educational system as they have an important and decisive role to play in the
quality of education and how well learners perform. It is therefore essential to examine the factors which impact
the quality of educators and their effectiveness in imparting knowledge to the learners and how learners’ academic
achievements are affected. The problem of a high learner-educator ratio is one of the challenges affecting the
effectiveness of educators and academic performance for learners. This was confirmed by Cortes, Moussa and
Winstein (2012) who found that class size affects learners’ performance due to misbehaviour and other disciplinary
problems in large classes.
The problem of having overcrowded classrooms began in the apartheid era affecting mostly black schools. After
the first democratic elections that took place in 1994, the Post Provisioning Norm (PPN) policy was implemented
to reduce over-crowding by lowering learner teacher ratios (LER) in all South African schools. The problem of
overcrowding has an impact on teachers as the quality teaching and learning diminishes in an environment that is
29
overcrowded. It is very easy for a teacher to become frustrated when experiencing problems that prevent them
from achieving educational outcomes.
According to the Department of Basic Education (2014), the learner teacher ratio for public schools in South Africa
is 30:1. This ratio makes it much easier for the teacher to communicate with all leaners and give them much needed
attention. This is further supported by Mtika (2010) who argues that smaller classes allow teachers to interact more
with learners and give individual attention to slow learners. Shah and Inamullah (2012), postulates that classrooms
of small size allows for effective teaching and learning. Furthermore, Monyatsi (2016) found that factors that
contribute to the academic performance of the learner are parental involvement, medium of instruction, teaching
and learning materials, infrastructure, the learner-educator ratio, school libraries, motivation of teachers,
qualification of teachers and learners’ discipline.
Table 3.3 shows the number of learners, educators and schools across the various provinces for the years 2016
and 2019. A comparison of the years under review indicates that there was a decline of 1.2 per cent in the KZN’s
number of learners from 2 877 544 in 2016 to 2 844 764 in 2019, also the number of schools also decrease by 1.7
per cent from 6 142 to 6 036 over the same period. However, this is in contrast to the increase in the number of
educators by 8.6 per cent. This resulted in a decline for LER from 32 to 29.2 whereas the LSR slightly increased
from 469 to 471, respectively. It is evident from the table that most provinces experienced a decline on LERs
except Limpopo province (LP) and Free State (FS). With regards to LSR, all eight provinces recorded increase;
the only exception being Eastern Cape (EC) province.
Table 3.3: Learner-educator ratio (LER) and learner-school ratio (LSR) by provinces, 2016 and 2019
Source: Department of Basic Education, 2020
3.6.2 Literacy rate and matric results
The rationale for recognising literacy is that it confers human development benefits on individuals, families,
communities and nations such as improved self-confidence, self-esteem and a feeling of greater self-
empowerment, irrespective of whether it was acquired through schooling or adult literacy programmes. These
literacy skills are fundamental to informed decision making, personal empowerment as well as active participation
Number of
Learners
Number of
Educators
Number of
SchoolsLER LSR
Number of
Learners
Number of
Educators
Number of
SchoolsLER LSR
South Africa 12 932 565 418 613 25 574 30.9 506 13 041 198 444 857 24 998 29.3 522
Eastern Cape 1 961 547 61 629 5 676 31.8 346 1 843 814 64 273 5 430 28.7 340
Free State 688 349 23 523 1 282 29.3 537 716 080 24 027 1 156 29.8 619
Gauteng 2 326 584 82 078 2 813 28.3 827 2 447 377 87 728 2 813 27.9 870
KwaZulu-Natal 2 877 544 89 799 6 142 32.0 469 2 844 764 97 563 6 036 29.2 471
Limpopo 1 765 555 54 418 4 018 32.4 439 1 753 819 54 019 3 931 32.5 446
Mpumalanga 1 074 352 34 404 1 847 31.2 582 1 094 941 36 979 1 795 29.6 610
Northern Cape 291 515 9 136 574 31.9 508 298 888 10 653 583 28.1 513
North West 830 547 26 108 1 535 31.8 541 852 589 28 012 1 536 30.4 555
Western Cape 1 116 572 37 518 1 687 29.8 662 1 188 926 41 603 1 718 28.6 692
2016 2019
30
in the society. Literacy also has an influence on human capital and the ability of individuals, social institutions and
nations to adapt and change along with technological and other developments in the global market. People that
are literate tend to have a high social status (since they can obtain employment) and economic status (since they
can be more productive as they are less costly to train).
Figure 3.5 shows the functional literacy rate18 in SA by provinces in 2008 and 2018. In KZN, the literacy rate
increased from 76.5 per cent in 2008 to 83.4 per cent in 2018. However, it was still 0.8 percentage points below
the national level of 85 per cent in 2018. The North West (NW) and Eastern Cape (EC) were the only two provinces
that had a functional literacy rate of 90 per cent and above.
Figure 3.5: Provincial functional literacy rates, 2008 and 2018
Source: IHS Markit, 2020
Table 3.4 represents the level of education in KZN in 2008 and 2018. It is evident that the situation regarding the
level of education in KZN improved over the 10-year period. In 2018, 7.3 per cent of the people who were 20 years
and older had not received any schooling. This is an improvement from 12 per cent recorded in 2008. The
percentage of the population aged 20 years and above that completed secondary education (matric only) in KZN
increased from 26.3 per cent in 2008 to 32 per cent in 2018. This is impressive since it is reflective of more people
in the Economically Active Population (EAP) having received a basic education and as such can be more
productive members of society. It is encouraging to see that there has been an increase; although not significant
in the proportion of people who attained higher degree qualifications in 2018 (10.5 per cent) than in 2008 (8.8 per
cent).
18 This model defines people older than 15 and who have completed their primary education (grade 7) as being functionally literate. If someone is functionally
literate, they are assumed to have a level of reading and writing skills that enable them to manage daily life and employment.
SA EC FS GP KZN LP MP NW NC WC
78.286.4
71.0 72.3 76.5 75.6 72.087.6
73.3 71.2
85.0
90.5
79.1 79.183.4 82.9
79.6
91.9
81.5 79.9
2008 2018
31
Table 3.4: KZN’s levels of education for individuals at age 20+, 2008 and 2018
Source: IHS Markit, 2020
However, it is still a concern that the African population still lags behind the other three racial groups with regard
to the level of education. Nonetheless, this is anticipated to change over the medium term due to one lag effects
of the government’s announcement of free higher education for the low income households. It will give rise to
opportunities for those who could not previously attend due to lack of funds and poor educational background
particularly those who reside in rural areas.
Figure 3.6: Comparison of national and provincial NSC achievements, 2017, 2018 and 2019
Source: Department of Basic Education, NSC Examination, 2020
For the first time since the advent of democracy, the matric pass rate in KZN has reached the 80 per cent threshold
which shows that efforts to improve the quality of education are yielding the desired results. In 2019, South Africa
achieved a pass rate of 81.3 per cent an increase of 3.1 percentage points from 78.2 per cent recorded in 2018.
Free State province reclaimed its number one spot from Gauteng, leading the charts with 88.4 per cent pass rate
which reflected an improvement of 0.9 percentage points. GP came in second as it obtained an 87.2 per cent pass
rate, it recorded a decline of 0.7 percentage points from 87.9 per cent achieved in the previous year.
Despite the problem of load-shedding experienced in other parts of the country, and service delivery protests in
the North West which led to the relocation of learners to other examination centres, NW made it onto the top three
best performing provinces with an impressive pass rate of 86.8 per cent. All provinces performed above 70 per
cent and this is an applauded achievement. The province of KZN which had the highest number of matriculants
African White Coloured Asian Total African White Coloured Asian Total
No schooling 14.2 1.0 2.6 3.7 12.0 8.5 0.4 0.9 2.0 7.3
Grade 0-6 17.5 1.7 5.6 7.7 15.1 12.8 0.8 4.9 5.9 11.4
Grade 7-11 38.8 28.3 44.2 35.0 37.1 40.7 17.2 41.5 30.0 38.4
Cert/ diploma without matric 0.6 3.9 1.0 0.8 0.7 0.3 1.2 0.4 0.2 0.3
Matric only 23.3 61.4 33.9 39.6 26.3 29.8 41.8 39.8 46.0 32.0
Higher 5.6 3.7 12.7 13.3 8.8 8.0 38.7 12.5 16.0 10.5
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
2008 2018
SA EC FS GP KZN LP MP NW NC WC
75.1 65.086.1 85.1
72.9 65.6 74.8 79.4 75.6 82.8
78.270.6
87.5 87.9
76.269.4
79.0 81.173.3
81.5
81.3
76.5
88.4 87.2
81.3
73.2
80.386.8
76.5
82.3
2017 2018 2019
32
came fifth, with a record of 81.3 per cent an increase of 5.1 percentage points from 76.2 per cent in 2018 (Figure
3.6).
Table 3.5: Number of learners wrote and achieved NSC, 2018 and 2019
Source: Department of Basic Education, NSC examination, 2020
After much consideration and having considered the international practice in countries like Finland, Sweden,
Denmark, Japan, Korea, Kenya and the United Kingdom; in 2013 the Minister of Education approved a policy that
allows learners that have failed a grade for the second time to be promoted to the next grade; provided he or she
meets the specified criteria which indicate that she or he has a potential of coping in the next grade if provided with
the necessary support. When considering the progressed learners, KZN (66.8 per cent) came in the sixth position
after GP (71.8 per cent), FS (69.1 per cent), NW (77.5 per cent), EC (69.6 per cent) and MP (72.4 per cent). The
province of KZN had an improvement of 3.4 per cent from 63.4 recorded in 2018. (Table 3.5).
Public education is funded by government through a pro-poor funding model. This means previously black schools
receive more funding from the government than former white schools. The funding model creates five categories
of schools referred to as quintiles. These quintiles determine how much government funding each school will be
allocated. The schools in the lower quintiles (1 to 3) are declared no-fee schools, and do not charge school fees.
These schools get the bulk of the government’s funding. Schools in quintiles 4 and 5 receive a small amount of
funding from the government relative to the latter and are therefore allowed to charge school fees. The five
categories (quintiles) are based on the socio-economic status of the community in which the school is situated.
Table 3.6 shows that the socioeconomic status of the community affects the percentage of passes in the different
categories (quintiles) of schools. This is in line with the performance of the schools within the lower quintiles (1 to
3) achieving much lower percentages of pass rates than quintiles 4 and 5. Approximately 39.4 per cent of schools
in the lower quintiles achieved more than 80 per cent pass rate as compared to some schools in the quintiles 4
and 5 which achieved 66.1 per cent and 83.3 per cent respectively. It is commendable that the lower quintiles
schools showed an improvement of around 10 per cent from the pass rate realised in 2018. Efforts used to assist
these schools should be expanded further in order to continue to address the inequality in the provision of education
needs. This can be done by providing more funding while ensuring that physical, material, human knowledge
resources are made available in order to enhance quality education irrespective of geographical area.
Number of
learner's wrote% Achieved
Number of learner's
wrote% Achieved
Number of learner's
wrote% Achieved
Number of
learner's wrote% Achieved
South Africa 512 735 78.2 33 412 60.2 504 303 81.3 34 498 65.3 3.1 5.1
Eastern Cape 65 733 70.6 3 775 56.5 63 198 76.5 4 152 69.6 5.9 13.1
Free State 24 914 87.5 3 466 65.2 25 572 88.4 3 230 69.1 0.9 3.9
Gauteng 94 870 87.9 5 594 70.3 97 829 87.2 6 573 71.8 -0.7 1.5
KwaZulu-Natal 116 152 76.2 5 097 63.4 116 937 81.3 6 462 66.8 5.1 3.4
Limpopo 76 730 69.4 6 279 55.9 70 847 73.2 4 473 66.8 3.8 10.9
Mpumalanga 44 612 79 4 074 64.7 43 559 80.3 4 445 72.4 1.3 7.7
Northern Cape 9 909 73.3 532 40.2 9 138 76.5 568 60.0 3.2 19.8
North- West 29 061 81.1 2 870 56.9 26 819 86.8 2 685 77.5 5.7 20.6
Western Cape 50 754 81.5 1 725 33.6 50 404 82.3 1 910 37.5 0.8 3.9
% Difference
(progressed
learner's )
Overall performance 2018 Progressed candidates 2018 Overall performance 2019 Progressed candidates 2019 % Difference
(overall
performance)
33
Table 3.6: Percentage of passes by school (quintile) categories, 2019
Source: Department of Basic Education, NSC examination, 2020
Table 3.7 compares the percentage of learners who achieved 30 per cent and above in the selected subjects from
2018 to 2019. In respect of these learners’ performance in the gateway subjects, there has been a decline in KZN
from 75.4 per cent to 69 per cent (Economics), from 50.6 per cent to 48.5 per cent (Mathematics) between 2018
and 2019. On the other hand, there has been a slight improvement from 69.1 per cent to 75.2 per cent (Accounting),
and from 73.6 per cent to 74.8 per cent (Physical Science). Nationally, there was also an increase in the
performance of learners in Accounting and Physical Science subjects, the only exception being Economics and
Mathematics.
Table 3.7: Percentage of learners who achieved 30 per cent and above in selected subjects, 2018 and 2019
Source: Department of Basic Education, NSC examination, 2020
In order to improve the quality of basic education, the Annual National Assessment (ANA) was introduced by the
Department of Basic Education (DBE) in 2011 to enable a systemic evaluation of education performance and
thereby enhance learners’ achievements. ANA was a pilot study with the objective of assessing learners in grades
1 to 6 and grade 9 in order to enhance their numeracy and literacy skills. However, arguments against ANA were
raised by the teacher unions, more especially the South African Democratic Teachers’ Union (SADTU) with regard
to time constraints which hampers the smooth running of teaching and learning. They further argued that the
assessment practices of teachers are dominated by the recording and reporting of learners’ scores, with limited
focus on the use of assessment for addressing learning needs. Hence, ANA was phased out and will be replaced
by the National Integrated Assessment Framework (NAIF) which constitutes of three separate yet complimentary
assessment programmes that is administered among learners in Grades 3 to 6 and 9.
Quantiles 0 - 19.9% 20 - 39.9% 40 - 59.9% 60 - 79.9% 80 - 100%
Quantile 1 1.6 5.2 15.3 31.1 46.8
Quantile 2 0.9 4.4 10.8 31.4 52.4
Quantile 3 0.5 2.6 12.4 33.0 51.5
Quantile 4 0.2 0.8 3.7 29.2 66.1
Quantile 5 0.0 0.1 2.2 14.4 83.3
Accounting Economics MathematicsPhysical
ScienceAccounting Economics Mathematics
Physical
Science
South Africa 72.5 73.3 58.0 74.2 78.4 69.3 54.6 75.5
Eastern Cape 72.8 69.6 45.5 66.5 80.7 73.1 41.8 70.3
Free State 82.3 78.4 74.3 81.7 81.6 70.9 68.5 82.7
Gauteng 83.2 83.7 74.7 83.5 85.5 75.4 67.8 84.0
KwaZulu Natal 69.1 75.4 50.6 73.6 75.2 69.0 48.5 74.8
Limpopo 62.3 60.2 54.9 71.8 68.6 59.1 53.1 72.0
Mpumalanga 71.9 72.9 54.2 70.2 77.8 65.4 51.6 70.9
North West 70.5 79.3 68.9 78.6 80.9 74.8 62.2 79.0
Northern Cape 69.6 68.4 59.0 66.9 82.8 54.9 56.6 69.2
Western Cape 75.0 74.5 76.0 79.5 84.3 72.5 70.2 81.8
2018 2019
34
The NIAF is structured to offer elements that integrate diagnostic assessment tools, summative examinations and
independently administer systemic evaluations. According to the DBE (2003), the term systemic evaluation refers
to the determination of the extent to which the education system achieves set social, economic and
transformational goals through the measurement of learner performance as well as the context in which learners’
experience learning and teaching.
The new model will be sample-based and administered in Grades 3, 6 and 9 every three years. Providing the basic
education sector personnel involved in planning and evaluation, with valuable data on the health of the system and
trends in learner performance. Furthermore, the NIAF would pay particular attention to the diagnostic assessment,
which will be administered in the classroom to identify learning gaps and to plan remedial measures early in the
learning process, so as to avoid learning deficits arising at a later stage (DBE, 2017).
Table 3.8: NSC performance by type of qualification, 2018 and 2019
Source: Department of Basic Education, NSC examination, 2020
The number of learners who qualify to enrol for the Bachelor programmes at institutions of higher learning has
improved significantly compared to preceding years .Table 3.8 shows the NSC performance in relation to the type
of qualification achieved by grade 12 learners for the period 2018 and 2019. In 2019, approximately 37.8 per cent
of learners achieved a bachelor pass in KZN which shows a significant improvement from the 33.2 per cent
obtained in the previous year while 43.5 per cent qualified for the combined diploma and higher certificate pass.
The majority of school leavers either enter into vocationally oriented certificate and diploma programmes at public
and private colleges or universities of technology (formerly known as technikons), or they enter the labour market.
Learners who complete matric and do not achieve a bachelor’s pass can be absorbed by the Technical and
Vocational Education and Training (TVET) colleges, whereby they will gain technical skills which will enable them
to qualify as artisans in various fields.
Effective Technical and Vocational education and training (TVET) should provide practical skills training linked to
the prospect of entering the labour market, creating a smooth transition from academic learning to labour market
Number of
Learners
wrote
Bachelor DiplomaHigher
Certificate
Number of
Learners
wrote
Bachelor DiplomaHigher
Certificate
South Africa 512 735 33.6 27.6 16.9 504 303 36.9 28.7 15.7
Eastern Cape 65 733 27.4 26.1 17.0 63 198 32.3 28.2 15.9
Free State 24 914 37.5 33.2 16.8 25 572 39.1 33.5 15.8
Gauteng 94 870 43.6 30.3 13.9 97 829 44.5 30.3 12.5
KwaZulu Natal 116 152 33.2 26.9 16.1 116 937 37.8 28.0 15.5
Limpopo 76 730 23.5 24.6 21.3 70 847 26.8 26.2 20.1
Mpumalanga 44 612 29.6 29.7 19.6 43 559 32.7 30.1 17.5
North West 29 061 32.5 29.3 19.3 26 819 37.2 32.4 17.3
Northern Cape 9 909 26.1 27.1 20.1 9 138 30.3 28.7 17.5
Western Cape 50 754 42.3 25.4 13.6 50 404 43.6 25.8 12.9
2018 2019
35
participation. Possible skills that could be acquired through TVET colleges include, but are not limited to, boiler-
making, textiles, hair-dressing, and plumbing.
3.6.3 School drop-out rate
The South African Schools Act 84 of 1996, section 3(1) states that all children in South Africa (SA) must attend
school from the first school day of the year in which such learner reaches the age of seven years until the last day
of the year in which such learner reaches the age of fifteen years or the ninth grade whichever comes first.
According to Branson et al. (2013) and Sabates et al. (2010) with this band of compulsory learning from grade 1
to grade 9, SA has a very high rate of participation which is over 95 per cent. The problem of high school drop-out
rate (leaving school without obtaining a minimal credential) in SA takes place in grades 10 and 11 (Spaull, 2015).
This is evident in table 3.5 and 3.9 whereby the number of learners who wrote matric in 2019 were 504 303 whereas
in 2017 the number of learners in grade 10 were 1 075 925.
This implies that a potential dropout of 53.1 per cent happened in the aforementioned grades which caused them
not to complete upper secondary level of schooling. In KZN, the drop-out rate was estimated at 52 per cent. This
trend was pertinent to all the provinces whereby the drop-out rate sat above 50 per cent, except for the WC at 35.6
per cent. The learners who drop-out of the basic education schooling system either proceeded to Technical and
Vocational Education and Training (TVET) to pursue their studies while others look for employment opportunities.
The latter tend to have difficulties in finding employment because they leave schools without a National
Qualification Frameworks (NQF) with which to navigate the labour market. This in turn contributes to them being
unemployable.
Table 3.9: Number of school drop-outs from grade 10 to grade 12 between 2017 and 2019
Source: Department of Basic Education, NSC examination, 2017 and 2020
In KZN, the drop-out rate was estimated at 52 per cent. This trend was pertinent to all the provinces whereby the
drop-out rate sit above 50 per cent except for the WC with 35.6 per cent. The learners who drop-out of the basic
education schooling system either proceed to Technical and Vocational Education and Training (TVET) to pursue
Number of Grade 10
Learners (2017)
Number of Grade 12
Learners (2019)
Number of school drop-
outs (2017 to 2019)
Drop-out rate (2017 to
2019)
South Africa 1 075 925 504 303 571 622 53.1
Eastern Cape 142 413 63 198 79 215 55.6
Free State 60 019 25 572 34 447 57.4
Gauteng 197 200 97 829 99 371 50.4
KwaZulu Natal 243 547 116 937 126 610 52.0
Limpopo 172 430 70 847 101 583 58.9
Mpumalanga 94 103 43 559 50 544 53.7
North West 63 674 26 819 36 855 57.9
Northern Cape 24 237 9 138 15 099 62.3
Western Cape 78 302 50 404 27 898 35.6
36
their studies while others look for employment opportunities. The latter tend to have difficulties in finding
employment because they leave schools without National Qualification Frameworks (NQF) with which to navigate
the labour market. This in turn contribute to them being unemployable.
3.6.4 South African learners’ performance in reading and mathematics
South Africa has participated in a number of cross-national assessments of educational outcomes to see the
progress in terms of reading and mathematics scores across all provinces. These assessments include the
Southern Africa Consortium for Monitoring Educational Quality (SACMEQ), the Trends in Mathematics and
Science Studies (TIMSS) and the Progress in Reading and Literacy Study (PIRLS). On top of this, the NDP has
set long-term targets in respect of these international assessments which is outlined as follows:
to improve South Africa’s average SACMEQ results for Grade 6 languages and mathematics from 495 to
600 by 2022
to improve average Grade 8 scores in the TIMMS from 264 to 420 points by 2022
lastly, Grade 8 scores for mathematics and science should at least reach the benchmark of 500 points by
2030
Table 3.10: South African Grade 6 learners and teachers achievements in Reading and Mathematics in SACMEQ IV
Source: Department of Basic Education, 2017
It is against this backdrop that National Development Plan (NDP) has emphasised the need for a country to have
educational outcomes that is high of quality and characterised by significantly improved learning outcomes. This
indicates that more focus should be based on improving literacy, numeracy/mathematics and science outcomes
and to ensure that all leaners particularly at lower grades (4-6) are able to read and write accordingly. Table 3.10
shows the overall achievement in SACMEQ IV for learners and teachers presented for all South African provinces.
As it is evident from the table, the overall mean scores for learners in Reading was 538 whereas the score for
teachers was 727. WC province had the highest scores for Reading (627.6) and Mathematics (654.4) for learners
Reading Mathematics Reading Mathematics
Mean Mean Mean Mean
Eastern Cape 502.6 525.4 701.2 780.6
Free State 543.5 551.2 700.6 791
Gauteng 579.9 576.9 734.3 832.9
KwaZulu-Natal 529.3 541.8 722.2 758.6
Limpopo 487.3 513.4 726.7 746.5
Mpumalanga 535.5 538.8 716.3 792.7
Northern Cape 538.3 544 730.7 782.5
North West 522.1 539.9 747.7 730.7
Western Cape 627.6 654.4 789.9 843.5
South Africa 538.3 551.5 726.6 780.5
Provinces
Learners Teachers
37
and this was also the same case for teachers in both Reading (789.9) and Mathematics (843.5) .For leaners, KZN
came in the sixth position with a score of 529.3 for reading and 541.8 in Mathematics, while teachers it recorded a
mean scores of 722.2 (Reading) and 758.6 (Mathematics). The average mean scores in mathematics were 552
for learners and 781 for teachers. It is vital for the country to have these three kinds of assessments19 mentioned
above because they monitor the performance of learners in key subject areas in order to assess the education
system as a whole by international standards.
3.6.5 South African learners’ performance in mathematics and science studies
Despite the progress made in access to education, SA still needs to improve its performance with regards to
mathematics and science in order to achieve intermediate benchmark (475-550) following the likes of Singapore,
Japan and South Korea. When evaluating learner performance results in national and international studies such
as the Annual National Assessments (ANA) and the Trends in International Mathematics and Science Study
(TIMSS), South African learners still perform far below the international mean. In identifying the determinants of
education quality, various studies have focused on the issue of resources at schools as well as school
management, both of which have been found to have an effect on learner performance.
Figure 3.7: Performance by provinces, 2015 (Grade 9) in TIMMS
Source: Department of Basic Education, 2017
An area that has received much attention internationally is the effect that teacher classroom practices have on
learner performance and hence on the quality of education. Looking at figure 3.7, it is evident that Gauteng and
Western Cape provinces scored above the national average of 372 and 358 for mathematics and science,
respectively. On the other hand, KwaZulu-Natal was ranked the fourth with scores of 369 and 352 for both
19 Southern Africa Consortium for Monitoring Educational Quality (SACMEQ), the Trends in Mathematics and Science Studies (TIMSS) and the Progress in
Reading and Literacy Study (PIRLS)
SA GP WC MP KZN FS NC LP NW EC
372408 391 370 369 367
464
361 354 346
358
405388
348 352 351
356
339 335 328
Mathematics Science
38
mathematics and science. The Eastern Cape together with North West and Limpopo were the three lowest
achieving provinces.
The Progress in International Reading Literacy Study (PIRLS) evaluates reading comprehension and monitor the
trends in reading literacy at five-year intervals. Since its inception, PIRLS has assessed fourth year reading
comprehension in over 60 countries since 2001 and set international benchmarks for reading. The international
benchmarks along the reading achievement scales were categorised as follows; advanced (625), high (550),
intermediate (475), and low (400). Figure 3.8 shows Grade 4 PIRLS literacy achievement by provinces in 2016.
SA recorded an average of 320 for Grade 4 performance in literacy as indicated in the figure, while KZN achieved
316. WC (377) was the highest performing province followed by FS (347), GP (343) and NW (326). As expected
EC (290) and LP (285) were the two provinces with the lowest performance, below 300.
Figure 3.8: The overall Provincial results for Grade 4 in PIRLS, 2015
Source: Department of Basic Education, 2017
Despite this achievement in PIRLS, a lot of work needs to be done in terms of ensuring that all provinces reach at
least Intermediate benchmark (300) which will make South Africa more competitive with the likes of Egypt,
Morocco, Kuwait, Iran and Denmark who had more scores than our country. It is highly recommended that time
spent on reading must be increased to a greater proportion in all foundation and intermediate phases in the
curriculum and to encourage extra-mural writing and reading habits.
3.7 Health
In many ways, the concept of health is synonymous with infection control. Today, the importance of clean water,
simple sanitation, and access to basic health care remains essential; lapses in these practices result in modern-
day infectious diseases catastrophes, including outbreaks of diarrheal diseases, hepatitis, human
immunodeficiency virus (HIV) infection, and resistant tuberculosis, among others (Malani, xa et al. 2007).
SA WC FS GP NW KZN MP NC EC LP
320
377347 343
326 316 313 306290 285
39
South Africa, as is the case with many other African countries, did not achieve the set targets for the Millennium
Development Goals. The reasons are multifaceted but relate fundamentally to poorly functioning health systems
in sub-Saharan Africa, and in southern Africa, the more recent epidemics of HIV/AIDS, and tuberculosis (TB). Many
institutions have responded to the problem of resource-constrained health systems over the years including United
Nations agencies through bilateral development investments, and donor aid. This has resulted in significant
investments in TB, maternal health, reproductive health, childhood illnesses, and HIV-related services (Fonn 2011).
The South African government has in its 2019-2024 Medium Term Strategic Framework committed to intervene in
the prevailing health situation by reducing the burden of disease from TB, implementing the 90-90-90 strategy20 to
reduce the burden of disease from HIV/AIDS, strengthening maternal health programmes to reduce maternal
mortality, and expanding the screening of users of public health services for priority non-communicable diseases
(NCDs). The UNAIDS Thembisa model estimated in June 2019 that South Africa reached 90–68–88 by mid-2018.
3.7.1 Causes of death and the Burden of disease
According to Stats SA, tuberculosis remained the leading underlying natural cause of death in KZN in 2016 at 7.6
per cent, followed by other forms of heart disease (7.4 per cent), diabetes mellitus (5.5 per cent) and HIV (5 per
cent) (Figure 3.9). This disease, however, is a national pandemic, not isolated to KZN.
Figure 3.9: Ten leading underlying natural causes of death in KwaZulu-Natal (%), 2016
Source: Stats SA, 2018
20 The aim of this UNAIDS strategy is to ensure that by 2020, 90 per cent of people living with HIV are tested and know their status, 90per cent of people
living with HIV are receiving treatment, and 90 per cent of people on treatment have a suppressed viral load.
Malignant neoplasms of of respiratory and intrathoracic organs
Ischemic heart diseases
Influenza and pneumonia
Other viral diseases
Hypertensive diseases
Cerebrovascular diseases
HIV
Diabetes mellitus
Other forms of heart disease
Tuberculosis (including MDR-TB and XDR-TB
2.7%
3.2%
3.4%
4.3%
4.7%
4.9%
5.0%
5.5%
7.4%
7.6%
40
3.7.1.1 Tuberculosis
In 2016, the TB death rate in KZN had remained unchanged from that of 2015 at about 5.4 per cent – one of the
lowest rates in the country, second only to the WC at 3.8 per cent. Approximately 89.7 per cent of all KZN health
facility clients who tested positive for TB were initiated on treatment in 2017/18. About 87.3 per cent of clients who
were found to be co-infected with TB and HIV were on antiretroviral treatment in 2017. Of those clients who tested
positive for TB in KZN facilities in 2017, 9.5 per cent were found to be Rifampicin-resistant cases. The prevalence
of these “drug-resistant” cases had increased from 7.7 per cent in 2016.
Table 3.11: Tuberculosis health indicators, 2017/18
Source: Health Systems Trust, 2019
The Centres for Disease Control (CDC)21, in conjunction with the South African government, has strategically
focused support on HIV prevention and treatment programs, and system strengthening. With tuberculosis (TB) as
the leading cause of death among people with HIV, CDC supports the integration of HIV and TB in clinical
programming and provides technical assistance to the National TB Control Program to address the challenges of
multi-drug resistant TB and TB/HIV co-infection. The CDC focuses support on programs designed for adolescent
girls (15-19 years) and young women (20-24). Adolescent girls are up to eight times more likely to be HIV-infected,
while young women are more than three times more likely to be infected than their male peers. Through the
Determined Resilient Empowered AIDS-free Mentored Safe (DREAMS) program, CDC uses multiple evidence-
based interventions, including post-violence care, parenting/caregiver programs, and facilitating access to existing
resources such as cash transfers and education subsidies, to address factors that increase girls’ HIV risk.
3.7.1.2 Human Immunodeficiency Virus
KZN continued to increase the proportion of HIV+ clients remaining on antiretroviral treatment in 2017/18. The rate
increased to 64.6 per cent from a rate of 61.3 per cent in 2016/17, which in itself was an increase of 8.7 percentage
21 An agency of the US Department of Health which deals with public health concerns.
SA EC FS GP KZN LP MP NC NW WC
TB symptom 5 years and older screened in
facility rate (%), 2017/1873.1 65.1 82.4 81.6 86.9 82.1 72.5 50.5 61.9 41.0
TB symptom child under 5 years and older
screened in facility rate (% ), 2017/1864.6 50.4 76.7 66.7 91.6 62 57.1 34.1 48.9 39.6
TB clients initiated on treatment rate (%),
2017/1891.0 81.7 95.4 83.4 89.7 100.7 94.4 83.0 96.9 107.3
TB/HIV co-infected client on ART rate (% ), 2017 89.1 96.8 90.8 87.7 87.3 93.4 97.3 96.3 87.6 77.4
TB Rifampicin resistant confirmed client rate (% )
2016 6.2 6.2 5.2 5.7 7.7 5.3 7.8 5.5 5.1 5.0
2017 6.9 6.3 5.8 6.1 9.5 5.3 10.1 5.8 5.6 5.2
TB Rifampicin resistant confirmed treatment start
rate (%), 201734.0 30.5 37.0 38.2 30.7 37.0 38.0 35.4 48.5 31.3
TB client treatment success rate (% ), 2016 81.7 83.2 80.2 84.4 82.9 80.6 82.2 77.0 78.4 80.3
TB client loss to follow up rate (% ), 2016 6.9 6.8 5.7 6.2 5.0 4.3 6.0 10.3 7.2 11.0
TB death rate (%), 2016 6.6 6.3 10.1 5.8 5.4 11.5 7.4 7.7 10.2 3.8
41
points from 52.6 per cent in 2015. This means that more people may survive or be able to work longer, and as
such continue to contribute to the economy (Table 3.12).
Table 3.12: Human Immune Virus health indicators, 2017/18
Source: Health Systems Trust, 2019
3.7.1.3 Hypertension and Diabetes
Hypertension is a leading risk factor for cardiovascular disease and a significant cause of morbidity and mortality.
Uncontrolled hypertension among adults is associated with increased mortality, although adequate hypertension
treatment and control can reduce the incidence of first and recurrent heart attacks and strokes, heart failure, and
chronic kidney disease. According to the WHO (2019), reducing hypertension to an extent prevents the possibility
of individuals suffering conditions such as heart attack, stroke, and kidney damage, as well as other health
problems. The disease can be prevented through measures such as reducing salt intake (to less than 5g daily),
eating more fruit and vegetables, being physically active on a regular basis, avoiding the use of tobacco, reducing
alcohol consumption, limiting the intake of foods high in saturated fats, and eliminating or reducing trans fats in
one’s diet. Managing the condition involves taking measures to reduce and manage mental stress, check blood
pressure regularly, treat high blood pressure medically, and manage other medical conditions such as diabetes.
Diabetes is an important public health problem worldwide because of its high lifetime prevalence, its contribution
to mortality, a diminished quality of life, and high healthcare expenses. Four out of five people with diabetes live in
low or middle income countries, where diabetes is often undiagnosed and untreated (Lee and Smith 2012).
Coexistent type 2 diabetes and obesity- often termed "diabesity"- is an emerging epidemic that poses a challenge
to the treatment of both conditions. More than 90 per cent of the world's 285 million people with diabetes have type
2 diabetes, and this number is projected to grow to 438 million by 2030 (Bailey, 2011). In principle, lifestyle
measures such as diet and exercise could prevent the onset, and greatly help the treatment of type 2 diabetes and
obesity. In practice, this is seldom feasible.
SA EC FS GP KZN LP MP NC NW WC
Infant HIV PCR test positive around 10
weeks rate (%)
2017/18 DHIS 0.9 1.2 1.1 1.0 0.7 0.8 1.1 1.4 1.1 0.5
HIV test around 18 months uptake rate (%)
2017/18 DHIS 78.9 64 101.6 54.7 96.2 62.4 147 103.9 58.5 21.8
HIV testing coverage age 19 months and
older (%)
2017/18 DHIS 23.0 22.8 14.7 21.0 26.2 27.0 27.2 22.0 18.8 21.5
Clients remaining on ART rate (%)
2016/17 DHIS 53.8 58.6 45.6 61.3 68.6 56.7 69.3 46.9 54.8
2017/18 DHIS 58.9 57.6 66.7 50.1 64.6 72.6 60.3 71.1 49.1 58.8
42
3.7.2 Healthcare financing
A significant proportion of the South African population continues to die prematurely due to poor health systems.
Treatable health conditions sometimes are not treated on time and preventable diseases remain a challenge
(Department of Health, 2019). This is in spite of the fact that government has tried its utmost since 1994, to ensure
that everyone in the country has equitable access to necessary healthcare services. Nevertheless, there are still
serious challenges mainly caused by a skewed healthcare financing system. This skewedness is evidenced by the
proportion of SA citizens who are members of medical aid schemes (Figure 3.10). The graph reveals that on a
national scale, only 16.4 per cent of citizens belonged to a medical aid scheme in 2018. It is also evident that this
phenomenon is largely driven by a lack of affordability by individuals as the provinces with the highest prevalence
of poverty had the least proportions of citizens with medical aid coverage. Specifically, Limpopo (8.2 per cent), the
Eastern Cape (10 per cent) and KZN (12.4 per cent) had the least proportions of citizens on medical aid.
Figure 3.10: Percentage of individuals who are members of medical aid schemes per province, 2018
Source: Stats SA, 2019
There were no attempts to create a unified health system for all citizens of the country during the apartheid era.
One of the first major policy documents issued in the democratic era was the 1997 White Paper on the
Transformation of the Health System in South Africa. The preface to the White Paper opened with a clear statement
of intent, but also a recognition of the enormity of the task ahead: “We have set ourselves the task of developing a
unified health system capable of delivering quality health care to all our citizens efficiently and in a caring
environment”. In addition to a commitment to comprehensive primary health care, the White Paper expressed a
preference for decentralised management, in the form of a district health system, and sought to integrate the
activities of the public and private health sectors, including Non-Governmental Organisations (NGOs) and
traditional healers, and to foster community participation across the health sector (HST, 2019).
Limpopo
Eastern Cape
KwaZulu-Natal
Mpumalanga
North West
Northern Cape
Free State
Gauteng
Western Cape
South Africa
8.2
10
12.4
12.6
13.5
16.1
16.2
23.9
25.1
16.4
43
According to the WHO (2017), universal health coverage (UHC) is a growing policy priority in many countries, as
well as a significant and increasing focus of attention at the international level, forming one of the targets of
Sustainable Development Goal 3. Consistent with the core messages of the World Health Report 2010, many
countries have committed to UHC and are now reviewing, analysing, and modifying health financing arrangements
in their countries. The 1997 White Paper set the stage for the presentation of the National Health Insurance (NHI)
Bill in South Africa in July 2019. The NHI is a financing system that will ensure that all citizens of South Africa (and
legal long-term residents) are provided with essential healthcare, regardless of their employment status and ability
to make a direct monetary contribution to the NHI Fund.
3.8 Crime
Crime is of increasing concern to South African citizens and to the government at large, since it affects public
safety. This lowers the quality of life and can force skilled workers to exit the labour market, as a result, crime will
further limit possible employment and educational opportunities. Drugs and crime also undermine development by
driving businesses away, this is mainly due to the fact that foreign and domestic investors see crime as a sign of
social instability and drives up the cost of doing business.
As it is outlined in the National Development Plan [NDP] (2030), crime and violence are not just security issues,
but have deep social and economic consequences. Therefore, addressing these challenges cannot be seen as
the mandate of criminal justice system alone, but requires the intervention of all government departments as well
as other stakeholders, particularly those within social and economic clusters. These stakeholders will try to execute
their respective legal mandates jointly in order to contribute to a safe and secure environment for all South Africans.
It is against this backdrop that the Department of Community Safety and Liaison has introduced a number of
strategies to prevent the escalation of crime in the province. These crime strategies include inter alia; establishment
of community safety structures such as community policing forums, ward safety committees, community crime
prevention associations and community safety forums.
According to the United Nations Office on Drugs and Crime (2019), estimated global illicit manufacture of cocaine
reached an all-time high of 1 976 tons in 2017 - an increase of 25 per cent on the previous year. At the same time,
the global quantity of cocaine seized in 2017 rose by 13 per cent to 1 275 tons - the largest quantity ever reported.
Drug trafficking is often associated with other forms of crime, such as money laundering or corruption. This
international trade involves growers, producers, couriers, suppliers and dealers. According to Interpol (2019), it
affects almost all of their member countries, undermining political and economic stability, ruining the lives of
individuals and damaging communities. The end-users and addicts are often the victims of a powerful and
manipulative business. Lacking the formal regulation used in the legitimate economy, violence is the default
regulatory mechanism in the illicit drug trade. It occurs through enforcing payment of debts, through rival criminals
and organisations fighting to protect or expand their market share and profits, and through conflict with drug law
44
enforcers. Gangs or cartels that are primarily financed by the sale of illicit drugs have been implicated in a
substantial proportion of street violence and homicides.
Table 3.13: Crime levels and growth rates in KwaZulu-Natal, 2016 to 2019
Source: South African Police Service, 2019
Drug abuse amongst African youths makes them vulnerable to numerous threats. Many easily succumb to crime
and violence. In South Africa, drug abuse is on the rise. In 2012, the World Health Organization (WHO) reported
that 15 per cent of South Africa’s population had a drug problem, giving it a reputation as one of the drug capitals
of the world. The South African Depression and Anxiety Group in 2013 noted that illegal drug consumption in South
Africa is double the global norm (Ettang 2017). According to the United Nations Office on Drugs and Crime (2014),
drug use continues to exert a significant toll on the economy, with valuable human lives and productive years of
many persons being lost. It is therefore highly disconcerting that drug-related crime has escalated to the levels that
it has over such a short period of time within the province.
Table 3.13 reflects crime categories prevalent in KZN between the years 2016 and 2019. All theft not mentioned
elsewhere, Burglary at residential premises, and Drug-related crime were the top three crime categories in KZN in
2018/19 with Drug related crime dropping by whopping 35.4 per cent. It is a well-known behavioral fact that drug
Case
Difference% Change
Murder 4 014 4 382 4 395 13 0.3%
Sexual Offences 8 484 8 759 9 308 549 6.3%
Attempted murder 3 914 4 099 4 203 104 2.5%
Assault with the intent to inflict grievous bodily harm 26 824 26 693 26 878 185 0.7%
Common assault 22 285 22 842 23 521 679 3.0%
Common robbery 7 305 6 596 7 090 494 7.5%
Robbery with aggravating circumstances 22 327 21 543 22 110 567 2.6%
Total Contact Crimes ( Crimes Against the Person) 95 153 94 914 97 505 2 591 2.7%
Carjacking 3 029 2 698 2 764 66 2.4%
Robbery at residential premises 4 255 4 174 4 182 8 0.2%
Robbery at non-residential premises 2 951 3 047 3 055 8 0.3%
Robbery of cash in transit 25 30 12 -18 -60.0%
Bank robbery 1 3 0 -3 -100.0%
Truck hijacking 81 52 80 28 53.8%
Arson 699 679 754 75 11.0%
Malicious damage to property 14 010 12 958 13 704 746 5.8%
Contact-Related Crimes 14 709 13 637 14 458 821 6.0%
Burglary at non-residential premises 11 253 10 756 10 863 107 1.0%
Burglary at residential premises 41 013 38 545 38 790 245 0.6%
Theft of motor vehicle and motorcycle 8 413 8 240 8 050 -190 -2.3%
Theft out of or from motor vehicle 16 854 16 344 14 912 -1 432 -8.8%
Stock-theft 5 959 6 322 6 380 58 0.9%
Property-Related Crimes 83 492 80 207 78 995 -1 212 -1.5%
All theft not mentioned elsewhere 42 577 39 615 40 193 578 1.5%
Commercial crime 12 405 12 308 14 899 2 591 21.1%
Shoplifting 12 302 11 620 10 878 -742 -6.4%
Total Other Serious Crimes 67 284 63 543 65 970 2 427 3.8%
Total 17 Community Reported Crimes 260 638 252 301 256 928 4 627 1.8%
Illegal possession of firearms and ammunition 4 000 4 418 3 733 -685 -15.5%
Drug-related crime 50 429 53 987 35 358 -18 629 -34.5%
Driving under the influence of alcohol or drugs 13 403 18 218 17 577 -641 -3.5%
Sexual Offences detected as a result of police action 3 558 3 520 3 615 95 2.7%
Crime Detected As A Result Of Police Action 71 390 80 143 60 283 -19 860 -24.8%
CRIME DETECTED AS A RESULT OF POLICE ACTION
Crime CategoryApril 2016 to
March 2017
April 2017 to
March 2018
April 2018 to
March 2019
Comparison 2017/18 with
2018/19
CONTACT CRIMES ( CRIMES AGAINST THE PERSON)
SOME SUBCATEGORIES OF AGGRAVATED ROBBERY
CONTACT-RELATED CRIMES
PROPERTY-RELATED CRIMES
OTHER SERIOUS CRIMES
45
addicts often steal in order to fund their drug habits. It would, therefore, be expected that with a decrease in drug-
related crime, burglary, theft and violent crimes would also be on the decline. However, these crimes all seem to
be on the increase, which may imply that drug peddling is continuing undetected by police.
Truck hijacking was the fastest growing crime category in the province with a 53.8 per cent increase in the number
of cases reported in 2018/19. It was followed by Commercial crime (21.1 per cent) and Common Robbery (7.5 per
cent) over the same period. Data related to crime statistics for the main towns and cities in KZN is presented in the
Appendix (Table A3.2 to A3.10).
In an effort to reduce crime levels in the country, the newly-formulated high density stabilisation intervention
strategy has been implemented by the SAPS. This strategy focuses on cash-in-transit heists, car hijackings,
murder, and taxi violence, among others. For this strategy to be successful, the police deemed it necessary to
expand the strategy in three ways: focus on murder hot spots, to tackle domestic violence effectively, and
implement targeted and evidence-based interventions (SAPS, 2018).
3.9 Access to basic services
3.9.1 Access to electricity
While the availability of electricity by itself is not a panacea for the economic and social problems facing Africa, the
supply of electricity is nevertheless believed to be a necessary requirement for Africa’s economic and social
development (Wolde-Rufael 2006). It is a major input to industry for production, and output can be severely stunted
without it, which would adversely affect economic growth.
A more noble reason for ensuring the supply of safe and reliable electricity, however, is that of promoting social
development in the communities through infrastructure delivery; and household infrastructure in particular. With
access to electricity, households can benefit through lighting; this will enable children of school-going age to
complete homework, care-givers can complete household chores such as cooking so the family can be fed
properly. Electricity also serves as a safety mechanism through government installing street lights to promote
visibility.
One of the most pressing challenges facing the South African economy is maintaining the structural integrity of its
electricity generation network. The state-owned entity (Eskom) has come under severe strain due to maintenance
backlogs and a failure to bring new generating capacity timeously to ensure that economic activities (production)
are not disrupted, this has led to electricity demand at times outstripping supply, thereby forcing Eskom to
implement load shedding. This involves planned rolling blackouts on a rotating schedule throughout the country to
avoid total power system failure.
46
South Africa relies strongly on the exports of its precious metals to finance its current account deficit, the impact
of load shedding on mining operations (which are energy intensive) has led to a strong depreciation of the rand as
well as a stalling of economic growth and downward revisions in growth forecasts. Several ratings agencies have
also downgraded the country’s credit rating, which has had a negative impact on the outlook of the country as an
investment destination. This does not bode well for economic growth and international competitiveness of the
country as access to electricity is one of the key drivers of economic activity. However, South Africa still required
additional sources of electricity.
When load shedding occurs, mining operations are shut down and in many instances it takes several hours for
miners to be evacuated from the mines. Smelters and refineries take hours to restart after a break in power supply,
outages in traffic management systems and traffic lights cause considerable congestion and a drop in productivity,
offices dependent on internet services and technology have no option but to close, hospitals have come under
increased pressure and many other government administration services simply close as a result of load shedding.
The cumulative effects of the above on the economic capacity and outlook of the country is significantly negative.
Despite the fact that electricity has not been reliable over the past due to load shedding, it is good to see that the
share of households with connectivity have improved across all provinces over the ten-year period. The share of
households with electricity in South Africa increased from 81.4 per cent in 2008 to 91.4 per cent in 2018. KZN’s
share of electrical connections increased markedly from 74.2 per cent in 2008 to 90 per cent in 2018. On the other
hand, Eastern Cape is the only province that had the lowest share of households with regard to electrical
connections which was at 87.4 per cent in 2018, this was improved from 66.3 per cent recorded in 2008. Other
provinces also had much improvement in terms of electrical connections during the review period (See figure 3.11).
Figure 3.11: Share of households with electrical connections by provinces, 2008 and 2018
Source: IHS Markit, 2020
The power crisis with Eskom reached worrying levels in January 2020 when load shedding was implemented
despite most of the economy still being on holiday. It is for this reason that it was a welcomed decision by the
SA EC FS GP KZN LP MP NC NW WC
81.593.6
66.3
88.6 88.374.2
81.8 85.3 84.5 81.5
91.4
97.2
87.4
92.6 93.3
90.090.2 90.4 90.6 94.5
2008 2018
47
African National Congress (ANC) to approve plans to allow municipalities to buy their own electricity from
Independent Power Producers and to make it easier for businesses to generate their own electricity. Even so, 90
per cent of KZN households had access to electricity in 2018.
3.9.2 Access to water
Water is life. For millions of years, life on earth has been dependant on water for survival. When Neil Armstrong
landed on the moon in 1969 he described Planet Earth as “a shining blue pearl spinning in space”. The blue colour
is, in fact, the amount of water that is present on the surface. Approximately 70 per cent of the earth’s surface is
covered with water but of this, approximately 97 per cent is salt water, with the remaining 3 per cent being fresh
water. Of this 3 per cent, less than 1 per cent is available for life on earth, whilst the rest is in the form of ice at the
poles.
According to the Department of Water and Environmental Affairs, the demand for water will outstrip supply in the
whole of South Africa by 202522. As the human population increases with its increasing needs for survival, the
greater is the demand for water. If the infrastructure needed is not developed when needed, problems will arise,
and if water is drawn without restraint during a dry period, shortages will be the likely outcome.
The provision of dependable water supplies can have a strong positive effect on food security and income
generation for rural households. Substantial livelihood gains are likely to be made by releasing labour time normally
spent on obtaining access to water, making this labour available for production. Improved access to water can also
open up production opportunities that are dependent on the resource as an input. There is evidence that where
water is more readily available, it is used for productive uses for example irrigation of small farms, commercial
vegetable gardens and community gardens, thus providing an opportunity to increase nutritional intake.
Water is a critical input to the agricultural sector. It is an essential input for the survival of both livestock and crop,
and by implication for food security for human beings and animals. The UN estimates that by 2050, world
agriculture will need to produce 60 per cent more food globally, and 100 per cent more in developing countries to
sustain the growing population. It is further estimated that industry, energy, and households together account for
30 per cent of water demand. More developed countries have a much larger proportion of freshwater withdrawals
for industry than less developed countries, where agriculture dominates.
A further problem adding to this demand is water quality. Water quality is defined as water which is safe, drinkable
and appealing to all life on earth. In South Africa the scarce fresh water is decreasing in quality because of an
increase in pollution and the destruction of river catchments, caused by urbanisation, deforestation, damming of
22 http://www.waterwise.co.za/site/water/environment/situation.html
48
rivers, destruction of wetlands, industry, mining, agriculture, energy use and accidental water pollution. As the
human population increases, there is an increase in pollution and catchment destruction.
Figure 3.12: Share of households with piped water at or above RDP level by provinces, 2008 and 2018
Source: IHS Markit, 2020
In 2018, KZN had one of the lowest proportions of households with access to piped water in the country, at 75.9
per cent (Figure 3.12). In order to secure dependable water supply, two new dams providing a combined 800
million litres of water a day‚ are set to be built in KwaZulu-Natal over the next decade at a cost of more than R30
billion. According to Umngeni Water (2019), the huge builds - along with the completion of the Hazelmere Dam
wall expansion project - will secure the province’s water resources for the next 50 years. The biggest project is the
Smithfield Dam in the Upper uMkomazi area. In total‚ about R26 billion will be spent on the dam‚ which will add
700-million litres of water a day to KwaZulu-Natal’s water supply when full. Construction of this dam is expected to
be completed by 2030. Construction on the second dam‚ Ngwadini‚ which will feed into existing dams supplying
the KwaZulu-Natal south coast‚ is expected to start in the 2020/2021 financial year. It will cost Umgeni Water R4.2
billion and is expected to add 100 million litres of water per day to the system when complete (Umngeni Water,
2019).
From a re-use perspective, the city of uMhlathuze (Richard’s Bay) has installed a 10-container desalination
(purification) plant next to the municipal water treatment plant at Alkanstrand. The first mobile sea water purification
unit in South Africa, it comprises 10 containers and is located adjacent to the water treatment plant at Alkantstrand.
It can deliver 10 megalitres of drinking water. However, the high cost of electricity means that the unit is used
sparingly. Resultantly, solar energy is being investigated as a possible alternative. In 2018, JG Afrika delivered a
R72 million desalination plant to South32’s Hillside aluminium smelter in the same city.
SA WC EC NC FS KZN NW GP MP LP
82.495.8
60.7
90.7 94.3
71.982.9
96.081.2
68.5
86.8
98.4
67.4
94.797.2
75.1
88.1
98.5
87.9
73.7
2008 2018
49
3.9.2 Access to sanitation
Sanitation23 is the safe removal of human waste as well as the maintenance of hygienic conditions. According to
the World Health Organization (WHO), improved sanitation refers to facilities that hygienically separate human
excreta from basic human contact. These sanitation facilities include flush toilets connected to a public sewerage
system, flush toilets connected to sceptic tank or conservancy tank, pit latrine toilets with ventilation, and pour-to-
flush toilets connected to a sceptic tank. Households with such toilet facilities are regarded as having improved
sanitation (Stats SA, 2019).
There is a growing body of evidence that the benefits of invested efforts in the water and sanitation sector do not
reach those who are most in need. It is those who are easier to reach who benefit the most. In contrast, the
vulnerable population groups – the poor, the furthest in terms of distance, those living in informal settlements,
those working in the informal sector, people with disabilities - experience difficulty in accessing water and sanitation
services. Stark disparities exist across regions, between urban and rural areas, and between the rich and the poor.
Figure 3.13: Share of households with hygienic toilets by provinces, 2008 and 2018
Source: IHS Markit, 2020
The relationship between adequate sanitation and health is well documented. Slum dwellers have higher rates of
child malnourishment; prevalence of diarrhoea, malnutrition and hunger; prevalence of HIV and AIDS; and, as a
result, lower life expectancy (Isunju, Schwartz et al. 2011). The Global Burden of Disease study undertaken by the
World Bank indicates that 15 per cent of all deaths in children below 5 years of age in low- and middle-income
countries are directly attributable to diarrhoeal disease. Close to 90 per cent of the diarrhoeal disease burden is
caused by unsafe sanitation, water and hygiene. In 2018, KZN had one of the lowest proportions of households
with access to hygienic toilets in the country, at 79.9 per cent, (Figure 3.13).
23 http://www.who.int/topics/sanitation/en/ [Accessed 30 January 2015]
SA EC FS GP KZN LP MP NC NW WC
69.4
92.5
53.6
79.7 73.1 65.857.3
88.1
54.4
35.6
80.9
94.3
81.4
83.983.5
80.0
67.2
91.4
66.8
54.6
2008 2018
50
The high rate of urbanisation further exacerbates the problem for municipalities, who require water for sanitation
and aiming to prevent or eradicate slums. Environmental sustainability for communities therefore hinges mainly on
the provision of housing, water and sanitation services.
3.10 Conclusion and policy recommendations
Poverty in KZN is on a steady decline due to a concerted effort by the government to secure the futures of the
people who are struggling to meet their basic needs. The most dented type of poverty is that which is associated
with food shortage, although the quality of food afforded by the poor is not sufficient to meet the nutritional needs
of children. Income distribution remains a pertinent problem within the province as much of the wealth remains
within the hands of the White and Asian segments of the population. Most African households earn a low income,
which is barely enough to sustain their existence. This in turn leads to high deprivation levels and a greater burden
on government to offer social safety nets in the form of human settlements, water and sanitation, school and health
infrastructure, and social grants. Access to income is the key which unlocks opportunities for the provincial
populace, through adequate levels of skills and education in the relevant fields of study- those which have the
potential to unlock growth for the South African economy.
Although there is an improvement in the matric pass rate, it should be celebrated with caution given the matric
pass requirements which is significantly low (40 per cent home language, 40 per cent in two other subjects,
30 per cent for four other subjects and must pass at least 6 out 7 subjects). Assuming the percentage pass
requirements are increased to 50 per cent, there will be a significant decline in the matric pass rate. It should be
also noted that there is a very high probability that some of the learners who obtained bachelor pass at minimal
level do not have the required points for university entrance. Although there are alternative academic institutions
that can accept these matriculants to pursue skills courses at Technical and Vocational Education and Training
(TVET) colleges, but the bachelor level achieved make them see themselves as ready for university education as
they perceive TVET to be low level.
Further, some of those who make it to the university level have to undergo one year bridging course before starting
their first year of the chosen degree. This shows lack of coordination between basic education and higher
education. The cause for such incoordination is driven by the desire to get results in terms of numbers while
creating a vast number of people who will neither be in the labour force nor tertiary education. This raises the
question of whether matric results can be used as a good proxy for requisite achievement in core areas of
knowledge and competence.
51
Chapter 4: Economic Review and Outlook
4.1 Introduction
The global economy is facing increasingly severe headwinds, and slow growth is becoming disturbingly
entrenched. The uncertainty triggered by continuing trade tensions has been long-lasting, reducing economic
activity worldwide. Further, the weak business investment, policy uncertainty, risks in financial markets and long-
term stagnation, as well as persistent political uncertainty are weighing on the already fragile global economic
growth prospects.
The persistent deterioration of the global outlook reflects the unaddressed structural changes more than any
cyclical shock in the economy. The extreme weather events are on the rise, and inadequate policy action could
increase the frequency of the above events. Among advanced economies, the weakening has been broad-based,
affecting major and smaller Asian advanced economies. The slowdown in activity has been even more pronounced
across emerging market and developing economies (EMDEs), as well as few economies that suffer
macroeconomic and financial stress.
As correctly pointed out by the Organisation for Economic Co-operation and Development (OECD 2019), the
substantial uncertainty persists in the timing and nature of the withdrawal by the United Kingdom (UK) from the
European Union (EU); particularly as concerns about a possible no-deal exit (Brexit)24, which could push the UK
into recession in 2020 and lead to sectoral disruptions in Europe. Other risks that are also weighing on future
growth in the economy include, the overall slowdown in the Chinese economic growth as a result of their trade
tension with the US, financial market vulnerabilities, and high debt accompanied by a deteriorating credit quality.
In light of these challenges, the OECD (2019) has revised the global economic outlook for 2019 to 2.9 per cent,
while the forecast for 2020 and 2021 is at 2.9 per cent and 3 per cent respectively.
Taking into account both the global and national economic performance, this chapter provides an economic review
and outlook of the province of KZN. The chapter begins with an economic review and outlook from global, national
and provincial levels. This is then followed by a brief discussion of the sectorial analysis including capital formation
and tourism. The chapter concludes by providing a summary of international trade at both national and provincial
levels.
24 The term “Brexit” emanates from the success of Britain's referendum, whereby majority of people in the UK voted to leave the European Union (EU) on 23
June 2016.
52
4.2 Global economic review and outlook
The global economic performance decelerated significantly in 2019, with continued weakness in global trade and
investment. Further, the weak business investment, policy uncertainty, tedious risks in financial markets, rising risk
of long-term stagnation and the persistent political uncertainty are weighing on the already fragile global economic
growth prospects (World Bank, 2020).
As correctly pointed out by the OECD (2019), the substantial uncertainty persists about the timing and nature of
the withdrawal of the United Kingdom (UK) from the European Union (EU). A primary concern about a no-deal exit
(Brexit)25 is the speculation that it could push the UK into recession in 2020 and lead to sectoral disruptions in
Europe. Other risks about the global outlook, include the overall slowdown in the Chinese economy and significant
financial market vulnerabilities from the tension between slowing growth, high debt and deteriorating credit quality.
In light of these challenges, the OECD (2019) has revised the global economic outlook for 2019 to 2.9 per cent. It
is at its lowest annual rate since the financial crisis in 2008, while the forecast for 2020 and 2021 remained the
same at 3 per cent.
Table 4.1 depicts the world economic estimates and projections from 2017 to 2021. The table shows that over the
past two years, global growth outcomes have gradually deteriorated from 3.7 per cent in 2017 to 3.6 per cent in
2018, and is at its slowest pace since the global financial crisis in 2009. The International Monitory Fund (IMF,
2020) indicates that the global economic growth continued on a downside in 2019 thereby averaging at 2.9 per
cent due to the lower than expected economic activity in a few emerging market economies, notably India.
Nevertheless, global growth is expected to improve somewhat and record an average of 3.3 per cent in 2020 and
3.4 per cent in 2021. Notwithstanding the moderate increase projected by the IMF, the World Bank (2020) is more
pessimistic about the global growth such that it projects growth to average at 2.5 per cent and 2.6 per cent in 2020
and 2021 respectively.
The gross domestic product (GDP) growth in advanced economies is estimated to have dwindled from 2.2 per cent
in 2018 to 1.7 per cent in 2019 and expected to remain at 1.6 per cent in 2020 and 2021. According to the World
Bank (2020), the sluggish growth in advanced economies is a consequence of weaker-than-expected trade and
manufacturing activity. Data from both the IMF (2020) and the World Bank (2020) show that GDP growth in the US
slowed down to 2.3 per cent in 2019 from 2.9 per cent in 2018. Economic activity in advanced economies is
expected to decelerate further to 2 per cent in 2020 and 1.7 per cent in 2021, amid slowing investment and exports.
25 The term “Brexit” emanates from the success of Britain's referendum, whereby the majority of people in the UK voted to leave the European Union (EU) on
23 June 2016. Subsequent to the UK’s vote on 12 December 2019, Brexit will kick off on 01 February 2020.
53
Table 4.1: World economic estimates and projections (percentages), 2017 to 2021
Source: IMF and World Bank, 2020
Economic outlook in advanced economies
The 2019 trade war between US and China, which resulted in higher tariffs that have increased trade costs, while
policy uncertainty has weighed on investment and confidence. Further, support from tax cuts and changes in
government spending are expected to fade in 2020, primarily as in many other advanced economies, the US
manufacturing sector has been fragile (World Bank, 2020).
Economic activity in the Euro Area has deteriorated significantly from 2.4 per cent in 2017 to an estimated
1.2 per cent in 2019, and projected at 1.3 per cent in 2020 and 1.4 per cent in 2021. As indicated by the World
Bank (2020), several economies in the region were on the verge of recession during the first six months of 2019,
particularly with the uncertainty surrounding Brexit.26
The activity in Japan declined sharply following the impact of Typhoon Hagibis27 and the increase in the
value-added tax (VAT) in October 2019. The economy has also suffered from acute weakness in manufacturing
and exports, particularly to China, alongside declining consumer confidence (World Bank, 2020). Subsequently,
growth in Japan is estimated at 1 per cent in 2019 and expected to deteriorate to 0.7 per cent in 2020 and
0.5 per cent in 2021.
The United Kingdom (UK) is set to expand at 1.4 per cent in 2020 and 1.5 per cent in 2021, compared to
1.3 per cent posted in 2019. The projection reflects the combination of a negative impact from weaker global
26 Hong Kong, UK Germany, Japan and France are the top five countries expected to be in the verge of recession in 2020. See Fox Business (2019): These
5 countries are teetering on the brink of a recession, 16 August 2019, Available online: https://www.foxbusiness.com/economy/global-recession-china-
germany-uk-italy-japan, [Accessed 30 January, 2020]
Italy, the EU’s fourth-largest economy, was in a technical recession for the second half of 2018 and has faced continued economic woes from weak
productivity, high unemployment, huge debt and political turmoil.
27 Typhoon Hagibis, which battered Japan earlier this month and caused widespread flooding that killed at least 80 people. See Mormile, D. (2019): Deadly
typhoon forces Japan to face its vulnerability to increasingly powerful storms, 22 October 2019, available online:
https://www.sciencemag.org/news/2019/10/deadly-typhoon-forces-japan-face-its-vulnerability-increasingly-powerful-storms, [Accessed on 11 December
2019]
2017 2018 2019 2020f 2021f 2017 2018 2019 2020f 2021f
World 3.7 3.6 2.9 3.3 3.4 3.1 3.0 2.4 2.5 2.6
Advanced Economies 2.4 2.2 1.7 1.6 1.6 2.3 2.1 1.6 1.4 1.5
US 2.3 2.9 2.3 2.0 1.7 2.2 2.9 2.3 1.8 1.7
Euro Area 2.4 1.9 1.2 1.3 1.4 2.4 1.8 1.1 1.0 1.3
Japan 1.7 0.8 1.0 0.7 0.5 1.9 0.9 1.1 0.7 0.6
Emerging countries 4.7 4.5 3.7 4.4 4.6 4.5 4.3 3.5 4.1 4.3
Russia 1.5 2.3 1.1 1.9 2.0 1.6 2.3 1.2 1.6 1.8
China 6.9 6.6 6.1 6.0 5.8 6.8 6.6 6.1 5.9 5.8
India 6.7 6.8 4.8 5.8 6.5 7.2 7.2 5.0 5.8 6.1
Brazil 1.0 1.1 1.2 2.2 2.3 1.1 1.1 1.1 2.0 2.5
Sub-Saharan Africa 2.8 3.1 3.3 3.5 3.5 2.6 2.5 2.4 2.9 3.1
Nigeria 0.8 1.9 2.3 2.5 2.5 0.8 1.9 2.0 2.1 2.1
South Africa 1.3 0.8 0.4 0.8 1.0 1.4 0.8 0.4 0.9 1.3
World economic review and outlook
IMF World Bank
54
growth, the ongoing Brexit uncertainty and a positive impact from higher public spending announced in the 2019
Spending Review (IMF, 2019 & 2020).
Economic outlook for Emerging Market and Developing Economies (EMEDs)
The IMF (2020) maintains that economic growth among the EMDEs group is estimated to have dropped slightly
from 4.5 per cent in 2018 to 3.7 per cent in 2019. The region’s performance is however projected to gain momentum
and expand to 4.4 per cent in 2020 and 4.6 per cent in 2021. A modest recovery in EMDEs continues to be
constrained by subdued investment, with industrial production, trade flows, and sharp investment deceleration in
2019.
Growth has been particularly weak in EMDEs and have experienced the persistent effects of varying degrees of
financial pressures or other individual factors in the past couple of years. This weakness has also spread to other
economies that had previously shown resilience. In all, growth of about 60 per cent in EMDEs is estimated to have
slowed last year. In many economies, subdued economic activity has been somewhat cushioned by still-resilient
consumption and a shift toward more supportive monetary policy (World Bank, 2020).
In Russia, output growth picked up to a six-year high of 2.3 per cent in 2018, despite tightening international
economic sanctions and financial market pressures. The economic activity in Russia was primarily supported by
the rise in oil prices, a substantial contribution from net exports, as well as once-off factors such as energy-related
construction projects and the hosting of the 2018 soccer World Cup. Russia's economy has therefore recorded an
estimated 1.1 per cent in 2019 but projected to moderate to 1.9 per cent in 2020 and 2 per cent in 2021. These
projections are mostly driven by downside risks such as escalating trade and technology tensions (World Bank,
2019 & 2020).
Despite the robust growth rate of 6.6 per cent in China in 2018, GDP continued to deteriorate to an estimated
6.1 per cent in 2019 and expected to further decelerate to 5.8 per cent in 2020 and 2021. The downward projections
for the Chinese economy are attributed to the effects of escalating tariffs and weakening external demand. This
has exacerbated the slowdown associated with needed regulatory strengthening to rein in the accumulation of
debt (IMF, 2019).
Further, the envisaged partial rollback of past tariffs and a pause in additional tariff hikes as part of “Phase One"
trade deal with the US is likely to ease the near-term cyclical weakness. However, unresolved disputes on broader
US-China economic relations as well as needed domestic financial regulatory strengthening are expected to
continue weighing on economic activity (IMF, 2020).
India’s economy is estimated to have recorded 4.8 per cent in 2019, down from 6.8 per cent in 2018. The country’s
activity was constrained by insufficient credit availability as well as the subdued private consumption. Weakness
in credit from non-bank financial companies is expected to remain (World Bank, 2020). The country’s economic
55
activity is, however, expected to moderate to 5.8 per cent in 2020 and 6.5 per cent in 2021 supported primarily by
the monetary and fiscal stimulus and the subdued oil prices (IMF, 2020).
The Brazilian economy is estimated to have expanded by 1.2 per cent in 2019, following a 1.1 per cent growth in
the previous year. This was the most robust growth rate since the recession in 2016, whereby the economy of
Brazil contracted at an average of 3.1 per cent. The GDP growth rate in Brazil is projected at 2.2 per cent and
2.3 per cent in 2020 and 2021, respectively. Bilateral tariff hikes between China and the US afforded an initial
improvement to Brazil’s soybean exports, which has since faded as demand slowed and the soybean price
differential between Brazil and the rest of the world narrowed (World Bank, 2020).
Economic outlook for Sub-Saharan Africa
The GDP growth in the Sub-Saharan African (SSA) region is estimated at 3.3 per cent in 2019 and expected to
remain at 3.5 per cent in 2020 and 2021. The strong growth in many non-resource-intensive countries partially
offsets the lacklustre performance of the region's largest economies28. Higher oil prices earlier in 2019 have
supported the subdued outlook for Nigeria and some other oil-exporting countries in the region (IMF, 2019). The
three largest economies29 of the region are projected to continue their lacklustre performance, while many other
economies, especially the more diversified, are experiencing substantial growth.
Angola is estimated to have contracted by 0.3 per cent in 2019 due to a decline in oil production, and recover to
1.2 per cent in 2020 (IMF, 2019a). The African Development Bank (2019) is, however, more optimistic and expects
Angola to recover from the recession and grow by 1.2 per cent in 2019 and 3.2 per cent in 2020.
Despite a moderate rebound in the second quarter, growth in South Africa (SA) is estimated to remain subdued at
0.4 per cent in 2019. This reflects a downward revision for SA, where structural constraints and deteriorating public
finances are holding back business confidence and private investment (IMF, 2020). The World Bank (2020)
maintains that the persistent policy uncertainty further prejudices SA's weak outlook, subdued business
confidence, infrastructure bottlenecks especially in electricity supply, and weakening external demand particularly
from the Euro Area and China. The financial stress on the public energy utility has also worsened the government’s
budget balance and increased debt sustainability concerns.
Risks to the global outlook
The IMF (2020) identifies the rising geopolitical tensions, especially between the US and Iran, as one of the factors
that could disrupt global oil supply, and weaken the already uncertain business investment decisions. The IMF is
28 World Bank (2018): The World Bank in Africa, three largest economies of the region are Nigeria, Angola, and South Africa (SA), available online:
https://www.worldbank.org/en/region/afr/overview, accessed on 06 December 2019.
56
also concerned about the trade barriers between the US and its trading partners, particularly China, because their
disputes have extended to technology and disrupted global supply chains. These factors need to be addressed
urgently, otherwise it could trigger immediate shifts in financial sentiment, portfolio reallocations toward safe assets,
and rising rollover risks for vulnerable corporate and sovereign borrowers.
Over and above the challenges raised by the IMF, the World Bank (2020) identifies the broad-based slowdown in
labour productivity growth over the past decade, especially in EMDEs. Labour productivity gaps with advanced
economies remain substantial, with workers in the average EMDE producing less than one-fifth of the output of
labourers in developed economies.
The World Banks is also concerned about the high levels of foreign currency-denominated, short-term, or non-
resident-held debt that make countries more vulnerable to shifts in market sentiment, currency depreciation, or
spikes in global interest rates. Since 2010, EMDEs total external debt has risen to 26 per cent of GDP on average
in 2018, reflecting sizable and persistent current account deficits (World Bank, 2020). In 2018, 55 per cent of
EMDEs had weaker current account balances than was the case in 2010. Disturbingly, the number of countries
with fiscal deficits has also risen. Further, fragile institutional and legal environment in less developed countries,
including property rights are weak. This makes financial intermediation from private savers to private borrowers
costly and risky, inducing banks to limit this activity and hold safer government securities.
The global economic outlook is also expected to be hindered by the spread of coronavirus30 outbreak. In February
2020, the World Health Organisation (WHO, 2020)31 declared coronavirus outbreak as a case of global emergency,
notably as it continued to spread outside China. The WHO warned that the uncertainty about the duration of the
epidemic, weighed heavily on global financial markets with stock markets and emerging market currencies
(including the rand) suffering significant losses. The report further maintained that the first death had been reported
outside of China, in the Philippines. According to this report, there were 12 411 confirmed cases of coronavirus
respiratory disease reported by provinces, regions and cities in China.
4.3 South African economic review and outlook
The global economy has been growing gradually, while interest rates remained low since 2013. However, the
South African economy’s performance remained restrained over the same period, thereby experiencing its most
prolonged business cycle downturn since 1945 (National Treasury, 2019). The downward trend is likely to persist
over the near term due to unfavourable global developments and internal structural factors.
30 Coronavirus is a family of viruses known for containing strains that cause potentially deadly diseases in mammals and birds. In humans, the virus is typically
spread via airborne droplets of fluid produced by infected individuals. See https://www.sciencealert.com/coronavirus, Accessed on 04 February 2020
31 WHO (2020): Novel Coronavirus(2019-nCoV) Situation Report – 13, data as of 02 February 2020, available online:
https://www.who.int/emergencies/diseases/novel-coronavirus-2019/situation-reports, Accessed on 04 February 2020
57
The most recent global risks include but not limited to, the trade tensions and Brexit uncertainty. The trade tensions
between the world's economic powerhouses, US and China, have weighed substantially on the global trade growth
and thus economic prospects. With regards to the Brexit impact, South Africa (SA) to a large extent is affected
through its trade and economic relations with both the European Union (EU) and the United Kingdom (UK).
The internal structural factors, some of which are well documented and identified in the National Development Plan
(NDP), have impeded the much-needed growth in economic activity. These include high levels of inequality, spatial
disparities, low levels of education outcomes, uneven quality of public services and inadequate state capacity.
Nevertheless, a wide range of policies have been in place to address these challenges, but it is noted that progress
has been minimal. Further, other factors that have impacted negatively on the growth prospects include historically
low business and consumer confidence, falling manufacturing capital stocks, policy and political uncertainty. The
latter have weighed on confidence, compounded by drought and electricity supply shocks (National Treasury,
2019).
Figure 4.1 depicts SA's GDP growth rate and GDP-per capita from 1994 to 2021. The post-financial crisis period
has been characterised by consistent economic decline whereby output grows at an average of 1.7 per cent, which
is substantially lower than the average growth of 3.7 per cent realised in the pre-financial crisis period. The
economic performance began a downward trajectory after the international commodity price shock in 2011 and
has never fully recovered to its highest potential. Further, it remains unacceptably below the 5 per cent growth
targeted in the National Development Plan (NDP).
In 2018, economic activity continued at a slow pace owing to a technical recession reported in the first half of the
same year and lower than expected real GDP in the final quarter of the year. Real GDP remained unappealingly
low with an aggregated growth rate of 0.8 per cent. The beginning of 2019 was no exception to the preceding year,
with real GDP contracting by an annualised rate of 3.1 per cent in the first quarter; the most substantial contraction
since the global financial crisis of 2009 (Statistics South Africa [Stats SA], 2019a).
The sharp decline in economic growth was attributed to the unprecedented electricity-supply disruptions and
prolonged strike at a large gold mine that hampered output (South African Reserve Bank [SARB], 2019).
Nonetheless, real economic activity picked up modestly in the second quarter, whereby real GDP increased by a
revised annualised rate of 3.2 per cent. The rebound was broad-based with actual output rising in the primary,
secondary and tertiary sectors (Stats SA, 2019b).
58
Figure 4.1: South African GDP growth rate and GDP-per capita, 1996 - 2021
Source: Stats SA, 2019 & IMF 2020
The rebound was however short-lived as the real GDP suffered yet another contraction of 0.6 per cent in the third
quarter of 2019. Data from Stats SA further shows that the three most significant negative contributors to growth
in the GDP in the third quarter were mining, manufacturing and transport, storage and communication industries.
The mining industry decreased by 6.1 per cent; manufacturing industry decreased by 3.9 per cent and transport,
storage and communication industry shrank by 5.4 per cent. The three most considerable positive contributors to
the GDP growth came from trade, catering and accommodation; finance, real estate and business; and general
government (Stats SA, 2019c).
The sluggish and subdued national economy has prompted the South African Reserve Bank (SARB, 2020) to
revise its estimate for SA’s growth for 2019 down to 0.4 per cent. The SARB further cut down its forecast for 2020
and 2021 to 1.2 per cent and 1.6 per cent, respectively. As evident in table 4.1, both the IMF (2020) and the World
Bank (2020) have also dropped the country’s growth rate for 2019 to 0.4 per cent and project a less than
1 per cent growth for 2020. The IMF (2020), however, expects SA’s GDP to improve to 1 per cent in 2021, while
the World Bank projects 1.3 per cent.
Composite business cycle indicators for SA
The projected slow economic performance for SA is also indicated by the SARB’s composite leading business
cycle indicator32, which increased marginally by 0.5 per cent from 103.9 index point in October 2019 to 104.4 index
point in November. This observation supports the optimism that six of the ten available component time series
increased while four decreased. The most substantial positive contributions to the movement in the composite
leading business cycle indicator in the month under review came from an acceleration in the twelve-month
percentage change in job advertisement space and an improvement in the BER's Business confidence index.
32 The business cycle indicators (BCI) are a composite of leading, used to forecast changes in the direction of the overall economy of a country. See the
SARB (2020): Composite business cycle indicators for SA, released on 21 January 2020, Available online: [Accessed, 22 January 2020]
-4.0
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
GDP growth rate GDP-Per capita
Outlook
59
Business Confidence Index
The Rand Merchant Bank Bureau for Economic Research (RMB/BER) business confidence index (BCI) in SA rose
for the first time in two years to 26 in quarter four of 2019 after hitting a 20-year low of 21 in the preceding quarter,
as sentiment improved among constructors, manufacturers and retailers. Still, confidence remained stuck in
negative territory, with the index well below the three year high of 44 reached in quarter one of 2018. At current
levels, business confidence remains consistent with the sluggish economy. The SA’s BCI averaged 43.43 index
points from 1975 until 2019, reaching an all-time high of 92 in the third quarter of 1980 and a record low of 12 index
points in the fourth quarter of 1997.33
Purchasing Managers’ Index
The seasonally adjusted Absa Purchasing Managers' Index (PMI)34 plunged lower to 47.1 index points in
December 2019 from 47.7 points recorded in November 2019. The December index was about one point below
the average recorded in 2019. Similar to both the composite leading business cycle indicator and the BCI, PMI
paints a depressing picture of the performance of the manufacturing sector through 2019 as the headline PMI only
managed to remain above 50 points for two months in the year. Effects of the load shedding and persistent weak
domestic demand, coupled with more intense headwinds from the global economy, have significantly affected SA's
economic activity in 2019.
Consumer Confidence Index
The First National Bank / Bureau for Economic Research (FNB/BER) shows that the three sub-indices of the
Consumer Confidence Index (CCI) did not change materially between the third and fourth quarters of 2019.35
Following a massive deterioration in the economic outlook sub-index of the CCI during the third quarter, the
economic outlook index only expanded by 3 index points to 14 in the fourth quarter of 2019.
The majority of consumers, therefore, still expect SA's economic prospects to deteriorate in 2020. The household
financial outlook sub-index of the CCI fell by another index point, from 12 to 11 points, while the index measuring
the appropriateness of the present time to buy durable goods such as vehicles, furniture, household appliances
and electronic products dropped further from (-15) to (-18) during the fourth quarter. Both the household finances
and time-to-buy durable goods sub-indices of the CCI were at a two-year low in the fourth quarter of 2019.This low
CCI implies that consumer sentiment remains depressed, because of persistently high unemployment rate and
Eskom's ongoing electricity supply crisis.
33 BCI can vary between 0 and 100, where 0 indicates an extreme lack of confidence, 50 neutrality and 100 absolute confidence. See the RMB/BER, available
online: https://www.ber.ac.za/BER%20Documents/BER-press-release/?doctypeid=1068&year=2019#11521, [Accessed on 20 December 2019].
34 PMI is an indicator of economic health for the manufacturing and service sectors. It provides information about current business conditions to company
decision-makers, analysts and purchasing managers.
35 FNB/BER (2020): FNB/BER Consumer confidence index, issued by FNB, 14 January 2020, Available online
https://www.ber.ac.za/BER%20Documents/BER-press-release/?doctypeid=1068&year=2019#11521, [Accessed on 21 January 2020]
60
Final household consumption expenditure
Table 4.2 reflects macroeconomic performance and projections in SA from 2017 to 2022. Following the observation
from CCI's depressing trend, final consumption expenditure by households decreased moderately from
2.1 per cent in 2017 to 1.8 per cent in 2018. The sluggish spending by households is detrimental to the national
economic performance, primarily as private consumption constitutes an excess of 60 per cent of the country's
GDP. Given the dire economic conditions, consumption expenditure by households recorded a growth rate of
1 per cent in the first half of 2019 compared with the corresponding period of 2018 (National Treasury, 2019). The
report maintains that household spending on non-essential items has fallen dramatically due to rising
unemployment, successive fuel price hikes and tax increases. Further, growth in households' consumption
expenditure is expected to have averaged at 1.3 per cent in 2019 and 2020, before accelerating further to 1.5 per
cent in 2021.
Table 4.2: Macroeconomic performance and projections, 2014 to 2020
Source: National Treasury, 2019
Risks to the South African outlook
Government Debt
According to the SARB (2019), the national economic outlook is at risk from further revenue shortfalls amid
persistent slow domestic economic growth and higher expenditure due to demands for financial support by the
financially strained state-owned entities (SOEs). The continued deterioration in economic activity negatively
impacts on the revenue collection capacity, such that the budget deficit and debt stock are expected to remain
elevated. The budget deficit is anticipated to expand to 6.2 per cent in 2019/20 while the debt-to-GDP is projected
to rise to 71.3 per cent in the 2022/23 financial year (National Treasury (2019).
The IMF (2020a) is therefore encouraging the country’s government to focus on maintaining medium-term debt
sustainability through a growth-friendly and expenditure-based fiscal consolidation. The report also highlights the
importance of reductions in the public wage bill and fiscal contingencies from SOEs, coupled with improved tax
Estimate
2017 2018 2019 2020 2021 2022
Final consumption expenditure by households: Total (PCE) 2.1 1.8 1.3 1.3 1.5 1.7
Final consumption expenditure by government 0.2 1.9 1.8 1.8 1.1 0.6
Gross fixed capital formation (Investment) 1 -1.4 -0.8 0.8 1.3 1.8
Gross domestic expenditure (GDE) 1.9 1.0 1.4 1.1 1.5 1.7
Exports of goods and services -0.7 2.6 -1.7 2.5 2.8 3.1
Imports of goods and services 1.0 3.3 1.1 1.9 2.6 3.0
Real GDP growth 1.4 0.8 0.5 1.2 1.6 1.7
GDP inflation 5.3 3.9 4.8 4.9 4.9 4.8
Gross domestic product at current prices (R billion) 4 654 4 874 5 132 5 449 5 804 6 187
Headline CPI inflation 5.3 4.7 4.3 4.9 4.8 4.8
Current account balance (percentage of GDP) -2.5 -3.5 -3.4 -3.5 -3.5 -3.5
Actual Forecast
61
administration and compliance. The IMF concludes by emphasising that these reforms need to be prioritised
without compromising the protection of pro-poor social spending, making education and health spending more
efficient, especially given the current high poverty level and unemployment rate in SA (IMF, 2020a).
Load shedding
Another significant risk to the national economic outlook is the continuous power outages that are currently taking
place in the country due to insufficient power supply. Generally, electricity is an input to most industries that are
key drivers to the economy such as mining, manufacturing, and commercial industries. The power cuts portray a
bleak picture about the policy environment in the country and may deter the investor confidence. Further, it could
also contribute to the looming threat of a Moody’s credit rating downgrade. Overall, load shedding that persists at
this nature has an impact on foreign direct investment, political and economic stability, employment and economic
growth.
Credit rating agencies
Fitch Ratings, Moody's and S&P Global Ratings, the major global Sovereign Credit Rating agencies all have a
negative outlook on SA's long-term foreign currency ratings. Their main concern is the fiscal challenges facing the
country. They are also worried about the country's subdued economic outlook, which in turn reduces tax revenue
collection. The lacklustre economic outlook is likely to raise the risk of the country losing its last remaining
investment-grade rating, from Moody's Investors Service, potentially leading to outflows of foreign capital which is
needed to boost the SA's economic activities.
A credit rating downgrade to junk status has the potential to affect the country, thereby increasing the cost of
borrowing and making it difficult for many South Africans to borrow money from commercial banks. Further,
international funds are likely to leave the country, resulting in a significant amount of capital outflow. There are also
possibilities that the rand might weaken, leading to imported inflation.
Liquidations and insolvencies
Data from Stats SA (2020a) shows that the total number of liquidations increased by 10.7 per cent in 2019 to
2 042 compared to 1 845 in 2018. The most significant contributing industry to the total number of business either
voluntarily or forced liquidation is financing, insurance, real estate & business services with 668 liquidations or
32.7 per cent. This was followed by the unclassified at 540 liquidations or 26.4 per cent and trade, catering &
accommodation (457 liquidations or 22.4 per cent). The report further reveals that the estimated number of
insolvencies increased by 6.7 per cent between November 2018 and November 2019.
The perpetual increase in the number of liquidations is detrimental to the economy of the country as it, directly and
indirectly affects the already high levels of unemployment and poverty rates. Further, Government revenue in the
62
form of tax is adversely affected and thus hindering service delivery and the NDP's vision 2035 of increasing
inclusive economic growth to above 5 per cent.
Economic structural reforms
In August 2019, the National Treasury circulated the “Economic transformation, inclusive growth, and
competitiveness: Towards an Economic Strategy for South Africa” plan (Treasury, 2019a). The report
acknowledges that a combination of low growth and rising unemployment means that SA’s economic trajectory is
unsustainable. Some of the recommendations include modernising network industries, lowering barriers to entry
and addressing distorted patterns of ownership through increased competition and small business growth.
Prioritisation of labour-intensive growth in sectors such as agriculture and services, including tourism; implementing
focused and flexible industrial and trade policy are also pivotal. Another critical area raised in the plan, relates to
the promotion of export competitiveness and harnessing regional growth opportunities.
The argument by the National Treasury is also echoed by the IMF (2020a) which urges SA to implement reforms
that would put the economy on a sustainable and inclusive growth path. The IMF argued that by applying the
changes now, SA would benefit from the benign financing conditions in international markets and prevent disruption
from an abrupt adjustment in future. According to the report, it is partly due to the absence of these necessary
reforms that the currently weak private investment and productivity growth have negatively affected the country’s
economic activity.
4.3.1 Inflation and monetary policy
Global inflation rate
The broad synchronised global expansion that began mid-2016 through mid-2018 has weakened, thereby causing
the core inflation to slide further below target across advanced economies and below historical averages in many
emerging markets and developing economies (EMDEs). Inflation remained lower across most EMDEs amid more
subdued activity (IMF, 2020). Table 4.3 depicts global inflation rates from 2013 to 2021. The global consumer price
inflation (CPI) is estimated to have averaged at 3.6 per cent in 2019. This was slightly higher than that of advanced
economies (1.6 per cent), but lower than EMDEs and Sub-Saharan Africa at 4.9 per cent and 7.9 per cent,
respectively. The table shows that the Sub-Saharan region experienced the highest consumer price inflation during
the period, followed by EMDEs. Advanced economies are expected to benefit from the softening energy prices
and the moderation in growth, thus average at 1.7 per cent in 2019 and 2020.
63
Table 4.3: Global inflation rates 2013 – 2021
Source: IMF, 2019
Inflation rate South Africa
Figure 4.2 illustrates consumer price inflation (CPI) headline inflation rate36 from 2006 to 2018. Despite the
challenging economic climate in South Africa (SA), inflation rate has been near the mid-point of the inflation target
band of 3 per cent to 6 per cent. On average, headline inflation rate was 4.7 per cent in 2018, moderately lower
than in 2017 where it averaged at 5.3 per cent. This trend was pertinent to core-inflation37, which averaged at 4.3
per cent. Low food prices supported the favourable inflation as drought dissipates and resilient rand exchange rate
against major currencies. In food and non-alcoholic beverages (NAB), inflation moderated from 6.9 per cent in
2017, down to 3.6 per cent in 2018.
Figure 4.2: Consumer price index (CPI) headline inflation rate, 2006 – 2018
Source: IMF, 2019 and SARB, 2019
36 Headline inflation measures the total increase in prices within an economy, including prices of commodities such as food and energy such as oil and fuel,
which tend to be much more volatile and prone to inflationary spikes.
37 Core-inflation generally refers to the change in costs of goods and services, but does not include those items from the food and energy sectors. The prices
for these items are much more volatile.
Average 1996
- 20122013 2014 2015 2016 2017 2018 2019 f 2020 f
World 4.8 3.3 2.9 2.9 3.0 3.3 3.6 3.5 3.4
Advanced
economies2.0 1.3 0.7 0.5 1.5 1.7 1.6 1.7 1.7
EMDEs 8.3 4.9 4.7 4.7 4.2 4.5 4.9 4.7 4.6
SSA 12.2 6.1 6.1 8.1 12.1 10.2 7.9 9.0 7.4
Note : f, represents forecast
7.1
10.0
15.6
9.5
1.4
7.1 7.1
5.7
7.6
5.1
10.6
6.9
3.6
2006 2008 2010 2012 2014 2016 2018
CPI food and NAB Headline inflation CPI excluding food & NAB and fuel
64
The headline inflation rate continued to be around the mid-point of the inflation target. According to Stats SA (2020),
headline inflation rate was reported at 4 per cent in December 2019, up from 3.6 per cent in the preceding month.
Stats SA (2020) estimates inflation to have averaged 4.1 per cent in 2019. The lower inflation rate in 2019 prompted
the SARB to reduce the repurchase (repo) rate by 25 basis points to 6.25 per cent, resulting in the national prime
rate to drop to 9.75 per cent in January 202038. The SARB (2020) expects inflation to remain within the targeted
range but slightly higher than the mid-point of 4.5 per cent and average at 4.7 per cent in 2020 and 4.6 per cent in
2021.
4.4 KwaZulu-Natal economic review and outlook
As the South African economy continues to deteriorate due to various global and domestic structural factors, the
real economic activity in KwaZulu-Natal (KZN) is also showing a persistent downward trend. It is evident from figure
4.3 that the provincial economy has not fully recovered from the downward trajectory caused by the decline in
international commodity prices in 2011. Instead, real economic growth has been consistently declining in the
subsequent years with no significant increase. In 2018, KZN generated a regional real gross domestic product
(GDP-R) amounting to R505.586 billion, which is equivalent to a 0.7 per cent year-on-year growth. This suggests
the fact that the provincial economy continued on the downside in 2018 when compared to 2017 where it recorded
an average growth rate of 1.4 per cent. Nevertheless, KZN remained the second economic hub with 16.1 per cent
contribution to the national GDP. This contribution is significantly lower than that of Gauteng Province (GP) at
35.3 per cent, but higher than Western Cape (WC) at 13.8 per cent (Figure A4.1 in Appendix).
Figure 4.3: Economic growth rate in KZN and SA, 1996 to 2020
Source: IHS Markit, 2020
38 Repo rate is the benchmark interest rate charged by the SARB when it lends money to commercial banks. Prime lending rate, on the other hand, is the
interest rate charged by commercial banks to their customers, including households and other organisations such as the business sector.
3.8
2.4
0.3
2.0
3.6
2.9
3.3
3.0
4.4
5.1
5.2
5.4
3.2
- 1.5
3.03.3
2.22.5
1.8 1.3
0.6
1.3
0.7
0.7
1.1
1.4
5.6
1.8
0.6
0.1
4.3
5.0
2.0
2.7
4.4
5.75.4
6.1
3.8
- 1.4
3.6 3.7
2.6 2.5 2.4
0.90.7
1.8
0.9
-0.4
0.4 1.3
- 2.0
- 1.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
SA-GDP at constant 2010 prices
KZN-GDP at constant 2010 prices
Targeted GDP
Potential GDP
Population growth rate
YEAR ON YEAR GROWTH RATE Outlook
65
The KZN economy showed no signs of a significant recovery in 2019 as the economic activity contracted by
4.1 per cent and 0.9 per cent in the first and third quarters of the year respectively. The contraction in two quarters
will certainly offset the moderate positive growth of 1.9 per cent recorded in the second quarter (Table A4.1 in
Appendix). It is against this backdrop that the provincial economic growth is projected to average at (-0.4) per cent
in 2019, before picking up somewhat to 0.4 per cent in 2020 and 1.3 per cent in 2021 (Figure 4.3). The projected
lacklustre growth is below the 5 per cent that is targeted in the Provincial Growth and Development Plan (PGDP),
which aims for inclusive and sustained economic growth. Also, this anaemic economic performance contributes to
the low employment rate in the province, as the economy is unable to create employment opportunities to meet
the growing labour force, especially new entrants.
Figure 4.4 displays KZN GDP-R contribution by District Municipalities and eThekwini Metro. It is evident from the
figure that the KZN’s economy is concentrated mostly in the Metro with an estimated GDP-R contribution of 59.6
per cent in 2018.The significant contribution by eThekwini could be attributed to various economic activities and
the fact that it is home to a largest and busiest harbour port. The Durban port is the largest and busiest shipping
terminal in sub-Saharan Africa as it handles up to 31.4 million tons of cargo each year. Also, it is noted that Districts
that have urban settings have significant contribution to the provincial economy. In this regard, uMgungundlovu
and King Cetshwayo were the largest contributors after the Metro with 11 per cent and 7.1 per cent respectively.
On the other hand, Districts that are characterised by rural settings such as uMzinyathi (1.5 per cent),
uMkhanyakude (1.8 per cent) and Harry Gwala (2.1 per cent) contribute the least toward the GDP-R due to limited
economic activities and low employment rates.
Figure 4.4: Percentage share of KZN’s real GDP by districts, 2018
Source: IHS Markit, 2020
66
4.5 Sector performance and contribution to GDP
Table 4.4 illustrates sector performance and contribution to R-GDP over the period 2011 to 2020. The provincial
economy is unevenly distributed toward the tertiary sector, with its real gross value added (GVA) recorded as the
largest in 2018. Real GVA by tertiary sector was estimated at 62.6 per cent in 2018, slightly higher than 61.3 per
cent and 62.3 per cent recorded in 2011 and 2017, respectively. Tertiary is expected to continue to outplay primary
and secondary sectors and dominate the KZN’s economy in respect of real GVA. This trajectory is estimated at
63.4 per cent in 2019 and projected to rise marginally and remain at 63.5 per cent in 2020 and 2021.
Table 4.4: Sector contribution to GDP in KZN, 2011 to 2021
Source: IHS Markit, 2020
The real GVA contribution by the tertiary sector is driven mainly by the community services, which shows a
consistent upward trend over the period under review. In 2018, community services contributed 20 per cent to real
GDP of the province and is estimated to have risen slightly to 20.4 per cent in 2019 and projected to drop marginally
to 20.1 per cent and 19.8 per cent in 2020 and 2021, respectively. The enormous marked contribution by
community services has been on the rise as it expanded from 19.6 per cent recorded in 2011 (Table 4.4). In terms
of sub-industries, growth in community services emanated from other service activities which increased by 3.1 per
cent between 2017 and 2018, this was closely followed by health and social work with 1.9 per cent (Table A4.1 in
Appendix).
The finance industry was the second-largest contributor toward real GVA by tertiary sector and has shown
sustainable growth over the period 2011 to the projected 2021. Finance has grown notably from 16.4 per cent in
2011 to an estimated 17 per cent and 17.3 per cent in 2018 and 2019, respectively. The industry is projected to
expand further to 17.5 per cent in 2020 and 17.7 per cent in 2021. The substantial contribution by the finance
industry was driven mostly by other business activities and real estate activities which increased by
2.9 per cent and 2.8 per cent respectively between 2017 and 2018.
Trade is also one of the significant contributors to real GVA by the tertiary sector. The industry was the third-largest
contributor with 14.2 per cent in 2018 and 2019, respectively. The contribution by this industry has been fluctuating
2019 2020 2021
Primary Sector 6.1 6.1 6.2 6.5 6.1 5.6 6.7 6.4 5.9 5.9 6.0
Agriculture 4.3 4.3 4.4 4.7 4.3 3.8 4.9 4.7 4.3 4.4 4.4
Mining 1.8 1.7 1.8 1.9 1.8 1.8 1.8 1.7 1.6 1.6 1.5
Secondary Sector 23.6 23.5 23.3 23.1 22.7 22.7 22.3 22.2 22.0 21.8 21.8
Manufacturing 17.2 17.1 16.9 16.6 16.4 16.4 16.1 16.1 16.0 15.9 15.9
Electricity 2.4 2.3 2.2 2.2 2.1 2.0 2.0 2.0 1.9 1.9 1.9
Construction 4.1 4.1 4.2 4.3 4.3 4.3 4.2 4.1 4.1 4.0 4.0
Tertiary Sector 61.3 61.5 61.5 61.7 62.3 62.9 62.3 62.6 63.4 63.5 63.5
Trade 14.2 14.4 14.2 14.1 14.3 14.5 14.2 14.2 14.2 14.3 14.4
Transport 11.1 11.1 11.1 11.2 11.3 11.4 11.4 11.5 11.5 11.6 11.6
Finance 16.4 16.3 16.3 16.3 16.6 16.8 16.8 17.0 17.3 17.5 17.7
Community services 19.6 19.7 19.8 20.0 20.0 20.2 19.9 20.0 20.4 20.1 19.8
2016 2017 2018Outlook
2011 2012 2013 2014 2015
67
over the period under review, such that it increased from 14.2 per cent in 2011 to the highest of 14.5 per cent in
2016. The most critical sub-industries within the tertiary sector were hotels and restaurants which grew by
2.9 per cent and retail trade and repairs of goods with 2.7 per cent between 2017 and 2018 (Table A4.1 in
Appendix).
Similar to the national trend and across provinces, real GVA by the secondary sector was the second largest at
22.2 per cent in 2018, albeit suffered a marginal drop from 22.3 per cent estimated in 2017. As evident in figure
4.4, the industry had been consistently volatile, thereby deteriorating without any sign of breaching the highest
percentage recorded in 2011. Projections indicate that the secondary sector will remain at 21.8 per cent in 2020
and 2021, respectively, down from 22 per cent estimated in 2019.
The persistent downward trajectory in manufacturing is attributable to a moderate decline in manufacturing from
17.2 per cent in 2011 to 16.1 per cent in 2018 and 16 per cent in 2019. The industry is expected to remain
unchanged at 15.9 per cent in 2020 and 2021. In terms of sub-industries, the most substantial contraction was
realised in textiles, clothing & leather goods with 2.8 per cent, followed by wood & wood products with 1.2 per cent
between 2017 and 2018. Despite these notable contractions, food, beverages & tobacco recorded a robust growth
of 4.8 per cent, while other non-metallic mineral products expanded by 2.2 per cent between 2017 and 2018 (Table
A4.1 in Appendix).
The sluggish performance by manufacturing in KZN follows the national trend. Stats SA (2020b) manufacturing
production decreased by 3.6 per cent in SA in November 2019 compared with November 2018. Nine of the ten
manufacturing divisions reported negative growth rates over this period. The most substantial negative
contributions towards manufacturing were wood and wood products, paper, publishing & printing which contracted
by 9.3 per cent; motor vehicles, parts & accessories and other transport equipment which recorded -10 per cent.
With a contribution of 4.1 per cent toward real GVA in 2018, construction is also significant in the secondary sector
in KZN. Despite the insignificant drop from 4.2 per cent in 2017, the industry projected to maintain a stable
contribution of 4 per cent in 2019 and 2020, respectively. Disturbingly, real GVA by the primary sector was the
lowest compared to tertiary and secondary sectors. In 2018, the primary sector contributed 6.4 per cent to provincial
real GDP, decreasing slightly from the highest 6.7 per cent posted in 2017. The main drivers of Real GVA by the
primary sector were mainly the agricultural industry, which contributed 4.7 per cent in 2018, decreasing marginally
from 4.9 per cent in 2017.
The highest contribution in 2017 was as a result of favourable weather conditions that boosted crop productions.
The contribution by this industry declined in 2018 due to substantial contraction by sub-industries such as the
forestry and logging which fell by 9.1 per cent while fishing, operation of fish farms contracted by 1 per cent (Table
A4.1 in Appendix). Despite the notable decline in 2016 where the industry recorded 3.8 per cent due to the drought,
agriculture has been consistently showing a stable contribution to the economy of the province.
68
4.6 International trade
International trade has strengthened substantially over the past decades as most countries increasingly joined the
World Trade Organization (WTO), which promotes trade liberalisation and free trade. Trade liberalisation involves
the removal of trade barriers or restrictions in order to ensure free flow of goods amongst countries. The importance
of international trade in stimulating economic growth was first suggested by the Mercantilists view and later
augmented by Adam Smith and David Ricardo. These great scholars noted that production costs are relatively
different among countries due to uneven distribution of resources and costs of production factors, differences in
production technology and efficiency, as well as comparative costs among others. Adam Smith noted that despite
these differences in production costs, countries can benefit from trade by specializing on commodities in which
they have absolute advantage and thus exchange with their trading partners. Other trade theories for factor
endowment are Hecksher-Ohlin (HO Model) and later Samuelson (HOS model) are an improvement on the original
work done by the former (Adam Smith and David Ricardo).
The trade patterns are explained primarily by the trade policies, legislative frameworks, and agreements that
regulate the flow of goods and services among the countries engaging in trade. The trade policies may differ for
each trade relationship depending on the types of goods or services that are being traded. Generally, trade policies
should put the interest of the country concerned first while ensuring that trade is balanced, fair and beneficial. If
trade policies seem to be unreasonable and undermine national interest or harm domestic industries of other
trading partners, it can result in trade restrictions and thus trade conflicts.
South Africa has made significant progress towards improving international trade since the adoption of trade
liberalisation in 1995 by joining the World Trade Organisation (WTO). The country has diversified and reinforced
strong relationships with other regions through, for example; engaging in regional trade agreements and trade
blocs like the Southern African Customs Union (SACU) as well as the Southern African Development Community
(SADC). These regional trade blocs have the primary aim of economic co-operation, removal of tariffs and barriers
to trade.
Further, the country has developed strong partnerships by joining Brazil, Russia, India and China (BRICS) while
the EU is still South Africa’s major trading partner through a Preferential Trade Agreement (PTA), whilst BRICS is
still catching up (Onyekwena, 2014). This supports firms and consumers in South Africa to gain from imports
through lower prices and a greater variety of goods and services, while exporters achieve economies of scale and
increased competition due to trade which can spur innovation and productivity growth.
South Africa is one of the beneficiaries of the African Growth and Opportunity Act (AGOA) which was introduced
in the year 2000 by the Clinton administration to boost trade and investment in granting Africa duty-free access to
6,500 exported products. The purpose of this legislation was to assist the economies of the Sub-Saharan Africa
and to improve economic relations between the United States (US) and the region (African Growth and Opportunity
69
Act, 2000). After completing its initial 15-year period of validity, the AGOA legislation was extended on 29 June
2015 by a further 10 years, to 2025. The South African economy benefits mainly from the export of steel and
aluminium to the United States (US). However, the US market for steel and aluminium in the US was threatened
by the US imposing 25 per cent tariffs on steel and 10 per cent on aluminium products, and later in the year 2018
granted exemptions to some major exporting nations of steel, including South Africa. The exemption of tariffs on
these products will contribute towards ensuring that jobs in companies producing these products are retained.
While it is important to acknowledge the remarkable progress the country has made with regard to international
trade, however, the country remains with a huge challenge of reducing the current account deficit. This requires
extreme production of exportable goods and competitiveness of domestic exports so as to ensure that exports
exceed imports and thus reduce the deficit. However, the exchange rate has also played a major role in this
dynamic process. It is seen as an adjustment parameter to manage the transfer from a change in the capital
account to the corresponding change in the current account. The improvement in the current account surplus
depends mainly on the attraction of both local and international investments, which will ensure an increase in output
for both domestic and international markets. It therefore becomes imperative that policy makers continue to
establish and reinforce sound corrective measures aimed at boosting business confidence, and ensuring policy
and political certainties in order to encourage both domestic and foreign direct investments.
This section therefore provides a rigorous analysis of international trade with reference to trade war, exports,
imports, percentage share of the South African exports by provinces, as well as exports as a percentage of
GDP-R. International trade is one of the factors that makes KZN a key contributor to SA’s economy. This is no
surprise given that the province is home to the busiest and largest ports of Durban and Richard’s Bay. This section
thus predominantly concentrates on KZN, which is the second largest contributor to the economy of the country; it
further reports on national issues related to international trade. Global trade has weakened amid slowing
investment growth and elevated trade policy uncertainty. As the short-term growth outlook has softened,
international financing conditions have eased, providing a respite to countries with large external financing needs.
Industrial commodity prices have partially recovered, with weaker demand offset by supply cuts.
4.6.1 The Brexit uncertainty
International trade exist in Europe where countries trade among one another through a single bloc known as the
European Union (EU). The EU was officially established in 1993 by a coalition of 28 European countries including
UK. The primary objective of the EU was to tear down trade, economic, and social barriers in order to ensure that
70
these countries prosper39. However, Britain tabled a referendum vote to leave the EU on the 23rd June 201640. The
“leave vote” succeeded with 51.9 per cent defeating the “remain vote” which received 48.1 per cent, resulting in a
final verdict that the UK will leave the Euro Zone. Therefore, the term “Brexit’’ was given to Britain’s potential exit
from the EU. UK has been part of EU’s economic and political partnership that began after World War II to foster
economic cooperation, with the idea that countries which trade together were more likely to avoid going to war with
each other.
The negotiations for withdrawal agreement started on the 29th March 2017 after the UK formally notified the EU of
its intention to leave. According to the European Council (2017), the withdrawal agreement will cover the UK’s
outstanding financial liabilities to the EU, the future status of EU citizens living in the UK and British people living
in Europe, and the framework for future UK-EU relations, but will not finalize the details of any new relationship. In
line with the Article 50 of the Lisbon Treaty which allows the negotiation process to spread at most two years, the
negotiations were supposed to end in March 2019. However, UK members of parliament (MPs) rejected the
withdrawal agreement reached between the EU and UK on several occasions, which led into an extension of the
Article 50 process to be granted for negotiations to proceed. Thus, the UK formally left the EU on 31st January
2020, but it will continue to follow all the EU’s rules and its trading relationship remain the same until the end of the
11-month transition period in December 2020.
4.6.2 Possible impact for South Africa
While the Brexit involves mostly the UK and other EU member states, its impact is likely to have spill-over effects
to other UK’s trading partners globally including South Africa (SA). SA trades with the UK through the Trade
Development and Cooperation Agreement (TDCA) that was promulgated in 1999. The TDCA established a free
trade area that covers 90 per cent of bilateral trade between SA and EU. This implies that the South African
merchandise trade is granted preferential access to enter the UK market through European agreements and it
might be removed as the UK leaves the EU. Therefore, the UK’s trade relationship with SA will be affected if there
is no new trade agreements after the Brexit.
Trade statistics reveal that South African merchandise trade, both imports and exports, with the EU amounted
collectively to R214.8 billion in the first half of 2019. The UK was the second largest export destination for South
African exports within the EU, with 16.6 percent of the total exports to the EU in 2019. It was also the second
trading partner in terms of imports, which constitute approximately 10.3 per cent of South African imports from the
EU. Large amounts of South African exports to Germany and the UK are vehicles that are manufactured in SA on
39 Objectives of EU include, but not limited to, stimulate economic and social progress, peace, common foreign and security policy, continuous development
of the Earth, harmony and mutual respect among people, free and fair trade and moment of labour, eradication of poverty, protection of human rights and
development of international law.
40 A referendum - a vote in which everyone (or nearly everyone) of voting age can take part - was held on the 23rd June, 2016, to decide whether the UK
should leave or remain in the European Union.
71
behalf of various German manufacturers such as Mercedes-Benz, Volkswagen and BMW. SA manufactures these
vehicles, and then export them back to Germany or to the UK. The imports from these countries include motor
vehicle, parts and related equipment.
The economic interrelations between SA and UK extend beyond merchandise trade as it also includes foreign
direct investment (FDI), which plays a critical role in the domestic economy. According to SARB (2018), SA
attracted FDI amounting to R1.9 trillion in 2017. The largest FDI flows to SA emanated from the UK, which remains
a leading investor among the EU28 with approximately R519.4 billion. The importance of UK’s FDI in South Africa
was echoed by Moody’s (2016), who indicated that SA is the largest recipient of British foreign direct investment
in Africa, with a particular focus on mining and financial services. Nonetheless, UK also plays a vital role in the
South African tourism sector, such that it is currently the largest tourism source within Europe. UK tourists flowing
to SA were estimated to 41 064 in November 2019, which translates to 16.6 per cent of total overseas tourist arrival
and 24.9 per cent of European tourists arrival during the same period (Stats SA, 2020).
Although it may not be feasible to quantify the exact impact of Brexit in the South African economy, there is a high
likelihood that the aforementioned key sectors will be affected depending on the final Brexit deal. For instance, as
UK opted for no deal, the economic growth will be expected to decline thereby impacting negatively on SA’s
merchandise trade, FDI inflows and tourists flowing from UK to SA. There are many South African companies that
have their European headquarters in the UK, and they use these as a base to serve the rest of Europe. Since the
decision of no deal has been taken, these companies may be forced to set up a base somewhere else to continue
to do business in Europe. Therefore, this could create the risk of high additional cost to companies resulting from
a move of this sort, as well as significant impacts from a human resources perspective.
4.6.3 Current account of the balance of payments
All the international trade policies and decisions made by the countries that trade with SA will affect the country’s
export and import performance, which is recorded in the current account. Table 4.5 summarizes the current account
of the balance of payments for 2018 and up to third quarter of 2019. In 2018, the country recorded a surplus of
R24 billion in the trade balance. The trade surplus was attributed to large amount of merchandise exports
(1.2 billion) which combined with net gold exports (72 billion) exceeded merchandise imports in the value of
R1.2 billion. Nevertheless, the trade surplus was offset by the enormous shortfall of –R197 billion on the net
services, income and current transfer payments. This contributed to the large current account deficit of R173 billion
recorded in the year, which translated to a current account as a ratio of GDP to be -3.5 per cent. The trade balance
has been relatively unstable in the three quarters of 2019. It recorded a surplus of R42 billion in the first quarter
which was shortlived as it plunged to a deficit of R32 billion in the second quarter, before picking up again to surplus
of R41 billion in the third quarter.
72
The deficit recorded in the second quarter emanated from a slight decline in net gold exports from R56 billion in
the first quarter to R50 billion in the second quarter of 2019. Both merchandise exports and net gold exports
increased notably between the second and third quarters of 2019, thereby outweighing merchandise imports which
resulted into a trade surplus. The surplus in the trade balance was contrasted by a massive decline of –R231 billion
on the net services, income and current transfer payments which resulted into a current account deficit. However,
the current account deficit narrowed moderately from R209 billion in the second quarter to R190 billion in the third
quarter as the effect of the switch to a trade surplus exceeded the surge in the shortfall on the services, income
and current transfer account. Thus, the deficit on the current account as a ratio of GDP declined from 4.1 per cent
in the second quarter to 3.7 per cent in the third quarter of 2019.
Table 4.5: Balance on current account (R billion, seasonally adjusted and annualised), 2018:Q1 to 2019:Q3
Source: SARB, 2019
The table reveal that the value of merchandise exports have been on the rise in the three quarters of 2019. The
notable increase was realised in the third quarter with a 21 per cent rise. According to the SARB (2019), the
increased value of merchandise exports emanated from a rise in manufactured and agricultural exports which more
than offset the contraction in non-gold-mining exports. On the one hand, the manufacturing exports were driven
largely by machinery and electrical equipment, as well as vehicles and transport equipment along with a continued
increase in international demand for locally produced vehicles. The agricultural exports, on the other hand,
reflected substantial increase in citrus exports which is SA’s largest fruit export, mainly destined for Europe. In
contrast, the contraction in non-gold-mining exports was as a result of declines in base metals and articles of base
metals, mineral products as well as platinum group metals (SARB,2019).
4.6.4 International commodity prices
The export and import of commodities among countries are settled by means of monetary values, it is against this
background that figure 4.5 illustrates the international commodity prices for gold, iron ore, platinum and coal from
2011 to 2019. The price of these selected commodities took a downward slippery between 2011 and 2015, before
gradually and only partially recovering. According to Baffes et al., (2015), the sharp decline in commodity prices
may have caused large post-crisis swings in terms of trade. However, notable increases for coal, gold, iron ore
and platinum were recorded for 2016 and 2017. The improvement in the price of commodities after nearly six years
3rd Qrt 4th Qtr 1st Qtr 2nd Qtr 3rd Qtr
Merchandise Exports 1 235 1 287 1 176 1 193 1 233 1 259
Net Gold exports 73 67 72 56 50 70
Merchandise imports -1 298 -1 283 -1 223 -1 207 -1 315 -1287
Trade balance 10 72 24 42 -32 41
Net service, income and current
transfer payments-191 -182 -197 -185 -177 -231
Balance on current account -180 -110 -173 -144 -209 -190
As a percentage of GDP -3.7 -2.2 -3.5 -2.9 -4.1 -3.7
2018Year
2019
73
comes as a relief to many countries, especially in Africa. Commodity prices are considered useful economic
indicators since they possess some leading indicator properties. For example, they can provide a useful indication
of the likely future price, or cost pressures, in the economy. The commodity price movements provide a good
indication of the nature of shocks facing an economy, since they are determined on the international market
(Rangasamy, 2008). Commodity prices took another downward trend in 2018. According to IMF (2019), prices of
most commodities picked up in the first half of 2019, but remained well below peak values from 2018. The recovery
on commodity prices was supported by supply constraints and production costs since the beginning of 2019, before
the heightened trade tensions weighed on prices of some commodities, particularly metals.
Figure 4.5: Real percentage change in selected commodity prices, 2011 to 2019 (US dollar indices: 2011 = 100)
Source: World Bank, 2019 and Own calculations
The SARB (2019) indicates that international prices for commodities that South Africa exports, diverged in the third
quarter of 2019. In this regard, the prices of coal and copper are decreasing whilst those of nickel, platinum and
iron ore are increasing. The prices of coal and copper decreased due to weaker global demand prospects. On the
contrary, the price of nickel increased markedly after Indonesia, which is the world’s largest nickel ore producer,
announced a ban on nickel exports from the beginning of 2020; two years ahead of schedule. The average US
dollar price of gold on the London market also increased markedly by 12.6 per cent from US$1 310 per fine ounce
in the second quarter of 2019 to US$1 474 per fine ounce in the third quarter. The rise in price of gold was supported
by high global demand for safe-haven assets as the US Federal Reserve reduced interest rates in the third quarter.
This was further boosted by strong demand for gold by emerging market central banks, such as the central banks
of China, Russia and Turkey (SARB, 2019).
According to the United Nations Commodities and Development Report (2017), commodity price shocks and
volatility have direct impact on the livelihoods of poor households in developing countries, regardless of whether
they depend on commodity exports or imports. The report suggests that diversifying the economy away from the
commodity sector may not be the only policy needed to strengthen resilience and promote development. The key
-160.0
-110.0
-60.0
-10.0
40.0
90.0
2011 2012 2013 2014 2015 2016 2017 2018 2019
Gold ($/troy oz Iron Ore ($/dmtu) Platinum ($/troy oz) Coal ($/mt)
74
challenge lies in a lack of structural transformation and economic diversification by commodity export-import
dependent developing countries in their efforts to achieve sustainable and inclusive development.
4.6.5 South Africa and KwaZulu-Natal exports
Table 4.6 depicts the value of exports for SA and provinces for the years 2008 and 2018. The total value of South
African exports was estimated at R728.8 billion in 2008, which increased considerably over the ten year period
whereby the value of exports reported at R1.2 trillion in 2018. The value of exports, on month-to-month, recorded
a decrease of 4.8 per cent form R122.8 billion in October to R116.9 billion in November 2019 (SARS, 2019). The
sharp decline in the value of exports was driven mainly by the substantial fall in sales for vegetable products (-15
per cent), machinery and electronics (-8 per cent), vehicle and transport equipment (-5 per cent), and mineral
products (-4 per cent), among others. In 2017, the most exported goods and services included mineral products
(25.1 per cent), precious metals (16.7 per cent), vehicles and aircraft vessels (11.9 per cent), iron and steel
products (11.9 per cent), and machinery (8.1 per cent).
The merchandise trade statistics prepared by South African Revenue Services (SARS) indicate that the main
export partners to which goods were exported during the month of November include China (10.1 per cent),
Germany (8.6 per cent), United States (7.3 per cent), United Kingdom (5.5 per cent), and India (5.1 per cent).
Disturbingly, the largest trading partners for South Africa consist mainly of countries from other regions outside the
continent of Africa. However, the establishment of the African Continental Free Trade Area (ACFTA) will play a
crucial role toward fostering regional trade by increasing economic activity amongst African countries as well as
the rest of the world; and creating a competitive continental market that is integrated into global value chains. This
agreement serves as a catalyst for Africa’s accelerated development and has the potential to generate substantial
gains for all African countries.
Table 4.6: South African exports by provinces, 2008 and 2018
Source: IHS Markit, 2020
With regards to the value of exports and its contribution to the national exports, the province of KZN remains the
second largest exporter after GP. Gauteng province was the first largest exporter with the value of exports
estimated at R757.4 million in 2018, which comprises the largest share of national value of exports at 60.7 per
Exports (R1000)% Share of South
African exportsExports as % of GDP Exports (R1000)
% Share of South
African exportsExports as % of GDP
South Africa 728 801 998 100.0 30.8 1 247 225 999 100.0 25.6
Eastern Cape 48 699 173 6.7 28.0 54 459 939 4.4 14.5
Free State 4 929 149 0.7 3.8 7 636 461 0.6 3.1
Gauteng 469 934 374 64.5 57.6 757 388 660 60.7 44.6
KwaZulu Natal 84 695 748 11.6 21.6 157 455 230 12.6 20.2
Limpopo 16 912 415 2.3 10.4 16 917 701 1.4 4.7
Mpumalanga 12 199 806 1.7 7.2 21 941 603 1.8 6.0
North West 22 869 868 3.1 16.4 87 832 784 7.0 30.1
Northern Cape 993 875 0.1 1.8 10 237 450 0.8 10.4
Western Cape 67 567 591 9.3 20.4 133 356 173 10.7 20.1
2008 2018
75
cent. The value of exports in KZN was estimated at R154.5 million in 2018, which translate to 12.6 per cent of the
national value of exports. The value of exports in the province increased from R84.6 million in 2008. However, it
should be noted that Western Cape was the third largest exporter with the value of exports estimated at R133.4
million and thus contributed about10.8 per cent to the national value of exports in 2018. In terms of contribution to
national GDP, the ratio of exports to GDP decreased from 30.8 per cent in 2008 to 25.6 per cent in 2018. Despite
larger export value, the export contribution to KZN’s GDP was moderate (20.2 per cent) and ranks the third after
North West at 30.1 per cent and GP at 44.6 per cent. Nonetheless, WC continue to trend behind KZN with exports
contribution to GDP reported at 20.1 per cent. As indicated above, KZN has the largest and busiest harbour ports
that can be advantageous for the province to increase its export even further41.
4.6.6 South Africa and KwaZulu-Natal imports
Table 4.7 illustrates the value of imports for South Africa and contribution by provinces to the national value of
imports in 2008 and 2018. The value for imports has increased considerably over the ten year period under review.
In 2018, South Africa imported goods and services worth about R1.2 trillion, up from R743.3 billion in 2008. The
value for imports to South Africa, on month-to-month, showed a sharp decline of 7.7 per cent from R120.1 billion
to R110.8 billion in November 2019 (SARS, 2019). The reported fall in imports value was driven largely by
substantial decrease in the importation of original equipment components (-44 per cent), chemical products (-12
per cent), and prepared foodstuff (-12 per cent), among others.
Table 4.7: South African imports by provinces, 2008 and 2018
Source: IHS Markit, 2020
The country imports various goods and services from different regions across the globe. The main imports for the
country include, but are not limited to, machinery which comprises 23.5 per cent of the total imports, followed by
mineral products at 15.1 per cent, vehicles and aircraft vessels (10 per cent), chemicals (10.9 per cent), and
41 It must be noted that some of the commodities are produced from other provinces yet exported in KZN via the ports of Durban and Richards Bay
Imports (R1000)% Share of South
African importsImports (R1000)
% Share of South
African imports
South Africa 743 324 997 100.0 1 222 943 998 100.0
Eastern Cape 174 983 974 23.5 228 306 658 18.7
Free State 44 095 664 5.9 54 734 847 4.5
Gauteng 728 837 0.1 1 406 402 0.1
KwaZulu Natal 3 661 189 0.5 5 289 424 0.4
Limpopo 84 636 841 11.4 154 734 007 12.7
Mpumalanga 4 019 456 0.5 6 897 343 0.6
North West 422 819 738 56.9 762 547 520 62.4
Northern Cape 2 825 606 0.4 6 965 356 0.6
Western Cape 5 553 693 0.7 2 062 442 0.2
2008 2018
76
equipment components (8.1 per cent). Most goods and services imported in the month of November were mainly
from China (19.2 per cent), Germany (7.8 per cent), United States (6.5 per cent), India (5.5 per cent) and Nigeria
(5 per cent). It should be noted, however, with discomfort that the top countries dominating South African imports
are from other regions outside of Africa and only Nigeria that is from the continent. Ideally, countries within Africa
should trade mostly among themselves as a way to promote intra-Africa trade. This is because great regional
integration of all African role players can contribute significantly toward sustainable local economic development
by capitalising on the continent’s growth potential.
With regards to provincial value of imports and contribution to national imports, KZN ranks the largest importer with
the value of imports amounting to R154.7 million in 2018, up from R84.6 million in 2008. In this regard, the province
contributed 11.4 per cent and 12.7 per cent to national value of imports in 2008 and 2018, respectively. GP was
the first largest importer for both years with R422.8 million in 2008 (56.9 per cent of national imports) and R762.4
million in 2018 (62.4 per cent of national imports). The second largest importer after GP was WC with the value of
imports estimated at R175 million in 2008 and R228.3 million in 2018, which translate to 23.5 per cent and 18.7
per cent of the national value of imports respectively. The least contributor to the national imports was LP with a
mere 0.1 per cent.
4.7 Gross Fixed Capital Formation
Gross Fixed Capital Formation (GFCF), alludes to the net increase in both the physical quantum and pecuniary
value of capital assets – including but not limited to, buildings, the construction of roads, railways, schools, offices,
hospitals, and plant and equipment. The measurement also relates to both private and government sector
investment. Table 4.8 illustrates the GFCF quarter-to-quarter percentage change at seasonally adjusted
annualised rates, in 2018 and the first three quarters of 2019 at a national level.
Table 4.8: Quarter to quarter percentage change in Gross Fixed Capital Investment at seasonally adjusted annualised
rates, 2018:Q1 to 2019:Q3
Source: SARB, 2020
At the end of 2018, total real gross fixed capital formation (inclusive of private business enterprises, public
corporations, and general government) contracted by 1.4 per cent, with capital outlays by both public corporations
and general government showing decreases, while private business enterprises showed a slight increase of
Q1 Q2 Q3 Q4 Q1 Q2 Q3
Private business enterprises -6.7 -1.3 2.9 -1.4 2.1 -7.2 15.8 10.8
Public corporations -15.5 -13.8 -7.9 -5.6 -12.5 9.6 -11.9 0.2
General government -14.1 -4.3 -9.0 -4.1 -4.4 -2.1 -16.3 -17.8
Total -9.3 -3.8 -0.7 -2.5 -1.4 -4.1 5.8 4.5
Sector2018
Year*2019
77
2.1 per cent. Whilst reasons are varied, the constrained spending on GFCF can broadly be ascribed to reduced
investor confidence, regulatory uncertainty in the mining sector, load shedding, concerns about fiscal stability and
subdued economic activity (SARB, 2019).
Private sector spending constitutes approximately 70 per cent of gross fixed capital formation. At a national level,
quarter two of 2019 saw private sector spending rebound from (-7.2) per cent in quarter one to 15.8 per cent in
quarter two. This was followed by a further strong increase of 10.8 per cent in the third quarter. The spending on
fixed capital investment by the private sector relates mainly to expenditure on machinery and equipment, as well
as transport equipment (SARB, 2019).
In comparison to the markedly robust increase in GFCF by the private sector in the second and third quarters of
2019, the fourth quarter of 2018 reflected a decrease in fixed investment spending of (-1.4) per cent. The decline
can be ascribed to reduce spending on machinery and equipment, as well as the “winding down of construction
activity at major independent power generation facilities” (SARB, 2019).
In respect of public corporations, real capital expenditure by public corporations contracted by 5.6 per cent in the
fourth quarter of 2018, following a decline of (-7.9) per cent in the third quarter of the same year. Overall, following
four quarterly contractions in 2018, real fixed capital outlays by public corporations showed an overall decrease of
12.5 per cent. This was mainly attributed to negative revenue generation by state-owned entities (SOEs), including,
but not limited to Eskom, South African Airways (SAA), Denel, and the South African Broadcasting Corporation
(SABC). The contraction in fixed investment continued in the second quarter of 2019 due to the winding down of
construction activity at the Medupi and Kusile power plants, and the worsening financial position of all of the above-
mentioned institutions, in particular SAA and Eskom (SARB, 2019). Growth in real GFCF by public corporations
increased slightly in the third quarter of 2019 by 0.2 per cent, this being the result of a rise in spending on transport
equipment and machinery and other equipment (SARB, 2019).
Capital outlays by the government sector at the end of 2018 showed (-4.4) per cent, this being due to a constrained
fiscal environment, coupled with frequent under-spending (against budget) on the part of provincial and local
government on some large infrastructure projects which were placed on hold (SARB, 2019). This trend continued
into 2019, with real capital expenditure receding to (-17.8) per cent in the third quarter, after two consecutive
contractions in the first and second quarters of the year. This marked the seventh quarterly contraction, “with lower
real capital spending by provincial and central government outweighing increases by local government” (SARB,
2019).
78
Figure 4.6 Growth in Total Fixed Capital Investment (GFCF) by Government as a percentage of GDP-R in KZN, 2014
to 2021
Sources: KZN Provincial Treasury, 2019 and National Treasury, 2019a
Figure 4.6 illustrates growth in total fixed capital investment spending by government as a percentage of GDP-R
in KZN over the period 2014 through 2018, and projections for 2019 to 2021. The years 2014 to 2015 and 2016
reported an increase in growth on total government spending on GFCF as a percentage of GDP-R from 4.8 per
cent to 4.9 per cent, respectively. In 2017, although there was a rise in government spending on fixed capital
investment, this was increasing at a decreasing rate.
The year 2018 saw an increase in both provincial and local government expenditure, resulting in total GFCF as a
percentage of GDP-R rising to 4.6 per cent. The rise however is short-lived, and projections for the period 2018 to
2019 illustrate a 0.3 percentage points decline, showing that government’s total fixed capital spend is increasing
at a decreasing rate.
4.8 Travel and tourism
The decades subsequent to 1970 have seen Travel and tourism internationally evolving into a leading economic
sector by way of contribution to GDP, employment and investment. Statistics published by the World Travel and
Tourism Council (WTTC, 2019) indicate that in 2018, the sector contributed a total of US$8.8 trillion equating to
10.4 per cent of global GDP; this being the combined spend on direct, indirect and induced tourism activities. Whilst
the three components are not mutually exclusive they can be broadly delineated as follows:
The direct contribution to GDP includes accommodation, transportation and travel, entertainment, visitor
attractions, food and beverage, cultural activities and sport and recreation, and government individual spending for
posterity on cultural and recreational sites, such as museums and national parks. The indirect contribution extends
to the spill-over effect of the purchase of goods and services external to the sector, such as, printing and publishing,
marketing and promotion, construction, fuel sales, maintenance, cleaning, security services, investment spending,
4.8%4.9% 4.9%
4.4%
4.6%
4.3% 4.4%
4.7%
79
such as the purchase of an aircraft or the construction of a new hotel, and government collective spending (tourism
marketing and promotion, aviation and resort area security services) among others. The induced contribution
measures the GDP and jobs supported by the spending of those who are directly or indirectly employed by the
Travel and tourism industry (WTTC, 2019). The contribution of tourism to GDP and employment is discussed at
global, national and provincial (with particular emphasis on KwaZulu-Natal) levels below.
4.8.1 World travel and tourism
In accordance with the WTTC (2019), and as mentioned previously, Travel and tourism contributed a considerable
amount of US$8.8 trillion towards global GDP in 2018. The growth in this industry was expected to remain robust
in 2019, with the industry’s total contribution to global GDP projected to rise to US$9.127 trillion (10.4 per cent of
global GDP). The sectors’ total contribution to global GDP is projected to rise to $13.086 trillion in 2029. In respect
of the industry’s direct contribution to global GDP in 2018, Travel and tourism contributed 3.2 per cent or
US$2.571 trillion. This was estimated to rise by 3.6 per cent in 2019 to US$2.849 trillion. It is projected that by
2029 Travel and tourisms direct contribution to global GDP will approximate US$4.065 trillion or 3.5 per cent of
global GDP. In this regard, it is interesting to note that for the seventh year in a row, the industry rose faster than
that of the merchandise sectors, and came third in revenue generation after chemicals and fuel (UNWTO, 2019).
Visitor exports (money spent by foreign visitors to a country) is a key component of the direct contribution of Travel
and tourism. In 2018, visitor exports accounted for US$1.643 trillion, an increase of US$121 billion up from 2017.
This was estimated to increase at 4 per cent in 2019, and projected to rise further to US$2.484 billion in 2029
(WTTC, 2019).
Generally, there is a positive correlation between growth in tourism and growth in employment. In this regard, at a
global level 2018 saw the industry employing 319 million individuals in total (direct, indirect and induced)
employment; an increase of 6 million from 2017. The industry’s total employment impact in 2018 accounted for
10 per cent of total global employment. It was expected that the number of jobs created in 2018 would reach
328 million in 2019. Travel and tourism is forecast to support 421 million jobs by 2029, approximately 11.7 per cent
of total global employment (WTTC, 2019). The estimated number of persons directly employed in Travel and
tourism in 2018 was 123 million, this is projected to increase to 154 million in 2029 (WTTC, 2019).
Capital investment within the industry amounted to US$940.9 billion in 2018 rising to an estimated US$982.4 billion
in 2019. This is projected to show growth of 4.2 per cent over the period 2019 to 2029 reaching US$1.490 trillion
(WTTC, 2019). The growth suggests that there is a positive view on the benefits of Travel and tourism and the
relative stability it has to offer.
Despite the sector being negatively susceptible to health and safety concerns, recent-past and current growth
internationally, is indicative of tourism’s resilience. Globally, the top ten global destinations, in terms of the number
80
of visitors to these countries in 2018 were France (89 million), Spain (83 million), USA (80 million), China
(63 million), Italy (62 million), Turkey (46 million), Mexico (41 million), Germany (39 million), Thailand (38 million),
and the United Kingdom (UK) at 36 million (UNWTO, 2019). Being a conduit of job creation and a significant
contributor to GDP; meaningful benefits accrue to those economies which capitalise on their tourism market.
4.8.2 Travel and tourism in South Africa
According to the WTTC (2019), Travel and tourism’s total contribution to SA’s GDP was R425.5 billion in 2018. In
respect of job creation, the sector employed 1.5 million persons (9.2 per cent of total employment) in 2018. This is
projected to increase to 2 million people by 2029. The visitor spend to the country in 2018 amounted to
approximately R128.3 billion illustrating the strong link between the tourism and other sectors, as well as the
benefits accruing thereto.
Despite the positive contribution of Travel and tourism to GDP and job creation, it must be noted that the total
contribution of 8.6 per cent to total GDP in 2018 was down by 1.9 percentage points from 2017 (WTTC, 2019).
This can partly be attributed to the continued restrictive visa regulations, safety concerns by international tourists,
and xenophobic attacks.
In his State of the Nation Address (SONA) in July 2019, President Cyril Ramaphosa stated that “we will make good
on our ambition to more than double international tourist arrivals to 21 million by 2030”. He continued by saying
that this target would be achieved by renewing the country’s tourism brand, by “introducing a world-class visa
regime” (SONA, July 2019), with a specific focus on India and China, and through air arrivals from across Africa.
In order to achieve this goal a number of steps have been undertaken, including but not limited to the proposed ‘e-
visa’ which is still in its trial stage. In His 2020 SONA address the President reiterated the importance of the Tourism
sector by stating that the safety of tourists would be increased. Further, the establishment of the Tourism Equity
Fund will be launched to promote transformation in the sector.
In October 2014 new visa laws were introduced, requiring children under the age of 18 travelling in and outside of
the country, to carry unabridged birth certificates detailing information of both parents. Also, the new visa
regulations required that visitors to SA must apply for a visa in person at South African embassies within their
respective countries. These laws were put in place to combat child trafficking and terrorism, however, they had a
severe impact on SA. In order to address the situation, in 2018 it was announced that minors who are foreign
nationals will no longer require a copy of their unabridged birth certificate and consent from both parents to enter
the country, but “need to provide proof of guardianship or custody or consent from the guardian in the case of an
unaccompanied minor” (Department of Home Affairs [DHA], 2020).
Further, in 2019 visitors travelling from India and China would no longer have to apply for visas in person at a
South African embassy. In addition, and in accordance with an announcement by Minister of Home Affairs, Aaron
81
Motsoaledi, “as from the 15th of August 2019, persons travelling from Qatar, Saudi Arabia, the United Arab Emirates
and New Zealand would no longer require a visa to visit SA for holidays, conferencing and business meeting visits”.
The Minister continued by stating that “The Department of Home Affairs has an important contribution to make in
growing tourism and by extension growing the economy and creating jobs”. In this regard, the DHA is recurrently
in the process of reviewing its operations to ensure the relaxation of entry requirements to the country.
Figure 4.7 shows the number of foreign tourists visiting South Africa and the ten leading countries from which they
come from in November 2018 and November 2019. The figure further illustrates that the greatest number of tourists
visiting SA came from Germany in both 2018 (42 851) and 2019 (41 119). This was followed in November 2019
by the United Kingdom (UK) at 41 064 visitors, and the United States of America (US) at 27 288. Upon comparing
figures in November 2018 to November 2019, the number of tourists increased for only three out of the ten leading
overseas countries, these being the UK, Australia and Brazil. The remaining seven countries saw moderate to
significant decreases in visitor arrivals, namely Germany (42 851 to 41 119), the US (27 374 to 27 288), France
(20 063 to 16 673), the Netherlands (15 247 to 14 417), China (9 274 to 8 416), Switzerland (7 698 to 7 397), and
India (9 315 to 7 247). Some of the reasons for the declines include, the restrictive visa regulations, safety
concerns, and neighbouring countries such as Zimbabwe declaring ‘open skies’ which allows for easier access to
favoured tourist destinations such as game parks without the hassle of visa regulations.
Figure 4.7 Number of tourists from ten leading overseas countries, November 2018 and November 2019
Source: Stats SA, 2020
Figure 4.7 shows the number of tourists visiting SA from the ten leading Southern African Development Community
(SADC42) countries in November 2018 and November 2019. Virtually, all of the tourists (97.6 per cent) visiting the
country from other areas in Africa, came from the SADC region (Stats SA, 2020). The figure shows that Zimbabwe
42 SADC countries include: Angola, Botswana, Democratic Republic of Congo (DRC), Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia,
Seychelles, Swaziland, Tanzania, Zambia, and Zimbabwe.
Germany UK USA France The Netherlands Australia China Switzerland India Brazil
42 851 39 672
27 37420 063
15 2478 143 9 274 7 698 9 315 5 979
41 11941 064
27 288
16 673
14 417
8 723 8 4167 397
7 2476 495
Nov-18 Nov-19
82
had the highest number of tourists visiting South Africa in both November 2018 and 2019, at 175 726 and 172 672,
respectively. After Zimbabwe, the highest number of tourists visiting SA in November 2019 came from Lesotho at
114 844 and Mozambique at 110 399. When comparing figures from November 2018 to November 2019, the
number of tourist visits to SA increased in only two of the ten countries, these being, Mozambique and Swaziland.
The remaining eight, namely Zimbabwe, Lesotho, Botswana, Malawi, Namibia, Zambia, Angola and Tanzania, all
showed moderate to substantial decreases. Swaziland had the largest growth in the number of tourists visiting SA
at 2 per cent, while Zambia showed the largest decrease in growth of (-10.65) per cent.
When evaluating the benefits accruing to SA from tourism, cognisance must be taken of both the intention and the
available spend underlying that of the visitor. As opposed to guests from the developed countries, where the
primary rationale is leisure and the available spend relatively high; that from SADC countries is driven largely by
pecuniary and other considerations. The spectrum extends from formal commercial business, including conference
attendance through to job seeking, and extending in many instances to the procurement of goods and provisions
for personal consumption and / or for sale on return.
Figure 4.8: Number of tourists from the ten leading SADC countries, November 2018 and November 2019
Source: Stats SA, 2020
The sole benefit of tourism to the host country, be it for business, pleasure or an alternative reason, accrues from
the physical spend. Here there is a marked dichotomy within the SADC region driven substantially by the relative
purchasing power of a local currency versus that of SA. This translates into guests from Botswana, with its strong
currency, tending to have greater purchasing power than a Zimbabwean where the spend is restricted by
debilitating onerous rates of exchange. This notwithstanding, a further important variable relates to the relative
number of visitors from given origins. Simplistically, two hundred Zimbabweans spending R100 each would see
greater value to SA that fifty guests from Botswana spending R200 each. It is therefore apparent that when
comparing the relative contribution to the South African economy by individual SADC countries, the variables of
intention, available spend and the physical number of visitors must be considered.
Zimbabwe Lesotho Mozambique Swaziland Botswana Malawi Namibia Zambia Angola Tanzania
175 726
121 722 109 669
74 54057 004
17 911
15 726 13 638 5 151
3 537
172 672
114 844
110 399
76 104
56 288
16 46214 622 12 186 4 622
3 322
Nov-18 Nov-19
83
4.8.3 Travel and tourism in KZN
KwaZulu-Natal (KZN), was SA’s fourth top domestic tourism source market with approximately 1.5 million tourists
after Gauteng at 7.2 million, and Limpopo and Mpumalanga both at 2.3 million in 2018 (Zulu Kingdom, 2019).
Gauteng heads the list by virtue of it being the country’s economic hub, and therefore South Africa’s primary conduit
of business tourism.
KZN hosts some of the most popular tourists’ attractions in SA, including the spectacular Drakensberg Mountains
which provide not only fantastic scenery, but also adventure sports, hiking, water rafting, etc., and number of hotels
and bed and breakfasts (B&Bs). The golden beaches of the Indian Ocean with its warm current, run from the north
to the south coast and have a number of areas with shark nets, making water sports safe. Most notably, the KZN
coastline has nine Blue Flag beaches43, these being Westbrook Beach on the North Coast, uShaka Beach in
Durban, and Lucien, Marina, Ramsgate, Southport, Umzumbe, Trafalgar and Hibberdene Beaches all on the South
Coast. Ushaka Marine World is a venue where tourists can enjoy Zulu culture, a water world, an aquarium,
restaurants and shopping. The northern part of the province is home to both private and public game reserves
such as the luxurious Phinda Private Game Reserve and the KZN Wildlife Hluhluwe Game Reserve, where tourists
can spot the Big Five (leopard, lion, elephant, buffalo and rhino). The area is also home to the iSimangaliso
Wetlands which has been declared a World Heritage Site by the United Nations Educational, Scientific and Cultural
Organisation (UNESCO).
The Oribi Gorge, in the south of the province is a must see, with spectacular views, scenery, and a number of
sporting activities, such as rock climbing, abseiling and “the wild swing”. The province is home to historic battle
fields relating to the Anglo-Boer War, the Battle of Isandlwana (between AmaZulu and the British), and the Battle
of Blood River. Tourists can visit the “Battlefields” in Dundee with guided tours. Also, the King Shaka International
Airport, with its in-bound and out-bound domestic and international flights has contributed significantly to both
business and holiday tourism.
In respect of business tourism, Durban’s International Convention Centre (ICC), and the adjacent Durban
Exhibition Centre which together form the Inkosi Albert Luthuli International Convention Complex are important
contributors to business tourism, and the GDP of the province (KZN Top Business, 2020).
4.8.3.1 Total tourism spend as a percentage of GDP in KZN
In 2018, the number of people directly employed in the Travel and tourism sector in KZN equated to approximately
62 649, whilst the industry’s total contribution to employment within the province was estimated at 124 027. During
43 “The Blue Flag programme, is an eco-award given to beaches that meet specific, strict standards of excellence in safety, cleanliness, provision of amenities,
environmental information and management. It is managed internationally by the Foundation for Environmental Education (FEE) and locally, by the Wildlife
and Environmental Society of South Africa (WESSA). Acquiring Blue Flag status helps to encourage improved ecosystems and environmental management
by municipalities and the safer, cleaner and better managed facilities enhance tourism” (Coast KZN: http://www.coastkzn.co.za/blue-flag-beaches).
84
the same year, tourism’s direct contribution to provincial GDP was R10.74 billion while the total contribution
(inclusive of direct, indirect and induced spending) to GDP was approximated at R21 billion (Zulu Kingdom, 2019).
Figure 4.9 shows the total tourism expenditure as a percentage of GDP in KZN over the period 2009 through 2018.
The spending on tourism in the province showed a decreasing trend over the ten year period under review from
7.1 per cent in 2009 (with a slight increase in 2010 to 7.2 per cent owing to the 2010 Soccer World Cup) to 6 per
cent in 2013, dropping to 4.2 per cent in 2018. The reason for the declining trend, can be ascribed to the fact that
GDP is increasing at a faster pace than the corresponding increase in tourism.
Figure 4.9: Total tourism spend as a percentage of GDP in KZN, 2009 to 2018
Source: IHS Markit, 2020
4.8.3.2 Tourists visiting KZN by country of origin
Figure 4.10 shows the number of tourists from the top ten countries across the globe who visited KZN in 2018. Six
of the ten are from outside Africa; these being the United Kingdom, Germany, the US, India, France and the
Netherlands. The remaining four countries come from within Africa and are, Swaziland, Botswana, Lesotho, and
Zimbabwe.
The highest proportion of visiting tourists from outside SA came from Swaziland at 36.3 per cent (296 711 people),
this was followed by the UK at 6.2 per cent (50 678 persons), Germany and Botswana (both at 5.9 per cent or
48 225 people), Lesotho (5.5 per cent or 44 956 visitors), the USA (5.4 per cent or 44 138 persons), India (5 per
cent or 40 626 people), Zimbabwe (4.5 per cent or 36 782 visitors), France (3.9 per cent or 31 878 persons), and
the Netherlands at 3 per cent or 24 521 visitors.
7.1 7.2
6.5 6.46.0
5.65.2
4.8 4.64.2
85
Figure 4.10: KZN’s top foreign tourism markets by country of origin in percentages, 2018
Source: Zulu Kingdom, 2020
4.9 Conclusion and policy recommendations
The primary objective of this chapter was to provide a comprehensive analysis of global, national and provincial
economic review and outlook. The intention was to highlight the economic performance focussing on economic
growth, outlining both global and national risks associated with the economic outlook. Sector analysis provided an
in-depth understanding of the industries that are primary drivers of the economy of KZN. Given the significant role
by KZN SA's to international trade, the chapter provided an analysis of the provincial performance on exports,
imports and the balance of payments thereof.
As indicated by the World Bank (2020), developing nations, including SA, need to take urgent action to mitigate
the global economic outlook risks. Issues such as increasing debt, economic structural reforms, and climate
change weigh down investment. The number of extreme weather events is on the rise and thus demanding a clear
direction.
Global technology is advancing at a rapid speed; therefore, KZN needs to act swiftly in replicating national policies
aimed at benefiting from the fourth industrial revolution. Digitalisation is transforming finance, business models and
value chains, through three main channels: investment, skills and trade. Similar to the most successful economies,
KZN needs to embrace technology and harness the strong productivity potential of digital technologies.
The chapter further highlighted the rise in trade restrictions as one of the risks affecting economic outlook. Also,
the NDP, PGDP and the MTSF have identified the importance of policy certainty and prudent fiscal policy as critical
for economic growth. These policy documents call for vigorous action to address the economic challenges
hindering inclusive growth that will ultimately deal with the brunt poverty, unemployment and the high levels of
inequality in KZN and across the country.
36.3
6.2 5.9 5.9 5.5 5.4 5 4.5 3.9 3
86
Given the lacklustre economic performance in KZN and across the country, the SARB’s expansionary policy taken
in January 2020 could bring relief to the highly indebted households and government. However, this policy stance
needs to be complemented by stronger fiscal and structural policy support to reduce government debt and debt
service costs thereof.
87
Chapter 5: Labour Markets
5.1 Introduction
The South African economic landscape is highly industrialised which by no doubt makes it one of the economic
hubs for the African continent. However, it continues to grapple with high unemployment rates, low absorption
rates (LAR) and low labour force participation rates (LFPR). These undesirable labour market indicators emanate
from numerous factors including lacklustre economic activity, unskilled labour force, wage rigidities, and structural
changes in the entire economy, among others. In particular, the domestic economy has remained somewhat
subdued in the post-financial crisis period, which contributes to its inability to generate employment opportunities
for the growing labour force. Disturbingly, unemployment is unacceptably high among young people of the working
age population, whereby people with less than matric comprises the largest part of the total unemployed.
These challenges are pertinent to all provinces within the country including KwaZulu-Natal (KZN). The province of
KZN has a huge number of non-economically active population which shows that the largest proportion of working
age population is neither employed nor unemployed. It is within this backdrop that the province has high expanded
unemployment rate which is almost double to the official unemployment rate. Further, unemployment in the
province is high among district municipalities that are in rural areas due to limited economic activities, lack of
economic infrastructure and highly unskilled labour force, among others.
This chapter discusses in depth the labour market dynamics for KZN in relation to South Africa (SA) and other
provinces and make recommendations thereof. The analysis begins by discussing South African labour force
characteristics focusing largely on employment growth, distribution of employment by industries, and
unemployment. Similar topics are covered also under the KZN’s labour market dynamics. At the District level, the
labour market dynamics discussed in the Chapter include employment, employment distribution by industries,
unemployment, LAR, LFPR, and job scarcity. The chapter conclude by providing a review of labour productivity
and remuneration for KZN, before summarizing the chapter with recommendations based on information discussed
in the earlier sections.
5.2 Overview of the South African Labour Market
Table 5.1 provides an overview of the South African labour force characteristics from the fourth quarter of 2018 to
the fourth quarter of 2019. The number of people employed continues to grow at a slower pace as it increased by
0.3 percentage points from 16.3 million in the third quarter to 16.4 million in the fourth quarter of 2019. When
compared to the same period in 2018, employment moderated by 0.7 percentage points from 16.5 million to
16.4 million persons employed. The persistently low employment rate can mostly be attributed to the structural
factors, which include slow economic activity, skills miss-match, rigid employment policies and low educational
88
attainment, among others. As indicated in Chapter Four, the South African economy has been growing at a much
slower pace, thereby constraining the capacity to create more jobs and absorb new entrants.
The subdued employment growth is also evident from low absorption and labour force participation rate. The labour
absorption rate44 (LAR), which measures the extent to which the people of the working age population are absorbed
in the economy, was reported at 42.4 per cent in the third and fourth quarter of 2019. However, it decreased slightly
by 0.9 percentage points, year on year, from 43.3 per cent in the fourth quarter of 2018 to 42.4 per cent in the
fourth quarter of 2019. A low LAR underpins the argument highlighted above that the economy lacks the capacity
to generate enough employment opportunities for the labour force. The labour force participation rate45 (LFPR),
which measures the labour force participation in economic activities, decreased by 0.1 percentage points from
59.9 per cent in the third quarter of 2019 to 59.8 per cent in the fourth quarter of 2019 (Table 5.1).
Table 5.1 Labour force characteristics in South Africa, 2018:Q4 to 2019:Q4
Source: Stats SA, 2020
5.2.1. Employment distribution by industries
Table 5.2 illustrates national employment by industries from fourth quarter of 2018 to the fourth quarter of 2019.
Employment gains were recorded among six of the ten industries namely; agriculture, mining, construction,
transport, finance, and community and social services. Community and social services recorded massive
employment gains with 113 000 persons employed, followed by finance and transport industries with 76 000 and
36 000 employment gains respectively. Other industries recorded employment losses with trade industry
experiencing the largest employment loss of 159 000, followed by manufacturing and utilities industry with 39 000
and 14 000 respectively.
On the year-to-year basis, employment gains were recorded in the community and social services (103 000),
transport (46 000) and agriculture (36 000). Despite these employment gains, overall employment plummeted by
44 The labour absorption rate (LAR) is defined as the percentage of the working-age population that is currently employed. It provides an alternative indication
to the unemployment rate regarding the lack of job opportunities in the labour market.
45 The labour force participation rate (LFPR) shows the extent to which the working age population is economically active. It comprises of people who are
actively participating in the economy be they either employed or unemployed, and excludes those non-economically active.
South Africa
Population 15-64 yrs 38 134 38 283 38 433 38 582 38 727 145 594 0.4 1.6
Labour force 22 668 22 492 22 968 23 109 23 146 38 478 0.2 2.1
Employed 16 529 16 291 16 313 16 375 16 420 45 -108 0.3 -0.7
Unemployed 6 139 6 201 6 655 6 734 6 726 -8 587 -0.1 9.6
Not economically active 15 466 15 791 15 465 15 474 15 581 107 115 0.7 0.7
Rates (%)
Unemployment rate 27.1 27.6 29.0 29.1 29.1 0.0 2.0
Employed/ population rate (Absorption) 43.3 42.6 42.4 42.4 42.4 0.0 -0.9
Labour force participation rate 59.4 58.8 59.8 59.9 59.8 -0.1 0.4
Year-on-Year
change
Thousand
Jan-Mar 2019Oct-Dec 2018Qtr-to-qtr
changeJul-Sep 2019Apr-Jun 2019 Oct-Dec 2019
Qtr-to-qtr
change
year-on-year
change
Percentage
89
108 000 in the fourth quarter of 2019 when compared to the same period in 2018. The marked decline emanated
from the fact that employment gains were offset by massive employment loss in other industries. Employment
losses were experienced in the construction (131 000), trade (70 000), manufacturing (46 000), private households
(46 000) and finance (43 000) (Table 5.2).
Table 5.2: South African employment by industry, 2018:Q4 to 2019:Q4
Source: Stats SA, 2020
In terms of employment by occupation, employment increased in seven of the ten occupations between the third
and fourth quarters of 2019. The quarterly labour force survey (QLFS) shows that the largest employment gains
were recorded in clerks with 37 000. This was followed by employment in plant and machine operators, skilled
agriculture occupations with 31 000 and 13 000, respectively. In contrast, other occupations reported employment
losses where sales and services occupations (38 000) recorded the largest employment loss, followed by domestic
worker (13 000), and Craft and related trade (5 000) occupations (Stats SA, 2020).
5.2.2 South African unemployment trends
As economic climate remain unstable in SA, the labour market also continues to be a challenging environment for
the work seekers as it becomes more difficult to find a job in the country. The unemployment rate has consistently
been increasing and is currently rated among the highest across the globe. It should further be noted that SA has
the highest unemployment rate when compared to other emerging market and developing economies (EMDEs)
such as Brazil, Russia, and China. Thus, it is a national crisis that perpetuates the other two major socio-economic
challenges, namely, poverty and inequality.
The official unemployment rate remained unchanged at 29.1 per cent between the third and fourth quarters of
2019, which translates to average unemployment rate of 28.7 per cent for the entire year. This implies that
6.7 million people are unemployed in the country, which is 9.6 per cent higher than the same period in 2018, where
6.1 million people were unemployed. On average, SA’s unemployment rate has increased by
4.6 percentage points over the last ten years. According to Stats SA (2020), the expanded unemployment rate
Oct-Dec
2018
Jan-Mar
2019
Apr-Jun
2019
Jul-Sep
2019
Oct-Dec
2019
Qtr-to-qtr
change
Year-on-year
change
Qtr-to-qtr
change
Year-on-year
change
Total 16 529 16 291 16 313 16 375 16 420 45 -108 0.3 -0.7
Agriculture 849 837 842 880 885 6 36 0.6 4.2
Mining 438 417 381 419 430 11 -8 2.5 -1.8
Manufacturing 1 766 1 780 1 789 1 760 1 720 -39 -46 -2.2 -2.6
Utilities 134 150 151 133 120 -14 -14 -10.2 -10.5
Construction 1 481 1 339 1 363 1 339 1 350 12 -131 0.9 -8.8
Trade 3 320 3 345 3 429 3 408 3 249 -159 -70 -4.7 -2.1
Transport 965 1 025 983 975 1 011 36 46 3.7 4.7
Finance and other business services 2 611 2 516 2 495 2 492 2 568 76 -43 3.0 -1.7
Community and social services 3 624 3 574 3 622 3 679 3 792 113 168 3.1 4.6
Private households 1 332 1 301 1 251 1 286 1 286 0.0 -46 0.0 -3.5
Industry Thousand Per cent
90
stood at 38.7 per cent in the fourth quarter of 2019. This indicates that 10.4 million people were out of work, which
shows a significant rise when compared to 9.7 million recorded in the same period in 2018.
Figure 5.1: South African unemployment rate, 2017:Q2 to 2019:Q4
Source: Stats SA, 2020
The huge gap that exists between official and expanded unemployment rate indicates that most people in the
country are not actively looking for employment. This widening gap between official and expanded definition has
sparked a debate among researchers. It is argued that people who are not looking for work, but say they want a
job, should be counted as unemployed. This is because the chance of getting employed is very low in SA, and the
costs of job searching are high. Therefore, excluding the discouraged work-seekers result in underestimating the
extent of joblessness in the country. This was further supported by Lloyd and Leibbrandt (2013), from the Southern
Africa Labour and Development Research Unit (SALDRU), who found that people who are not looking for
employment “are involuntarily unemployed and should be seen and counted as such”.
5.2.3 Unemployment distribution by age and gender
The distribution of unemployment by gender reveals that gender inequality still persist in the country as women
experience a higher unemployment rate compared to men. The QLFS shows that the unemployment rate was
higher among women at 31.3 per cent compared to men at 27.2 per cent. The challenge of high unemployment
rate among women is evident also on the low LAR and LFPR at 36.9 per cent and 53.8 per cent respectively. The
LAR for men was estimated at 48 per cent, whilst the LFPR was 65.9 per cent. Therefore, men of the working age
population experience lower unemployment than their women counterparts. This observation is further supported
by higher LAR and LFPR for men compared to women, which indicates that men are most likely to be absorbed in
the labour market and are actively participating in various economic activities. It is important, therefore, that
government continues to implement measures to empower women and encourage them to participate in various
economic activities. This should include incentives to encourage young women to participate in businesses by
creating an environment conducive for SMMEs to thrive.
27.7 27.7
26.7 26.7
27.227.5
27.1
27.6
29.0 29.129.1
22.0
23.0
24.0
25.0
26.0
27.0
28.0
29.0
30.0
-350 000
-150 000
50 000
250 000
450 000
650 000
Number of unemployed Unemployment rate
91
With regards to the unemployment distribution by age, it is noted with discomfort that young people face high
unemployment rate compared to the elder people of the working age cohort. This is evident from the QLFS which
shows that the unemployment rate was high at 58.1 per cent among young people aged 15 to 24 years, followed
by those aged 25 to 34 at 35.6 per cent. High unemployment among young people is attributable to different factors
which include, but are not limited to, low educational attainment, lack of skills, slow economic performance,
mis-match between high wage requirements and rigid employment policies, among others.
In respect of education, an increasing number of young people leave school without completing secondary level
thereby reducing their chances of being employed. This also contributes to the skills-deficit in the country especially
among young people, which makes them unemployable in almost all the sectors of the economy. There is also a
mis-match between the skills available in the work force and those required in the job market. This contrasts with
an unemployment rate among those aged above 35 years which is relatively low. For instance, the unemployment
rate was low among people aged between 45 to 54 years at 17.5 per cent and those aged 55 to 64 at 9.2 per cent
in the fourth quarter of 2019 (Stats SA, 2020).
5.2.4 Unemployment distribution by level of education
Figure 5.2 depicts the proportion of the unemployed population by level of education during the fourth quarter of
2019. As indicated above, low educational attainment is cited among the factors that contribute to rising
unemployment in SA. This is evident from the figure below which indicates that people with less than a matric level
of education (55.9 per cent) comprise the largest share of the unemployed population, followed by those with matric
only at 34.7 per cent. However, unemployment was relatively low among graduates at 1.9 per cent. Given the
negative correlation that seem to exist between educational attainment and unemployment as correctly pointed
out in chapter 3, more attention should be directed at reducing school drop-out rate and improving access to
Technical and Vocational Education and Training (TVET) colleges. This would ensure that young people who left
schooling without completing their secondary level get access to TVET colleges and pursue their careers on
various skills required in the labour market.
Although unemployment is still low among graduates, a rate of 1.9 per cent is still huge and unacceptable as
unemployed graduates are in possession of various degrees and national diplomas. The unemployment rate
among graduates might increase if not addressed because factors that contribute to their unemployability will
continue to affect new entrants and thus increase the number of unemployed graduates. Most graduates remain
unemployed due to a mismatch between the qualifications they possess and the needs of the economy. Students
must therefore be guided towards attaining skills and qualifications that the economy needs.
92
Figure 5.2: Proportion of the unemployed by education level, 2019: Q4
Source: Stats SA, 2020
The challenge of youth unemployment persists in spite of various government programmes that sought to promote
economic inclusion through industrialisation and job creation. This includes the incentive schemes that are
developed in accordance with the Industrial Policy Action Plan (IPAP), which seeks to establish an industrial
development path that is characterised by increased participation of previously marginalised citizens and regions.
The most recent incentive scheme of this nature is the Black Industrialist Scheme (BIS), which centres on the
growth and global competitiveness of black-owned manufacturing. Another important incentive scheme is the Agro-
Processing Support Scheme (APSS), which aims to encourage South African agro-processing and beneficiation
(agri-business) enterprises to invest in up and downstream support industries, and in the process enhance
transformation. This is because the agro-processing sector has a tremendous potential for contributing towards
the economy in terms of stimulating investment, economic diversification, and job creation. Other programmes
include the Aquaculture Development and Enhancement Programme46 (ADEP), Incubation Support Programme47
(ISP), and Automotive Investment Scheme48 (AIS), among others.
In 2018, the first annual Presidential Job Summit was launched as a platform where various issues regarding
employment opportunities available to assist young people were discussed. In this regard, progress is made in
respect of the removal of the regulatory inhibitors in the pharmaceutical industry, the review of the classification of
critical skills, and expanding short-term training opportunities for young people in high growth sectors such as
business processing services. On the business perspective, there is progress made with respect to the
establishment of an online company registration system that will enable users to register a company and apply to
46 The Aquaculture Development and Enhancement Programme (ADEP) aims to develop emerging aquaculture farmers, increase production, sustain and
create jobs, and encourage geographical diversification.
47 The Incubation Support Programme (ISP) was aimed at building self-sustaining SMMEs through skills transfer, enterprise development, supplier
development, and marketing opportunities so that they could generate revenue over time, create jobs, and contribute to economic growth.
48 The Automotive Investment Scheme (AIS) is aimed at building on and sustaining these gains through investment in new and replacement models and
components that will increase plant production volumes, create employment, and strengthen the automotive value chain.
Less than matric; 55.9
Matric; 34.7
Graduates; 1.9
Other tertiary; 6.8
Other; 0.6
93
obtain a tax number, VAT number, B-BBEE certificate, unemployment insurance and the skills development levy,
among others, in one place. Through this online portal, government aims to significantly reduce the time it takes
to set up a company.
The Youth Employment Service (YES) was also launched in an attempt to assist young people with their needs in
terms of employment. It also aimed at persuading corporates to commit to providing learnerships to first-time
jobseekers in line with the quest to upgrade skills and education, among others. This recognises that specific needs
vary by workplace, with areas for improvement ranging from work re-organisation to enhance career mobility and
create more opportunities for semi-skilled and skilled workers; to greater transparency around pay in large
organisations; to continued support for joint ownership by workers and communities; to upgrading supervisory,
communication and mediation practices.
5.3 The Composition of KZN’s Labour Market
The provincial economy has been experiencing numerous structural challenges over the years, which impacts
negatively on the sustainability of employment creation strategies. The labour market outcome is affected also by
the wage rigidities and shortage of a skilled workforce, among others. It is important, therefore, to provide a review
of the labour force characteristics for the province and thus draw recommendations that can guide policy
development. Table 5.3 summarises KZN’s labour force characteristics from the fourth quarter of 2018 to the fourth
quarter of 2019. KZN has the total working age population of about 7.1 million, which is distributed proportionately
between the labour force and not-economically active population.
Table 5.3 Labour force characteristics in KwaZulu-Natal, 2018:Q4 to 2019:Q4
Source: Stats SA, 2020
The table shows that the number of people employed decreased from 2.67 million in the third quarter of 2019 to
2.66 million in the fourth quarter of the same year. However, it increased slightly when compared to the same
period in 2018 where it was recorded at 2.65 million. Therefore, KZN was among the provinces that reported
employment losses similar to Limpopo (LP), Eastern Cape (EC), and Free State (FS) with 35 000, 18 000 and
10 000 respectively in the fourth quarter of 2019. In contrast, other provinces recorded employment gains whereby
Gauteng (GP) (38 000), North West (NW) (32 000), and Western Cape (WC) (24 000).
KwaZulu-Natal
Population 15-64 yrs 7 055 7 082 7 109 7 135 7 161 26 106 0.4 1.5
Labour force 3 561 3 469 3 563 3 610 3 554 -56 -7 -1.5 -0.2
Employed 2 648 2 598 2 635 2 674 2 664 -10 16 -0.4 0.6
Unemployed 913 872 929 936 890 -46 -24 -4.9 -2.6
Not economically active 3 494 3 612 3 545 3 526 3 608 82 113 2.3 3.2
Rates (%)
Unemployment rate 25.6 25.1 26.1 25.9 25.0 -0.9 -0.6
Employed/ population rate (Absorption) 37.5 36.7 37.1 37.5 37.2 -0.3 -0.3
Labour force participation rate 50.5 49 50.1 50.6 49.6 -1.0 -0.9
Qtr-to-qtr
change
year-on-year
change
Thousand Percentage
Oct-Dec 2018 Jan-Mar 2019Year-on-Year
changeOct-Dec 2019Apr-Jun 2019 Jul-Sep 2019
Qtr-to-qtr
change
94
The challenge of joblessness is also evident from other labour market indicators such as the LAR and LFPR. The
LAR was low at 37.2 per cent during the fourth quarter of 2019, slightly lower than 37.5 per cent recorded in the
third quarter. It is within this context that KZN continue to rank with the provinces that reported the lowest LAR
such as EC at 32.1 per cent, LP at 36.8 per cent, and NW at 37.9 per cent. Therefore, the policy makers should
continue to implement policies aiming to improve skills among the workforce and also promote measures to ensure
sustainable economic growth. The provinces that recorded the largest LAR was WC and GP at 53.7 per cent and
48.7 per cent, respectively (Stats SA, 2020). With regard to the LFPR, table 5.3 shows a decrease of 1 percentage
point from 50.6 per cent in the third quarter to 49.6 per cent in the fourth quarter of 2019. It should be noted that
KZN recorded the second lowest LFPR after LP at 47.9 per cent. The provinces that have the highest LFPR include
GP at 70.5 per cent, followed by WC at 67.9 per cent and FS at 63.2 per cent (Stats SA, 2020).
5.3.1 Employment distribution by industries
Table 5.4 depicts KZN’s employment distribution by industries from 2008 to 2018. With the South African economy
shifting gradually towards a more industrialised system of production chain, it is not surprising to realise the
dominance of the tertiary sector in terms of job creation. The dominant feature of the tertiary sector is evident in all
provinces. In KZN, the tertiary sector contributes about 70 per cent of the total provincial employment. The
continuous upward trend has been maintained over the period under review. The tertiary sector is estimated to
have contributed about 74 per cent in 2018, increasing from 70.5 per cent in 2008. This enormous contribution by
the services sector is induced by the two main industries, namely, community services and trade.
The community services industry has been the largest employer in the province since 2013 and is expected to
remain dominant over the short to medium term. The broad-based contribution by this industry was estimated at
23.6 per cent in 2018, up from 18.6 per cent in 2008. The trade industry was the largest employer in the province
between 2008 and 2012, before it was outplayed by the community services. It has been the second largest
contributor to the total provincial employment since 2013 and is estimated to have contributed about 21 per cent
in 2018. The significant contribution by the trade industry to the provincial economy is underpinned by the two
busiest ports of Durban and Richard’s Bay. The ports make it easier for domestic exporters and importers to
transfer and receive goods and services form different partners internationally.
It is worth mentioning that extensive employment creation should emanate from the labour intensive sectors such
as the primary and secondary sectors because it has the potential to employ more people than the tertiary sector.
The latter is driven largely by government as shown in the table and depending on government to generate
employment is undesirable. This is because the role of government is to promote and develop a conducive
environment in order for the businesses to thrive. In doing so, the employment rate would increase drastically
because the labour intensive sectors will expand their plants which requires more labour. This could play a
fundamental role in increasing the production of exportable products and thus widen the export base, whilst
opening more job opportunities. Nevertheless, the table shows that the primary and secondary sectors contribute
95
25 per cent to the provincial employment jointly. The primary sector contribute the least at 5.4 per cent as reported
in 2018.
Table 5.4: KZN’s employment by industries, 2008 to 2018
Source: IHS Markit, 2020
Despite the ailing contribution, the interesting observation is that there has been a robust upward trend since 2012.
The rebound in the primary sector can be attributed to a significant contribution by the agricultural sector, which is
estimated to have contributed 4.9 per cent in 2018. The province should continue to implement policies and
strategies that seek to promote agricultural sector development. This is because there is tremendous potential for
agricultural expansion in the province, such that if the agricultural natural resources are optimally managed, the
production yield could be increased dramatically and thus unlock the full agricultural production potential. The
province has vast hectares of land which, if used optimally, could contribute significantly to food security. This can
be done by encouraging investment in primary agriculture as well as agro-processing. In this regard, the province
can take advantage of the APSS as mentioned above in order to promote the agro-processing sector within the
province.
The secondary sector, on the other hand, has been decreasing in relative terms over the period under review. It is
estimated to have contributed 20.6 per cent in 2018, which is relatively lower than 22 per cent recorded in 2008. It
is disconcerting, however, to observe that the continuous decline in this sector is driven mostly by the
manufacturing industry which shows a consistent downward trend over time. In 2018, the manufacturing industry
contributed about 12.4 per cent to the total provincial employment, down from the highest of 14.3 per cent in 2008.
Ideally, the manufacturing sector should be the largest contributor to employment as it can assist in creating job
opportunities. The province should invest more effort towards reviving the manufacturing industry through the
incentive schemes that are developed by the Department of Trade and Investment (DTI), some of which are
mentioned above. In doing so, the employment contribution by this industry might increase as industries expand
their plants thereby requiring more labour. This could also play a fundamental role in increasing the production of
exportable products thus broadening the export base, whilst creating more job opportunities. Further, skills
development focusing on different components of the manufacturing industry should be a priority for government
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Primary Sector 7.5 6.1 5.3 4.9 4.6 4.6 4.8 5.3 5.5 5.4 5.4
Agriculture 7.1 5.8 5.0 4.6 4.2 4.2 4.4 4.9 5.1 5.1 4.9
Mining 0.4 0.3 0.3 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4
Secondary Sector 21.9 22.2 22.6 22.7 22.1 21.9 21.9 21.5 20.6 20.1 20.6
Manufacturing 14.3 14.2 14.1 14.0 13.7 13.4 13.1 12.6 12.2 12.1 12.4
Electricity 0.3 0.3 0.3 0.4 0.4 0.4 0.4 0.4 0.3 0.3 0.3
Construction 7.3 7.8 8.1 8.2 8.0 8.1 8.4 8.5 8.1 7.7 7.8
Tertiary Sector 70.6 71.6 72.1 72.4 73.3 73.5 73.3 73.1 73.9 74.5 74.0
Trade 22.3 21.8 21.7 21.9 21.8 21.7 21.7 21.9 21.8 21.5 21.0
Transport 5.9 6.3 6.5 6.7 6.9 6.8 6.4 6.0 5.9 6.0 6.2
Finance 13.9 14.3 14.2 14.0 14.1 13.8 13.3 13.2 13.6 14.2 14.4
Community services 18.7 19.5 20.2 20.7 21.6 22.4 23.1 23.3 23.7 23.8 23.6
Households 9.7 9.8 9.4 9.0 8.9 8.8 8.7 8.7 8.9 9.0 8.8
96
in order to ensure that a large number of people get absorbed in the industry and also address the skills shortage
in the province.
5.3.2 Unemployment trends in KwaZulu-Natal
Figure 5.3 summarizes unemployment rate in KZN from 2009 to 2018. Using the official definition of the
unemployment rate, the province has realised a persistent upward trend in unemployment over the subsequent
years starting in 2011. The figure shows that unemployment was estimated at 24 per cent in 2018, which indicate
a significant increase from 20.7 per cent that was reported in 2011. According to Stats SA (2020), using the narrow
definition of the unemployment rate, it stood at 25 per cent in the fourth quarter of 2019, down from 25.9 per cent
in the third quarter. The unemployment rate also declined by 0.6 percentage points when compared to the same
period in 2018. At this rate, KZN recorded the third lowest unemployment rate after LP (23.1 per cent) and WC
(20.9 per cent). The provinces that had the highest official unemployment rates above the national average during
the fourth quarter of 2019 include EC, MP and FS at 39.5 per cent, 35 per cent and 33.6 per cent, respectively.
Figure 5.3: Unemployment rate (official and expanded unemployment) in KZN, 2009 to 2018
Source: IHS Markit, 2020
Unemployment rate is unacceptably high in KZN when measured using the expanded49 definition, which includes
also the discouraged job-seekers. The figure shows that unemployment based on this definition has been
consistently accelerating over the period under review. In 2018, it was recorded at 41 per cent which is a significant
increase from 33.8 per cent in 2009. There is a huge gap between the official and the expanded unemployment
rate whereby the former is almost doubled the latter. This indicates a stark reality that most people of the working
age in the province are not actively looking for employment and thus form part of the discouraged work-seekers.
The quarterly labour force survey (QLFS) shows that the expanded unemployment rate was 41.9 per cent in the
49 Expanded unemployment rate does not distinguish between active and discouraged job-seekers, but instead count all people without jobs as unemployed.
22.0 20.9 20.7 21.1 21.6 21.8 22.0 23.0 23.8 24.0
33.8 37.3 37.3 38.4 37.7 39.0 36.839.9
40.8 41.0
Unemployment rate, official definition Unemployment rate, expanded definition
97
fourth quarter of 2019, up from 41.4 per cent a year ago. The provinces that recorded high rates of the expanded
unemployment rate was EC at 47.7 per cent, followed by LP at 44 per cent and MP at
43.8 per cent (Stats SA, 2020).
Although KZN’s unemployment rate is still below that of national and many other provinces, it remains one of the
major socio-economic challenges within the province that contributes to high levels of poverty and inequality. It is
necessary that drastic measures are implemented to promote inclusive economic growth. This is acknowledged in
the Provincial Growth and Development Plan (PGDP) (2019), which stipulates that creating jobs through an
inclusive economy is a key enabling factor for the province. The PGDP further highlights the importance of focusing
on the creation of employment through the realisation of agricultural potential, enhancing industrial development
through investment into the key productive sectors of: manufacturing, tourism, transport and logistics, the maritime,
the green economy and services. Other government initiatives through which the scourge of unemployment can
be narrowed, include a Provincial Business Retention and Expansion (BR&E) programme, as well as a full range
of industrial policy support programmes and measures.
5.3.3 Unemployment distribution by age and gender
The scourge of high unemployment in the province is rife among the youth compared to the older people of the
working age. Figure 5.4 illustrates the distribution of the unemployment rate by age in 2018. The figure shows that
young people aged between 15 and 24 years experienced high unemployment rates at 51.7 per cent and
70.3 per cent using the official and expanded definition, respectively. This is followed by those aged between 25
and 34 years with an official unemployment rate reported at 30.7 per cent and an expanded unemployment rate of
44.6 per cent. The overall youth unemployment rate is, therefore, recorded at 41.2 per cent and 57.5 per cent
based on official and expanded definition, respectively.
The official unemployment rate among those aged between 35 and 44 years was estimated at 18.3 per cent,
followed by those in the age of 45 to 54 and 55 to 64 years at 11.7 per cent and 5.3 per cent respectively. The
prevalence of unemployment among the youth population is attributed to the lack of skills which make them to be
unemployable. This is further worsened by low educational attainment as most young people tend to drop out of
school before completing secondary level. It is within this backdrop that the province has a large number of
discouraged work-seekers and thus high expanded unemployment rate. In terms of unemployment distribution by
gender, the province had high rate of unemployment among female at 24.8 per cent compared to their male
counterpart at 23.4 per cent in 2018.
98
Figure 5.4: Unemployment by age in KZN, 2018
Source: IHS Markit, 2020
As the youth unemployment is a national challenge, programmes that sought to assist young people with various
skills continue to be a priority for government at national, provincial and local level. The provincial government is
also working on ensuring that young people are at the centre of all economic activities and utilises all opportunities
available within the province. In doing so, skills development is at the forefront whereby new entrants are afforded
an opportunity to gain entry level experience through internships, mentorships and learnerships.
Furthermore, government strives to promote Small, Medium and Micro Enterprise (SMMEs) that are owned by the
youth. This follows the official launch of the KZN Youth Fund (KZNYF) program in 2019, which is aimed at assisting
youth owned businesses with necessary financial support and other capital or equipment required for proper
operational structures of their businesses. This initiative emanated from a realisation that SMMEs have a potential
to generate much needed employment and thus contribute towards GDP growth in the province. It has also been
noted that most small businesses collapse at an early stage of operation due to lack of financial support,
entrepreneurial and business management skills, information regarding entering the export market, and high
competition within industries in which they operate, among others. Therefore, the KZNYF aims to address these
challenges and assist young people with the necessary financial support and create a conducive environment for
SMMEs to thrive.
5.4 The Composition of District’s Labour Market
5.4.1 Districts’ employment trends
Table 5.5 display employment distribution by district municipalities for the years 1996, 2008 and 2018. There is a
huge disparity between formal and informal employment among the district, whereby the former comprises the
largest share of total employment in all districts. Notwithstanding the benefits of creating formal employment
opportunities, attention should also be directed at promoting informal employment in order to cater for the
51.7
30.718.3
11.75.3
70.3
44.6
28.8
22.1
14.3
Unemployment Rate - official definition Unemployment Rate - expanded definition
99
population that does not possess adequate skills to be absorbed in formal employment. This is because focusing
a great deal of attention on formal employment may perpetuate unemployment especially among unskilled people.
In this regard, jobseekers might ultimately spend longer periods searching from formal employment instead of
venturing into informal employment or opening their own businesses.
Table 5.5: Employment by district municipalities, 1996, 2008 and 2018
Source: IHS Markit, 2020
The eThekwini metro reported the largest total number of people employed at 1.2 million in 2018, relatively higher
than 721 068 and 1.1 million in 1996 and 2008 respectively. The higher employment rate in the metro is supported
by various economic activities including tourism, harbour ports, and manufacturing industries, among others.
Nevertheless, most people employed in 2018 were from formal employment (1 million) as opposed to informal
employment (195 273). This is closely followed by uMgungundlovu district with 317 126 people employed in 2018,
up from 188 101 and 278 172 people that were employed in 1996 and 2008 respectively. Given the critical role
that the districts play toward the Regional-Gross Domestic Product (GDP-R), it clearly demonstrate that
employment has a positive correlation with economic growth. Similar to the Metro, employment in uMgungundlovu
is concentrated vastly on the formal sectors compared to informal sectors.
The table further highlights the fact that most districts that are semi and deeply rural tend to experience low levels
of employment growth. This observation relates also to low contributions toward provincial GDP, which is
attributable to underdeveloped economic infrastructure, lack of concentration of economic activities, and relatively
high rate of unskilled workforce. Even those with skills are therefore forced to migrate to other districts and
provinces to seek employment opportunities in large cities. The districts that recorded low levels of employment in
2018 include UMzinyathi district (64 446), followed by uMkhanyakude (78 333) and Harry Gwala (95 956) (Table
5.5).
5.4.2 District’s employment by industries
Table 5.6 illustrates the distribution of district employment by industries in 2018. Employment among all districts
are driven largely by the tertiary sector, with over a 60 per cent contribution toward total district employment in
1996 2008 2018 1996 2008 2018 1996 2008 2018
eThekwini 662 639 988 857 1 033 660 58 429 182 255 195 273 721 068 1 171 112 1 228 932
Ugu 76 146 111 597 117 140 14 765 30 739 31 260 90 911 142 336 148 400
uMgungundlovu 166 601 230 852 263 133 21 499 47 321 53 993 188 101 278 172 317 126
uThukela 74 032 111 348 110 916 13 400 30 675 27 095 87 432 142 023 138 011
uMzinyathi 39 572 50 688 50 117 8 624 14 466 14 328 48 196 65 153 64 446
Amajuba 60 173 85 844 92 927 9 523 23 274 22 470 69 696 109 118 115 397
Zululand 81 232 100 445 94 428 15 477 28 969 27 015 96 709 129 414 121 444
uMkhanyakude 53 015 63 745 60 663 11 140 20 220 17 670 64 156 83 965 78 333
King Cetshwayo 126 114 179 497 182 333 18 638 39 261 39 967 144 752 218 758 222 299
iLembe 59 851 88 389 102 604 11 360 23 424 26 884 71 211 111 813 129 488
Harry Gwala 43 473 74 082 74 508 11 768 22 796 21 448 55 241 96 878 95 956
Informal Sector EmploymentFormal Sector Employment Total Employment
100
2018. This concurs with the observation highlighted in the previous section regarding the focus on formal
employment compared to informal employment. While formal employment is desirable, however, as the district
labour markets are flooded with significant unskilled workforce, informal employment may play a vital role in
ensuring that those with low or no skills participate to the mainstream economy. Nonetheless, employment at
district level was driven largely by the community services and trade in 2018. Community services were dominant
in the uMkhanyakude (35.6 per cent), uMzinyathi (29.3 per cent) and Zululand (28.6 per cent) districts while trade
was the largest employer in the Amajuba (24.5 per cent). The emphasis should be placed on labour intensive
sectors such as the secondary and primary sectors. These sector have a capacity to absorb more labour and
produce exportable products.
Table 5.6: District employment by industries, 2018
Source: IHS Markit, 2020
The secondary sector was the second largest contributor to employment in all districts, whereby iLembe and
eThekwini recorded 30.3 per cent and 21.4 per cent respectively. The largest proportion of employment in iLembe
was generated in the manufacturing industry at 18.7 per cent and construction at 11.4 per cent. The same applies
in eThekwini where employment in the secondary sector was driven largely by manufacturing and construction at
14 per cent and 7.1 per cent respectively. Other districts that showed significant impact of manufacturing on their
employment is Amajuba (13.7 per cent) and uMgungundlovu (11.6 per cent). The primary sector is the least
contributor to employment in all districts. However, it contributes meaningfully in other districts such as Harry Gwala
(10.9 per cent), King Cetshwayo (9.3 per cent) iLembe (8.9 per cent). Districts that have high contribution rates by
the agriculture sector include Harry Gwala with 10.8 per cent and iLembe with 8.5 per cent.
5.4.3 Districts’ unemployment trends
Table 5.7 illustrates the unemployment rates by districts from 2008 to 2018. With the exception of the eThekwini
metro and uMgungundlovu district, all districts had unemployment rates above the provincial average of 24 per
cent in 2018. However, it should be noted that unemployment is high among districts that are in rural areas
compared to other areas. This is evident from the table which shows that the uMkhanyakude district recorded the
highest unemployment rate at 37.9 per cent in 2018. This district has consistently been reporting the highest
eThekwini Ugu uMgungundlovu uThukela uMzinyathi Amajuba Zululand uMkhanyakude King Cetshwayo iLembe Harry Gwala
Primary sector 4.1 6.8 6.2 7.8 7.1 5.0 6.4 7.3 8.2 7.0 8.3
Agriculture 3.8 6.2 6.0 7.4 6.6 4.5 5.6 6.2 7.1 6.4 7.9
Mining 0.3 0.6 0.3 0.4 0.5 0.5 0.8 1.1 1.1 0.6 0.3
Secondary sector 21.1 19.4 19.4 19.7 19.0 19.8 18.1 18.7 21.5 23.9 18.3
Manufacturing 13.2 10.9 11.7 11.0 10.5 12.4 9.5 9.2 12.2 14.6 8.1
Electricity 0.3 0.3 0.4 0.4 0.3 0.3 0.4 0.3 0.3 0.3 0.3
Construction 7.6 8.1 7.3 8.2 8.2 7.1 8.2 9.1 8.9 8.9 9.9
Tertiary sector 65.6 64.2 65.0 65.6 65.8 67.7 67.9 66.3 62.8 60.8 64.2
Trade 21.2 21.4 20.0 22.0 21.1 23.5 21.1 20.1 19.8 20.3 20.8
Transport 6.6 5.8 5.5 5.0 5.6 6.5 5.8 5.8 6.4 5.9 5.0
Finance 15.4 12.7 13.9 12.0 13.1 14.7 13.7 12.2 13.1 13.4 10.9
Community services 22.4 24.4 25.6 26.5 26.1 23.0 27.3 28.1 23.5 21.2 27.5
Households 9.2 9.6 9.4 7.0 8.1 7.5 7.7 7.7 7.5 8.3 9.3
101
unemployment rate. Other districts that showed exceptional high rates of unemployment include uThukela (31.2
per cent), uMzinyathi (30.9 per cent) and Zululand (30.4 per cent).
The challenge of unemployment in these districts might be attributed to among other things, the shortage of
economic activities due to underdeveloped economic infrastructure, and low-skilled workforce. The former is
evident from Chapter four of this publication which highlights that these districts are among the least contributors
to the provincial GDP growth. The latter is perpetuated by outward-migration of people with skills who tend to look
for job opportunities in urban areas within and out of the province. Also, rural areas normally experience high rate
of school drop-outs whereby young people leave school without completing secondary level, which makes
impossible for them to qualify for higher education that will give them National Qualifications Framework (NQF)
qualifications and thus employment.
Nonetheless, eThekwini metro recorded the lowest unemployment rate at 17.4 per cent, followed by
uMgungundlovu at 23.6 per cent. It is not surprising that the metro has lower rates of unemployment given the
various factors that boost their capacity to generate employment opportunities. The most common economic
activities taking place within the eThekwini metro that contribute to GDP and thus employment growth includes,
but are not limited to, harbour ports, tourism attractions, and manufacturing industries. It is for this reason that
trade and manufacturing industries, as indicated in the previous section, are among the major contributors to total
employment in the metro.
Similar to national and provincial levels, the scourge of high unemployment rate among districts persists in spite
of different initiatives aimed at addressing the lack of skills in the workforce, particularly the youth population. The
public and private sectors have been committed to providing skills through internship and graduate programmes.
However, high unemployment rate observed in the past five years shows that policymakers should continue
working hard to promote inclusive economic growth that will fuel more job opportunities.
Table 5.7: Unemployment by district municipalities, 2008 to 2018
Source: IHS Markit, 2020
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
eThekwini 21.9 19.4 18.1 17.8 17.6 16.9 16.6 17.1 16.8 15.4 14.5
Ugu 26.6 24.4 23.6 23.7 24.7 26.2 26.9 26.7 28.3 30.7 31.8
uMgungundlovu 24.5 22.1 21.0 20.7 21.4 21.3 19.9 18.0 17.5 17.6 16.9
uThukela 28.4 25.6 24.1 23.4 24.3 25.2 25.3 25.4 27.8 31.2 32.8
uMzinyathi 27.2 24.6 23.2 22.6 23.9 26.4 28.6 30.9 36.0 42.1 45.9
Amajuba 29.7 26.7 25.3 24.7 25.9 26.8 26.7 26.4 28.1 30.0 30.3
Zululand 25.3 23.1 22.2 22.0 23.3 26.1 28.8 31.5 36.2 40.8 43.2
uMkhanyakude 30.9 29.4 29.4 30.5 31.8 35.2 38.1 40.3 44.5 49.1 51.6
King Cetshwayo 24.0 22.1 21.5 21.8 22.7 23.3 22.9 22.0 22.8 24.3 24.6
iLembe 25.7 23.2 22.1 21.8 22.6 24.6 25.8 26.1 28.0 30.6 32.0
Harry Gwala 25.1 23.3 22.7 23.0 24.1 25.6 26.2 26.2 28.3 31.6 33.3
KwaZulu-Natal 24.4 22.0 20.9 20.7 21.1 21.6 21.8 22.0 23.0 23.8 23.8
Unemployment rate trends
102
Notwithstanding the low unemployment rates in the urban districts, government in collaboration with other
stakeholders should continue implementing pro-growth policies such as improving economic infrastructure in rural
arears, promoting Small, Medium and Micro Enterprises (SMMEs) through skills development initiatives and
improve and expand Technical and Vocational Education and Training (TVET) colleges, among others. Further,
emphasis should be given on promoting education for scarce skills in order to ensure that more people get
absorbed in labour-intensive industries such as mining, manufacturing, construction and agriculture, among others.
5.4.4. Districts’ unemployment distribution by age and gender
Table 5.8 depicts distribution of district’s unemployment rate by age in 2018. Similar to KZN, unemployment rate
in all districts and the metro is much higher among the youth population compared to other age cohorts.
Disturbingly, districts that are mostly rural experience pronounced youth unemployment. Using the official
definition, uMkhanyakude district recorded an average unemployment rate of about 69.8 per cent for the people
aged between 15 and 34 years. This was closely followed by uMzinyathi with 66.5 per cent for the same age group.
Both districts also showed higher youth unemployment rates when measured using the expanded definition,
whereby uMkhanyakude had the largest youth unemployment rate at 81.2 per cent while uMzinyathi had 80.9 per
cent on average. Although still high, however, unemployment rate was reasonably lower for other age groups
compared to young people of the working age. As indicated in the previous sections, youth unemployment is driven
largely by lower educational attainment, skills mis-match, and rigid employment policies, among others.
Table 5.8: Unemployment rate distribution by age, 2018
Source: IHS Markit, 2020
Nonetheless, eThekwini metro and uMgungundlovu district showed reasonably lower youth unemployment rates
when compared to other districts within the province. Using the official definition, the average unemployment rate
for those aged between 15 and 34 years was reported at 28 per cent in eThekwini and 33.5 per cent in
uMgungundlovu for the same age category. In terms of expanded unemployment rate, the metro recorded an
average of 41.4 per cent whilst uMgungundlovu reported 51.2 per cent. The disparity that exists between districts
in terms of youth unemployment highlight the fact that youth in the province does not have equal access to
employment opportunities, such that those in urban areas are most likely to get better opportunities than those in
15-24 25-34 35-44 45-54 55-64 15-24 25-34 35-44 45-54 55-64
KwaZulu-Natal 51.7 30.7 18.3 11.7 5.3 70.3 44.6 28.8 22.1 14.3
eThekwini 36.7 19.3 10.5 5.7 2.0 54.0 28.7 17.7 11.6 7.7
Ugu 65.4 42.0 24.5 15.8 8.6 80.3 56.8 35.9 27.7 19.9
uMgungundlovu 43.7 22.4 12.1 7.1 3.6 65.2 37.1 21.1 14.9 9.7
uThukela 53.6 40.2 29.3 19.9 8.8 73.0 54.3 40.0 31.4 18.9
uMzinyathi 75.5 56.6 38.8 26.4 14.4 88.6 73.2 56.4 46.8 34.6
Amajuba 64.4 41.2 22.4 13.2 6.3 79.0 55.1 33.0 23.6 14.6
Zululand 76.4 52.4 33.8 23.2 13.2 87.7 67.8 48.2 40.0 28.9
uMkhanyakude 79.0 60.6 43.2 32.9 19.5 88.8 73.6 57.7 50.9 39.1
King Cetshwayo 45.9 33.1 17.7 10.0 4.7 67.8 48.3 29.2 21.8 15.0
iLembe 62.1 39.5 24.9 16.0 8.0 78.4 54.1 36.1 28.3 20.6
Harry Gwala 64.9 41.2 25.7 18.4 10.5 79.6 55.6 37.3 31.3 22.7
Unemployment Rate - official definition Unemployment Rate - expanded definition
103
rural areas. Therefore, employment opportunities targeting young people especially in rural areas should be a
priority for the provincial government in order to decisively deal with youth unemployment rate.
5.5 Labour force participation rate
Table 5.9 depicts the LFPR for district from 2008 to 2018. A LFPR indicates an increase in the number of persons
who are economically active. Therefore, the highest LPFR in these districts shows that most people of the working
age cohort are actively involved in different economic activities. UMgungundlovu district had the highest LFPR at
37.5 per cent, followed by eThekwini metro and King Cetshwayo at 36.3 per cent and 32.2 per cent respectively.
The LFPR in uMgungundlovu and eThekwini has been reported above 35 per cent for almost the entire period
under review. On the other hand, King Cetshwayo has revolved around 30 per cent in most years, except in 2010,
2011 and 2012 where it was recorded at 28.6 per cent, 28.3 per cent and 28.7 per cent respectively. The district
with the lowest LFPR were uMkhanyakude at 19.7 per cent and uMzinyathi at 20.2 per
cent.
Table 5.9: Labour force participation rate, 2008 to 2018
Source: IHS Markit, 2020
5.6 Labour absorption rate
Table 5.10 shows LAR for district from 2008 to 2018. The LAR is relatively high among district that are in urban
areas compared to those in rural areas. As expected, eThekwini metro reported the highest LAR at 31.2 per cent,
which is attributable to various economic activities concentrated in the metro such as tourism attractions, busiest
harbour ports and manufacturing industries, among others. UMgungundlovu district recorded the second highest
LAR at 28.1 per cent which also emanates from economic activities taking place within the district. The LAR in
uMgungundlovu has been fluctuating around 28 per cent without a significant change. The lowest LAR was
recorded in uMkhanyakude at 11.4 per cent, followed by uMzinyathi at 11.5 per cent and Zululand at 14.1 per cent.
Low LAR indicates that local economies are unable to create employment and thus absorb more jobseekers
particularly the new entrants.
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
eThekwini 40.2 38.6 36.7 36.5 36.5 36.7 36.9 36.6 36.6 37.1 37.3
Ugu 28.0 26.4 24.7 24.2 24.6 25.4 26.4 27.1 27.4 27.5 27.3
uMgungundlovu 36.5 35.2 33.5 33.2 33.5 34.5 36.0 37.1 37.6 37.8 37.6
uThukela 27.8 25.9 23.8 22.9 23.2 24.2 25.6 26.7 27.7 28.5 28.9
uMzinyathi 22.4 20.8 19.0 18.2 18.4 18.7 19.0 19.1 18.9 18.7 18.4
Amajuba 31.3 29.9 28.3 28.0 28.2 29.0 30.0 30.5 30.5 30.3 29.9
Zululand 23.8 22.2 20.4 19.6 19.9 20.2 20.9 21.5 21.9 22.3 22.3
uMkhanyakude 21.8 20.0 18.1 17.2 17.5 18.0 18.7 19.2 19.6 20.0 20.0
King Cetshwayo 30.9 29.5 27.8 27.3 27.7 28.7 30.1 31.0 31.5 31.6 31.5
iLembe 28.9 27.6 26.1 25.8 26.1 26.6 27.4 27.8 27.9 27.9 27.6
Harry Gwala 28.1 26.7 25.0 24.5 24.9 25.5 26.5 27.1 27.2 27.2 26.9
KwaZulu-Natal 32.4 30.9 29.1 28.7 28.9 29.5 30.2 30.6 30.8 31.2 31.1
Labour Force Participation Rate
104
Table 5.10: Labour absorption rate, 2008 to 2018
Source: IHS Markit, 2020
Similar to other labour market indicators, low LAR in rural areas is attributable to the limited economic activites and
low-skilled workforce. The poor economic performance among these districts was reflected in Chapter four of this
publication which highlighted uMzinyathi and uMkhanyakude as the least contributors to provincial GDP growth.
These factors contribute to a large extent towards the widening gap between outward and inward migration in
these districts with the outmigration outweighing the inward migration because young people migrate to other
districts or leave the province to look for better employment opportuninties.
5.7 Job scarcity in KwaZulu-Natal and Districts
Table 5.11 depicts job scarcity in KZN and district municipalities from 2008 to 2018. The province continues to
experience high job scarcity as the table reveal that it was recorded at 24.5 per cent in 2018, slightly higher from
24.4 per cent recorded in 2017. The job scarcity began to increase in 2012 and has remained elevated in
subsequent years. The high rate of job scarcity is attributable to various factors including slow economic
performance, low labour absorption rate, and labour force participation rate. Economic performance has been
relatively subdued at both national and provincial level, which contributes to the inability of economic sectors to
absorb new jobseekers. With the exception of eThekwini, all districts reported high rates of job scarcity and rates
above the provincial average. The eThekwini metro recorded the lowest job scarcity rate at 14 per cent, followed
by uMgungundlovu with 25.1 per cent in 2018. Low job scarcity in these district is attributed to various economic
activities which attract highly skilled labour force from other districts within the province and other parts of the
country.
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
eThekwini 32.9 32.5 31.3 31.1 32.0 33.4 35.0 36.0 36.5 37.2 37.6
Ugu 20.2 19.7 18.8 18.4 17.6 17.1 16.7 16.2 15.5 14.9 14.4
uMgungundlovu 27.2 27.0 26.1 25.9 25.5 25.7 26.2 26.3 26.0 25.9 25.7
uThukela 20.5 19.9 18.7 18.2 18.3 18.5 18.8 18.7 18.3 17.8 17.4
uMzinyathi 13.1 12.7 11.8 11.4 9.6 8.6 8.1 7.6 7.2 6.9 6.6
Amajuba 21.5 21.3 20.6 20.5 19.6 19.3 19.2 18.6 17.9 17.5 17.1
Zululand 16.1 15.4 14.2 13.7 12.4 11.9 11.6 11.3 10.8 10.5 10.1
uMkhanyakude 13.8 13.0 11.8 11.1 10.1 9.6 9.2 8.8 8.3 7.9 7.5
King Cetshwayo 23.1 22.6 21.4 20.9 20.5 20.7 21.2 21.3 21.1 20.9 20.6
iLembe 18.8 18.5 17.8 17.8 15.9 14.9 14.3 13.7 12.8 12.3 11.9
Harry Gwala 19.7 19.2 18.1 17.7 16.5 16.0 15.9 15.6 15.0 14.4 13.9
KwaZulu-Natal 24.3 23.9 22.9 22.6 22.3 22.6 23.1 23.3 23.2 23.2 23.2
Labour absorption rate
105
Table 5.11: Job scarcity in KwaZulu-Natal and Districts, 2008 to 2018
Source: IHS Markit, 2020
The table reveals that job scarcity was considerably higher among districts that are predominantly rural such as
uMzinyathi at 43.2 per cent, uMkhanyakude at 42.2 per cent and Zululand at 37.9 per cent. These districts have
maintained high job scarcity for the entire period under review, whereby uMzinyathi reported 39.3 per cent while
uMkhanyakude was sitting at 34.8 per cent in 2008.
5.8 Labour remuneration and productivity in KwaZulu-Natal
Labour productivity is the measure of output produced by workers in various sectors of the economy with available
inputs. Thus, it highlights the extent to which inputs are efficiently utilised in an economy to produce goods and
services (Barker, 1998). In macroeconomic theory, productivity is linked with labour remuneration, such that the
labour market is in equilibrium when the marginal cost of employing an additional person is equal to the marginal
revenue earned by employing that person. Hence, if the marginal revenue is greater than the marginal cost
associated with employing an extra person, more employees should be hired. Conversely, if the opposite is true,
employees should be released from the company if the marginal cost exceeds the marginal revenue. This suggests
that the labour remuneration should have a positive relationship with labour productivity (Tsoku, 2014).
Figure 5.5 provides a review of the trends in labour productivity and remuneration in KZN, between 2008 and 2018.
Similar to the national trend, the growth rate in labour remuneration has out-weighed productivity growth in KZN
over the period under review. In 2018, the labour productivity grew by 3.7 per cent while the labour remuneration
was growing at 4.2 per cent. In an ideal situation, the labour productivity should be higher than the remuneration
level in order to increase the willingness to absorb more labour into the economy.
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
eThekwini 16.6 14.3 13.3 12.4 13.6 13.1 13.0 13.9 14.5 14.1 14.0
Ugu 25.4 23.3 22.5 22.4 24.3 25.7 26.2 25.9 27.0 28.7 29.0
uMgungundlovu 22.7 20.8 20.2 19.9 21.8 22.7 23.0 22.7 23.5 24.9 25.1
uThukela 24.5 22.2 21.4 21.1 23.6 25.1 25.6 25.1 26.3 28.4 28.7
uMzinyathi 39.3 37.4 36.5 36.1 38.2 39.6 40.1 39.9 41.1 42.8 43.2
Amajuba 28.1 25.7 24.8 24.1 26.5 27.9 28.5 28.5 29.9 31.6 31.8
Zululand 31.3 30.0 29.9 30.3 32.5 34.0 34.4 34.2 35.5 37.4 37.9
uMkhanyakude 34.8 33.4 33.3 34.1 36.3 38.0 38.6 38.4 39.8 41.8 42.2
King Cetshwayo 23.5 22.2 22.4 23.1 25.0 26.3 26.7 26.3 27.3 28.9 29.1
iLembe 33.5 31.4 30.3 29.5 31.5 32.7 33.1 32.9 33.9 35.2 35.3
Harry Gwala 26.4 25.1 25.0 25.3 27.7 29.0 29.3 28.7 29.7 31.5 31.9
KwaZulu-Natal 22.9 20.8 20.0 19.6 21.3 21.9 22.3 22.6 23.5 24.4 24.5
Job Scarcity
106
Figure 5.5: Labour remuneration and productivity in KZN, 2008 to 2018
Source: IHS Markit, 2020
In line with the economic theory, higher productivity above the remuneration level ensures that the costs associated
with employing additional labour into the firm would be less than the revenue. Hence, the economy can continue
absorbing additional employees into the labour market. Interestingly, in KZN there gap between productivity and
remuneration has been declining since 2008. However, the productivity in the province is still low compared to the
remuneration level. This shows that more work needs to be done in the province in terms of skills development in
order to ensure that at least those working do not get retrenched while making efforts to absorb the new entrants
into the labour market.
5.9 Conclusion and policy recommendations
The main focus of this chapter was to provide a review of labour force characteristics at the national, provincial
and district level. In doing so, the analysis tracks the progress made in addressing labour market challenges and
also highlight the areas that worth significant attention from policy makers. At the national level, the main challenge
is the rising unemployment rate that has recently reached that highest level in more than ten years and is above
the average of our peers especially the BRIC countries. The scourge of unemployment is worsened by the
lacklustre economic performance and structural factors. Further, it was discovered that unemployment is prevalent
among young people, women, and people with less than matric education level. It was noted also that young
people are experiencing higher unemployment rate compared to other age groups. Therefore, more attention
should be directed at policies that seek to promote education, skills development and women empowerment by
encouraging women to participate in businesses. This should include measures to ensure that government
programmes such as the Presidential Annual Job Summit and Youth Employment Service (YES) are provided with
enough resources required in the implementation process.
The province of KZN is experiencing almost a similar challenge of rising unemployment, with unemployment rate
reported at 25.9 per cent in the third quarter of 2019. This indicates high probability that average unemployment
8.3
5.0
9.910.9
6.9
5.7
4.5 4.6
6.4 5.9
3.7
16.1
6.8
9.1
10.6
9.59.7
9.2
8.0
8.4
7.5
4.2
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Productivity Remuneration
107
for 2019 will exceed that of 2018 which was estimated at 24 per cent. The most important observation was that
most people of the working age in the province are not economically active, which contributes to higher expanded
unemployment rate as it was reported at 41.4 per cent, almost doubled the official unemployment rate, during the
third quarter. It is within this background that KZN has one of the highest expanded unemployment rate in the
country. Further, the distribution of unemployment by age indicates that unemployment is disproportionately spread
across the age groups whereby the youth population, which is accounts for people aged between 15 to 34 years,
experiences high rate of unemployment compared to other age cohorts. The geographic distribution of
unemployment in terms of district municipalities shows that mostly rural areas tend to experience pronounced
unemployment compared to semi-urban and urban areas. The same applies also in respect of youth employment,
in that rural areas have high youth unemployment rates.
With regards to employment by industries, it is noted that the largest share of employment in KZN emanates from
the tertiary sector, which is driven largely by the community services and trade. The districts have a similar trend
whereby employment is predominantly concentrated in the tertiary sector. The tertiary sector, however, has a low
capacity to employ more people and only requires high skilled labour compared to other sectors. The province
should, therefore, focus its employment creation strategies toward the labour-intensive industries in the primary
and secondary sectors as this may contribute to increased employment growth, expand the export base and
stimulate economic growth. As the statistics reveal that young people are the main victims of unemployment, pro-
employment initiatives targeting the youth should continue to be developed in relation with the current needs of the
economy and reviewed those that are in existence to realign it with the structural factors contributing to the youth
unemployment. This should include strategic approaches to address the lower rate of educational attainment and
skills deficit as the main contributory factors to the low probability of getting employment among young people.
108
Appendix A: List of additional Figures and Tables
Figure A2.1: Global Population Growth
Table A3: Average monthly social grant values in South Africa
Source: National Treasury, 2019
2018/19 2019/20 Percentage increase
Old Age Grant R1 695 R1 780 5.0
State Old Age, Over 75 R1 715 R1 800 5.0
War Veterans R1 715 R1 800 5.0
Disability grant R1 695 R1 780 5.0
Foster care grant R960 R1 000 4.2
Care Dependency grant R1 695 R1 780 5.0
Child Support grant R405 R425 4.9
109
Table A3.1: Crime in Dundee, 2016 to 2019
Source: SAPS, 2019
Case
Difference% Change
Murder 15 17 21 4 23.5%
Sexual Offences 55 63 51 -12 -19.0%
Attempted murder 12 24 22 -2 -8.3%
Assault with the intent to inflict grievous bodily harm 162 124 108 -16 -12.9%
Common assault 161 161 139 -22 -13.7%
Common robbery 28 28 32 4 14.3%
Robbery with aggravating circumstances 76 82 95 13 15.9%
Total Contact Crimes ( Crimes Against the Person) 509 499 468 -31 -6.2%
Carjacking 3 5 5 0 0.0%
Robbery at residential premises 8 12 10 -2 -16.7%
Robbery at non-residential premises 19 10 10 0 0.0%
Robbery of cash in transit 0 0 2 2 2 Cases Higher
Bank robbery 0 0 0 0 0 Cases
Truck hijacking 0 0 0 0 0 Cases
Arson 0 2 3 1 50.0%
Malicious damage to property 57 61 58 -3 -4.9%
Contact-Related Crimes 57 63 61 -2 -3.2%
Burglary at non-residential premises 86 85 62 -23 -27.1%
Burglary at residential premises 255 346 279 -67 -19.4%
Theft of motor vehicle and motorcycle 22 34 33 -1 -2.9%
Theft out of or from motor vehicle 48 62 49 -13 -21.0%
Stock-theft 44 94 100 6 6.4%
Property-Related Crimes 455 621 523 -98 -15.8%
All theft not mentioned elsewhere 237 224 240 16 7.1%
Commercial crime 195 166 231 65 39.2%
Shoplifting 107 119 100 -19 -16.0%
Total Other Serious Crimes 539 509 571 62 12.2%
Total 17 Community Reported Crimes 1 560 1 692 1 623 -69 -4.1%
Illegal possession of firearms and ammunition 22 24 17 -7 -29.2%
Drug-related crime 257 127 146 19 15.0%
Driving under the influence of alcohol or drugs 34 42 34 -8 -19.0%
Sexual Offences detected as a result of police action 1 0 0 0 0.0%
Crime Detected As A Result Of Police Action 314 193 197 4 2.1%
CRIME DETECTED AS A RESULT OF POLICE ACTION
Crime CategoryApril 2016 to
March 2017
April 2017 to
March 2018
April 2018 to
March 2019
Comparison 2017/18 with
2018/19
CONTACT CRIMES ( CRIMES AGAINST THE PERSON)
SOME SUBCATEGORIES OF AGGRAVATED ROBBERY
CONTACT-RELATED CRIMES
PROPERTY-RELATED CRIMES
OTHER SERIOUS CRIMES
110
Table A.3.2: Crime in Durban, 2016 to 2019
Source: SAPS, 2019
Case
Difference% Change
Murder 57 43 61 18 41.9%
Sexual Offences 86 80 84 4 5.0%
Attempted murder 32 53 56 3 5.7%
Assault with the intent to inflict grievous bodily harm 303 228 242 14 6.1%
Common assault 494 594 595 1 0.2%
Common robbery 542 424 671 247 58.3%
Robbery with aggravating circumstances 1 120 1 170 1 141 -29 -2.5%
Total Contact Crimes ( Crimes Against the Person) 2 634 2 592 2 850 258 10.0%
Carjacking 66 67 64 -3 -4.5%
Robbery at residential premises 7 5 6 1 20.0%
Robbery at non-residential premises 149 197 198 1 0.5%
Robbery of cash in transit 2 1 0 -1 -100.0%
Bank robbery 0 0 0 0 0 Cases
Truck hijacking 0 0 0 0 0 Cases
Arson 0 0 1 1 1 Case Higher
Malicious damage to property 367 257 261 4 1.6%
Contact-Related Crimes 367 257 262 5 1.9%
Burglary at non-residential premises 525 470 510 40 8.5%
Burglary at residential premises 171 144 165 21 14.6%
Theft of motor vehicle and motorcycle 727 643 765 122 19.0%
Theft out of or from motor vehicle 1 451 1 613 1 344 -269 -16.7%
Stock-theft 0 0 0 0 0 Cases
Property-Related Crimes 2 874 2 870 2 784 -86 -3.0%
All theft not mentioned elsewhere 2 776 2 387 1 860 -527 -22.1%
Commercial crime 985 911 1 018 107 11.7%
Shoplifting 1 309 1 129 1 024 -105 -9.3%
Total Other Serious Crimes 5 070 4 427 3 902 -525 -11.9%
Total 17 Community Reported Crimes 10 945 10 146 9 798 -348 -3.4%
Illegal possession of firearms and ammunition 48 53 64 11 20.8%
Drug-related crime 1 969 2 025 2 050 25 1.2%
Driving under the influence of alcohol or drugs 1 601 2 687 2 524 -163 -6.1%
Sexual Offences detected as a result of police action 291 298 340 42 14.1%
Crime Detected As A Result Of Police Action 3 909 5 063 4 978 -85 -1.7%
CRIME DETECTED AS A RESULT OF POLICE ACTION
Crime CategoryApril 2016 to
March 2017
April 2017 to
March 2018
April 2018 to
March 2019
Comparison 2017/18 with
2018/19
CONTACT CRIMES ( CRIMES AGAINST THE PERSON)
SOME SUBCATEGORIES OF AGGRAVATED ROBBERY
CONTACT-RELATED CRIMES
PROPERTY-RELATED CRIMES
OTHER SERIOUS CRIMES
111
Table A3.3: Crime in Jozini, 2016 to 2019
Source: SAPS, 2019
Case
Difference% Change
Murder 17 12 12 0 0.0%
Sexual Offences 57 55 57 2 3.6%
Attempted murder 12 9 17 8 88.9%
Assault with the intent to inflict grievous bodily harm 152 167 184 17 10.2%
Common assault 43 34 53 19 55.9%
Common robbery 22 16 24 8 50.0%
Robbery with aggravating circumstances 46 40 43 3 7.5%
Total Contact Crimes ( Crimes Against the Person) 349 333 390 57 17.1%
Carjacking 4 1 3 2 200.0%
Robbery at residential premises 17 20 15 -5 -25.0%
Robbery at non-residential premises 17 7 11 4 57.1%
Robbery of cash in transit 0 1 0 -1 -100.0%
Bank robbery 0 0 0 0 0 Cases
Truck hijacking 0 0 0 0 0 Cases
Arson 5 8 5 -3 -37.5%
Malicious damage to property 58 41 41 0 0.0%
Contact-Related Crimes 63 49 46 -3 -6.1%
Burglary at non-residential premises 50 52 36 -16 -30.8%
Burglary at residential premises 150 153 121 -32 -20.9%
Theft of motor vehicle and motorcycle 4 3 3 0 0.0%
Theft out of or from motor vehicle 24 29 14 -15 -51.7%
Stock-theft 15 17 37 20 117.6%
Property-Related Crimes 243 254 211 -43 -16.9%
All theft not mentioned elsewhere 112 113 104 -9 -8.0%
Commercial crime 81 66 84 18 27.3%
Shoplifting 12 18 23 5 27.8%
Total Other Serious Crimes 205 197 211 14 7.1%
Total 17 Community Reported Crimes 860 833 858 25 3.0%
Illegal possession of firearms and ammunition 11 12 18 6 50.0%
Drug-related crime 17 28 30 2 7.1%
Driving under the influence of alcohol or drugs 47 79 65 -14 -17.7%
Sexual Offences detected as a result of police action 0 0 0 0 0.0%
CRIME DETECTED AS A RESULT OF POLICE ACTION
Crime CategoryApril 2016 to
March 2017
April 2017 to
March 2018
April 2018 to
March 2019
Comparison 2017/18 with
2018/19
CONTACT CRIMES ( CRIMES AGAINST THE PERSON)
SOME SUBCATEGORIES OF AGGRAVATED ROBBERY
CONTACT-RELATED CRIMES
PROPERTY-RELATED CRIMES
OTHER SERIOUS CRIMES
112
Table A3.4: Crime in Kokstad, 2016 to 2019
Source: SAPS, 2019
Case
Difference% Change
Murder 24 29 18 -11 -37.9%
Sexual Offences 46 65 74 9 13.8%
Attempted murder 14 15 10 -5 -33.3%
Assault with the intent to inflict grievous bodily harm 192 222 249 27 12.2%
Common assault 62 108 90 -18 -16.7%
Common robbery 41 33 33 0 0.0%
Robbery with aggravating circumstances 84 77 92 15 19.5%
Total Contact Crimes ( Crimes Against the Person) 463 549 566 17 3.1%
Carjacking 6 6 8 2 33.3%
Robbery at residential premises 16 14 15 1 7.1%
Robbery at non-residential premises 13 11 9 -2 -18.2%
Robbery of cash in transit 0 0 0 0 0 Cases
Bank robbery 0 0 0 0 0 Cases
Truck hijacking 0 0 1 1 1 Case Higher
Arson 3 3 6 3 100.0%
Malicious damage to property 80 76 86 10 13.2%
Contact-Related Crimes 83 79 92 13 16.5%
Burglary at non-residential premises 50 48 95 47 97.9%
Burglary at residential premises 338 328 373 45 13.7%
Theft of motor vehicle and motorcycle 22 18 24 6 33.3%
Theft out of or from motor vehicle 366 381 382 1 0.3%
Stock-theft 31 22 37 15 68.2%
Property-Related Crimes 807 797 911 114 14.3%
All theft not mentioned elsewhere 226 216 217 1 0.5%
Commercial crime 166 138 126 -12 -8.7%
Shoplifting 118 161 151 -10 -6.2%
Total Other Serious Crimes 510 515 494 -21 -4.1%
Total 17 Community Reported Crimes 1 863 1 940 2 063 123 6.3%
Illegal possession of firearms and ammunition 14 10 13 3 30.0%
Drug-related crime 189 227 235 8 3.5%
Driving under the influence of alcohol or drugs 49 98 197 99 101.0%
Sexual Offences detected as a result of police action 0 0 0 0 0.0%
Crime Detected As A Result Of Police Action 252 335 445 110 32.8%
CRIME DETECTED AS A RESULT OF POLICE ACTION
Crime CategoryApril 2016 to
March 2017
April 2017 to
March 2018
April 2018 to
March 2019
Comparison 2017/18 with
2018/19
CONTACT CRIMES ( CRIMES AGAINST THE PERSON)
SOME SUBCATEGORIES OF AGGRAVATED ROBBERY
CONTACT-RELATED CRIMES
PROPERTY-RELATED CRIMES
OTHER SERIOUS CRIMES
113
Table A3.5: Crime in KwaDukuza, 2016 to 2019
Source: SAPS, 2019
Case
Difference% Change
Murder 78 74 65 -9 -12.2%
Sexual Offences 161 180 166 -14 -7.8%
Attempted murder 85 77 100 23 29.9%
Assault with the intent to inflict grievous bodily harm 451 524 613 89 17.0%
Common assault 697 616 637 21 3.4%
Common robbery 115 99 105 6 6.1%
Robbery with aggravating circumstances 631 567 654 87 15.3%
Total Contact Crimes ( Crimes Against the Person) 2 218 2 137 2 340 203 9.5%
Carjacking 38 27 35 8 29.6%
Robbery at residential premises 138 91 137 46 50.5%
Robbery at non-residential premises 47 65 72 7 10.8%
Robbery of cash in transit 1 0 0 0 0 Cases
Bank robbery 0 0 0 0 0 Cases
Truck hijacking 0 0 0 0 0 Cases
Arson 7 11 7 -4 -36.4%
Malicious damage to property 366 354 360 6 1.7%
Contact-Related Crimes 373 365 367 2 0.5%
Burglary at non-residential premises 155 196 246 50 25.5%
Burglary at residential premises 986 832 906 74 8.9%
Theft of motor vehicle and motorcycle 97 105 95 -10 -9.5%
Theft out of or from motor vehicle 274 280 246 -34 -12.1%
Stock-theft 5 22 26 4 18.2%
Property-Related Crimes 1 517 1 435 1 519 84 5.9%
All theft not mentioned elsewhere 905 879 891 12 1.4%
Commercial crime 236 236 344 108 45.8%
Shoplifting 288 300 287 -13 -4.3%
Total Other Serious Crimes 1 429 1 415 1 522 107 7.6%
Total 17 Community Reported Crimes 5 537 5 352 5 748 396 7.4%
Illegal possession of firearms and ammunition 64 53 53 0 0.0%
Drug-related crime 1 201 1 413 854 -559 -39.6%
Driving under the influence of alcohol or drugs 171 111 98 -13 -11.7%
Sexual Offences detected as a result of police action 17 4 25 21 525.0%
Crime Detected As A Result Of Police Action 1 453 1 581 1 030 -551 -34.9%
CRIME DETECTED AS A RESULT OF POLICE ACTION
Crime CategoryApril 2016 to
March 2017
April 2017 to
March 2018
April 2018 to
March 2019
Comparison 2017/18 with
2018/19
CONTACT CRIMES ( CRIMES AGAINST THE PERSON)
SOME SUBCATEGORIES OF AGGRAVATED ROBBERY
CONTACT-RELATED CRIMES
PROPERTY-RELATED CRIMES
OTHER SERIOUS CRIMES
114
Table A3.6: Crime in Ladysmith, 2016 to 2019
Source: SAPS, 2019
Case
Difference% Change
Murder 42 40 46 6 15.0%
Sexual Offences 133 91 115 24 26.4%
Attempted murder 58 49 70 21 42.9%
Assault with the intent to inflict grievous bodily harm 392 359 400 41 11.4%
Common assault 559 574 671 97 16.9%
Common robbery 105 85 120 35 41.2%
Robbery with aggravating circumstances 309 235 287 52 22.1%
Total Contact Crimes ( Crimes Against the Person) 1 598 1 433 1 709 276 19.3%
Carjacking 11 12 8 -4 -33.3%
Robbery at residential premises 56 26 36 10 38.5%
Robbery at non-residential premises 38 36 34 -2 -5.6%
Robbery of cash in transit 0 0 0 0 0 Cases
Bank robbery 0 0 0 0 0 Cases
Truck hijacking 4 2 1 -1 -50.0%
Arson 5 8 5 -3 -37.5%
Malicious damage to property 211 184 274 90 48.9%
Contact-Related Crimes 216 192 279 87 45.3%
Burglary at non-residential premises 168 170 205 35 20.6%
Burglary at residential premises 429 441 458 17 3.9%
Theft of motor vehicle and motorcycle 59 35 35 0 0.0%
Theft out of or from motor vehicle 236 238 213 -25 -10.5%
Stock-theft 145 146 133 -13 -8.9%
Property-Related Crimes 1 037 1 030 1 044 14 1.4%
All theft not mentioned elsewhere 959 913 1 026 113 12.4%
Commercial crime 149 100 157 57 57.0%
Shoplifting 334 247 257 10 4.0%
Total Other Serious Crimes 1 442 1 260 1 440 180 14.3%
Total 17 Community Reported Crimes 4 293 3 915 4 472 557 14.2%
Illegal possession of firearms and ammunition 64 52 53 1 1.9%
Drug-related crime 170 130 91 -39 -30.0%
Driving under the influence of alcohol or drugs 345 205 183 -22 -10.7%
Sexual Offences detected as a result of police action 0 1 1 0 0.0%
Crime Detected As A Result Of Police Action 579 388 328 -60 -15.5%
CRIME DETECTED AS A RESULT OF POLICE ACTION
Crime CategoryApril 2016 to
March 2017
April 2017 to
March 2018
April 2018 to
March 2019
Comparison 2017/18 with
2018/19
CONTACT CRIMES ( CRIMES AGAINST THE PERSON)
SOME SUBCATEGORIES OF AGGRAVATED ROBBERY
CONTACT-RELATED CRIMES
PROPERTY-RELATED CRIMES
OTHER SERIOUS CRIMES
115
Table A3.7: Crime in Newcastle, 2016 to 2019
Source: SAPS, 2019
Case
Difference% Change
Murder 24 19 15 -4 -21.1%
Sexual Offences 47 48 49 1 2.1%
Attempted murder 25 31 29 -2 -6.5%
Assault with the intent to inflict grievous bodily harm 311 231 251 20 8.7%
Common assault 419 416 474 58 13.9%
Common robbery 101 101 131 30 29.7%
Robbery with aggravating circumstances 228 187 226 39 20.9%
Total Contact Crimes ( Crimes Against the Person) 1 155 1 033 1 175 142 13.7%
Carjacking 3 2 4 2 100.0%
Robbery at residential premises 24 22 16 -6 -27.3%
Robbery at non-residential premises 35 24 19 -5 -20.8%
Robbery of cash in transit 0 0 0 0 0 Cases
Bank robbery 0 0 0 0 0 Cases
Truck hijacking 0 1 0 -1 -100.0%
Arson 2 0 3 3 3 Cases Higher
Malicious damage to property 152 132 167 35 26.5%
Contact-Related Crimes 154 132 170 38 28.8%
Burglary at non-residential premises 237 165 215 50 30.3%
Burglary at residential premises 583 481 587 106 22.0%
Theft of motor vehicle and motorcycle 75 59 60 1 1.7%
Theft out of or from motor vehicle 395 287 359 72 25.1%
Stock-theft 57 61 69 8 13.1%
Property-Related Crimes 1 347 1 053 1 290 237 22.5%
All theft not mentioned elsewhere 755 733 798 65 8.9%
Commercial crime 453 526 503 -23 -4.4%
Shoplifting 296 324 258 -66 -20.4%
Total Other Serious Crimes 1 504 1 583 1 559 -24 -1.5%
Total 17 Community Reported Crimes 4 160 3 801 4 194 393 10.3%
Illegal possession of firearms and ammunition 13 20 9 -11 -55.0%
Drug-related crime 482 595 508 -87 -14.6%
Driving under the influence of alcohol or drugs 205 283 307 24 8.5%
Sexual Offences detected as a result of police action 1 0 0 0 0.0%
Crime Detected As A Result Of Police Action 701 898 824 -74 -8.2%
CRIME DETECTED AS A RESULT OF POLICE ACTION
Crime CategoryApril 2016 to
March 2017
April 2017 to
March 2018
April 2018 to
March 2019
Comparison 2017/18 with
2018/19
CONTACT CRIMES ( CRIMES AGAINST THE PERSON)
SOME SUBCATEGORIES OF AGGRAVATED ROBBERY
CONTACT-RELATED CRIMES
PROPERTY-RELATED CRIMES
OTHER SERIOUS CRIMES
116
Table A3.8: Crime in Pietermaritzburg, 2016 to 2019
Source: SAPS, 2019
Case
Difference% Change
Murder 30 41 44 3 7.3%
Sexual Offences 61 54 60 6 11.1%
Attempted murder 21 33 41 8 24.2%
Assault with the intent to inflict grievous bodily harm 181 183 203 20 10.9%
Common assault 358 357 360 3 0.8%
Common robbery 275 301 312 11 3.7%
Robbery with aggravating circumstances 486 457 427 -30 -6.6%
Total Contact Crimes ( Crimes Against the Person) 1 412 1 426 1 447 21 1.5%
Carjacking 41 20 23 3 15.0%
Robbery at residential premises 8 18 10 -8 -44.4%
Robbery at non-residential premises 42 37 35 -2 -5.4%
Robbery of cash in transit 1 0 0 0 0 Cases
Bank robbery 0 0 0 0 0 Cases
Truck hijacking 1 1 1 0 0.0%
Arson 3 1 1 0 0.0%
Malicious damage to property 168 174 158 -16 -9.2%
Contact-Related Crimes 171 175 159 -16 -9.1%
Burglary at non-residential premises 416 395 309 -86 -21.8%
Burglary at residential premises 158 128 162 34 26.6%
Theft of motor vehicle and motorcycle 90 114 132 18 15.8%
Theft out of or from motor vehicle 478 599 561 -38 -6.3%
Stock-theft 1 0 0 0 0 Cases
Property-Related Crimes 1 143 1 236 1 164 -72 -5.8%
All theft not mentioned elsewhere 1 022 1 011 1 148 137 13.6%
Commercial crime 480 360 477 117 32.5%
Shoplifting 742 531 579 48 9.0%
Total Other Serious Crimes 2 244 1 902 2 204 302 15.9%
Total 17 Community Reported Crimes 4 970 4 739 4 974 235 5.0%
Illegal possession of firearms and ammunition 45 38 46 8 21.1%
Drug-related crime 1 477 1 852 1 100 -752 -40.6%
Driving under the influence of alcohol or drugs 166 143 152 9 6.3%
Sexual Offences detected as a result of police action 876 523 303 -220 -42.1%
Crime Detected As A Result Of Police Action 2 564 2 556 1 601 -955 -37.4%
CRIME DETECTED AS A RESULT OF POLICE ACTION
Crime CategoryApril 2016 to
March 2017
April 2017 to
March 2018
April 2018 to
March 2019
Comparison 2017/18 with
2018/19
CONTACT CRIMES ( CRIMES AGAINST THE PERSON)
SOME SUBCATEGORIES OF AGGRAVATED ROBBERY
CONTACT-RELATED CRIMES
PROPERTY-RELATED CRIMES
OTHER SERIOUS CRIMES
117
Table A3.9: Crime in Port Shepstone, 2016 to 2019
Source: SAPS, 2019
Case
Difference% Change
Murder 33 49 48 -1 -2.0%
Sexual Offences 91 75 97 22 29.3%
Attempted murder 42 32 30 -2 -6.3%
Assault with the intent to inflict grievous bodily harm 271 287 354 67 23.3%
Common assault 334 337 318 -19 -5.6%
Common robbery 82 93 120 27 29.0%
Robbery with aggravating circumstances 174 200 159 -41 -20.5%
Total Contact Crimes ( Crimes Against the Person) 1 027 1 073 1 126 53 4.9%
Carjacking 11 7 5 -2 -28.6%
Robbery at residential premises 24 32 24 -8 -25.0%
Robbery at non-residential premises 24 41 39 -2 -4.9%
Robbery of cash in transit 0 0 0 0 0 Cases
Bank robbery 0 0 0 0 0 Cases
Truck hijacking 1 1 1 0 0.0%
Arson 6 3 8 5 166.7%
Malicious damage to property 80 110 122 12 10.9%
Contact-Related Crimes 86 113 130 17 15.0%
Burglary at non-residential premises 201 160 195 35 21.9%
Burglary at residential premises 602 602 588 -14 -2.3%
Theft of motor vehicle and motorcycle 67 62 39 -23 -37.1%
Theft out of or from motor vehicle 161 213 197 -16 -7.5%
Stock-theft 8 8 11 3 37.5%
Property-Related Crimes 1 039 1 045 1 030 -15 -1.4%
All theft not mentioned elsewhere 488 569 621 52 9.1%
Commercial crime 331 387 380 -7 -1.8%
Shoplifting 261 258 196 -62 -24.0%
Total Other Serious Crimes 1 080 1 214 1 197 -17 -1.4%
Total 17 Community Reported Crimes 3 232 3 445 3 483 38 1.1%
Illegal possession of firearms and ammunition 29 26 18 -8 -30.8%
Drug-related crime 537 605 406 -199 -32.9%
Driving under the influence of alcohol or drugs 235 283 301 18 6.4%
Sexual Offences detected as a result of police action 669 732 935 203 27.7%
Crime Detected As A Result Of Police Action 1 470 1 646 1 660 14 0.9%
CRIME DETECTED AS A RESULT OF POLICE ACTION
Crime CategoryApril 2016 to
March 2017
April 2017 to
March 2018
April 2018 to
March 2019
Comparison 2017/18 with
2018/19
CONTACT CRIMES ( CRIMES AGAINST THE PERSON)
SOME SUBCATEGORIES OF AGGRAVATED ROBBERY
CONTACT-RELATED CRIMES
PROPERTY-RELATED CRIMES
OTHER SERIOUS CRIMES
118
Table A3.10: Crime in Vryheid, 2016 to 2019
Source: SAPS, 2019
Case
Difference% Change
Murder 15 24 34 10 41.7%
Sexual Offences 60 87 65 -22 -25.3%
Attempted murder 11 18 26 8 44.4%
Assault with the intent to inflict grievous bodily harm 246 253 318 65 25.7%
Common assault 231 210 257 47 22.4%
Common robbery 94 96 82 -14 -14.6%
Robbery with aggravating circumstances 86 97 130 33 34.0%
Total Contact Crimes ( Crimes Against the Person) 743 785 912 127 16.2%
Carjacking 1 2 8 6 300.0%
Robbery at residential premises 7 21 19 -2 -9.5%
Robbery at non-residential premises 17 13 24 11 84.6%
Robbery of cash in transit 0 0 2 2 2 Cases Higher
Bank robbery 0 0 0 0 0 Cases
Truck hijacking 0 1 0 -1 -100.0%
Arson 0 1 4 3 300.0%
Malicious damage to property 123 101 133 32 31.7%
Contact-Related Crimes 123 102 137 35 34.3%
Burglary at non-residential premises 121 97 159 62 63.9%
Burglary at residential premises 345 335 350 15 4.5%
Theft of motor vehicle and motorcycle 42 29 31 2 6.9%
Theft out of or from motor vehicle 243 217 124 -93 -42.9%
Stock-theft 103 138 124 -14 -10.1%
Property-Related Crimes 854 816 788 -28 -3.4%
All theft not mentioned elsewhere 630 544 422 -122 -22.4%
Commercial crime 192 218 259 41 18.8%
Shoplifting 184 152 173 21 13.8%
Total Other Serious Crimes 1 006 914 854 -60 -6.6%
Total 17 Community Reported Crimes 2 726 2 617 2 691 74 2.8%
Illegal possession of firearms and ammunition 36 46 24 -22 -47.8%
Drug-related crime 256 422 258 -164 -38.9%
Driving under the influence of alcohol or drugs 162 215 210 -5 -2.3%
Sexual Offences detected as a result of police action 2 1 0 -1 -100.0%
Crime Detected As A Result Of Police Action 456 684 492 -192 -28.1%
SOME SUBCATEGORIES OF AGGRAVATED ROBBERY
CONTACT-RELATED CRIMES
PROPERTY-RELATED CRIMES
OTHER SERIOUS CRIMES
CRIME DETECTED AS A RESULT OF POLICE ACTION
CONTACT CRIMES ( CRIMES AGAINST THE PERSON)
Crime CategoryApril 2016 to
March 2017
April 2017 to
March 2018
April 2018 to
March 2019
Comparison 2017/18 with
2018/19
119
Figure A4.1: Percentage share of national real GDP by province, 2018
Source: IHS Markit, 2020
Table A4.1: Annual growth rates in KZN, 2017 to 2018
Source: IHS Markit, 2020
KZN Ethekwini Ugu uMgungundlovu Uthukela Umzinyathi Amajuba Zululand Umkhanyakude King Cetshwayo iLembe Harry Gwala
Agriculture and hunting -0.9 -1.6 -1.0 -0.5 -0.9 -0.6 -1.0 -1.7 -0.6 -0.5 -0.7 -0.2
Forestry and logging -9.1 -9.9 -9.2 -9.0 -9.5 -8.8 -9.6 -10.2 -8.9 -8.9 -9.5 -8.3
Fishing, operation of fish farms -1.0 -1.4 -1.1 -0.7 -0.5 -0.8 -0.7 -1.6 -0.2 -0.3 -0.7 -0.7
Mining of coal and lignite -5.5 -5.5 -5.5 -5.8 -5.6 -6.3 -5.3 -5.4 -5.4 -5.5 -5.4 -8.2
Mining of gold and uranium ore -27.6 -30.8 -26.6 -26.5 -26.6 -26.6 -26.6 -29.4 -26.7 -26.5 -26.6 -26.5
Mining of metal ores 8.6 8.7 8.6 8.5 8.8 0.4 8.8 8.4 8.7 8.8 8.7 6.6
Other mining and quarrying (incl 22) -17.1 -17.1 -17.1 -17.0 -17.1 -16.4 -17.1 -17.1 -17.1 -17.1 -17.1 -16.9
Food, beverages and tobacco
products4.8 4.5 5.2 5.5 4.7 5.4 5.1 4.2 5.6 5.5 5.5 6.2
Textiles, clothing and leather goods -2.8 -3.1 -2.3 -2.0 -2.1 -1.9 -2.3 -3.2 -2.0 -2.0 -2.5 -1.5
Wood and wood products -1.2 -1.6 -0.7 -0.6 -1.3 -0.2 -0.9 -1.8 -0.5 -0.7 -1.0 -0.3
Fuel, petroleum, chemical and rubber
products-1.0 -1.3 -0.5 -0.4 -0.1 -0.2 -0.5 -1.4 -0.2 -0.2 -0.6 0.5
Other non-metallic mineral products 2.2 1.9 2.3 3.0 2.7 2.6 2.6 1.4 3.2 3.0 2.7 3.4
Metal products, machinery and
household appliances0.6 0.1 0.8 1.1 1.2 0.7 0.8 -0.1 1.3 1.1 0.5 1.5
Electrical machinery and apparatus -7.7 -7.9 -7.5 -7.0 -7.0 -7.0 -7.3 -8.3 -6.9 -7.0 -7.3 -7.2
Electronic, sound/vision, medical &
other appliances-9.8 -9.9 -9.5 -9.0 -9.1 -9.3 -9.3 -10.6 -8.6 -9.0 -9.1 -8.6
Transport equipment 4.6 4.4 5.3 5.6 5.4 6.0 5.3 4.1 5.9 5.6 5.5 6.2
Furniture and other items NEC and
recycling2.3 2.1 2.6 3.1 3.0 3.0 2.8 1.8 3.2 3.1 2.8 3.2
Electricity, gas, steam and hot water
supply0.1 -0.8 -0.8 -0.9 10.2 -0.8 -0.7 -0.8 -0.8 -0.8 -0.8 -0.8
Collection, purification and distribution
of water1.7 1.3 2.0 2.2 2.2 2.0 2.0 1.6 1.7 2.4 2.0 2.3
Construction -1.2 -1.4 -1.1 -0.6 -0.7 -0.8 -0.8 -1.5 -0.6 -0.4 -0.6 -0.1
Wholesale and commission trade -1.8 -2.2 -1.5 -1.0 -1.3 -1.2 -1.2 -2.1 -0.9 -0.9 -1.0 -1.1
Retail trade and repairs of goods 2.7 2.4 2.9 3.4 3.2 3.3 3.1 2.3 3.3 3.4 3.2 3.7
Sale and repairs of motor vehicles,
sale of fuel-2.1 -2.4 -2.0 -1.5 -1.6 -1.4 -1.7 -2.8 -1.4 -1.4 -1.5 -1.5
Hotels and restaurants 2.9 2.6 3.0 3.5 3.2 3.6 3.3 2.4 3.6 3.7 3.6 3.5
Land and Water transport 1.5 1.2 1.7 2.1 2.1 1.9 1.8 0.8 2.2 2.2 1.9 2.7
Air transport and transport supporting
activities1.3 1.1 1.9 2.2 2.2 2.4 1.9 0.8 2.4 2.2 2.2 3.2
Post and telecommunication 3.0 2.7 3.3 3.8 3.7 3.7 3.5 2.5 3.8 3.8 3.7 4.1
Finance and Insurance 0.5 0.3 0.7 1.3 1.2 1.4 1.0 0.1 1.2 1.4 1.2 1.4
Real estate activities 2.8 2.9 2.6 3.6 0.9 0.3 2.0 -0.1 2.0 4.0 4.7 3.3
Other business activities 2.9 2.6 3.1 3.6 3.4 3.5 3.3 2.5 3.4 3.7 3.5 4.0
Public administration and defence
activities0.0 -0.4 0.1 0.6 0.5 0.4 0.3 -0.4 0.5 0.6 0.4 0.6
Education 1.1 0.8 1.3 1.7 1.5 1.4 1.4 0.8 1.6 1.7 1.5 2.0
Health and social work 1.9 1.6 2.1 2.6 2.4 2.3 2.3 1.6 2.3 2.6 2.4 2.7
Other service activities 3.1 2.9 3.2 3.8 3.5 3.6 3.5 2.5 3.6 3.8 3.6 4.0
120
Figure A5.1: Unemployment distribution by gender in KZN 2018
Source: IHS Markit, 2020 Figure A5.2: Districts’ unemployment distribution by gender in 2018
Source: IHS Markit, 2020
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
23.4 24.8
35.4
40.9
Unemployment Rate - official definition Unemployment Rate - expanded definition
Male Female Male Female
KwaZulu-Natal 23.4 24.8 35.4 40.9
eThekwini 13.9 15.3 21.5 26.6
Ugu 32.5 31.0 46.0 47.8
uMgungundlovu 17.0 16.8 28.8 31.9
uThukela 33.7 31.9 46.7 48.5
uMzinyathi 47.2 44.6 64.1 66.3
Amajuba 31.2 29.3 44.3 44.6
Zululand 43.1 43.3 58.5 62.0
uMkhanyakude 52.0 51.1 65.8 68.2
King Cetshwayo 23.8 25.4 37.7 43.5
iLembe 30.3 34.3 43.5 51.5
Harry Gwala 34.7 31.8 47.7 49.2
Unemployment Rate - official definition Unemployment Rate - extend definition
121
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