Eastern Cape Economy

The Eastern Cape has great potential for the growth of existing industry and the establishment of new industry, this is because its economy is increasingly modern and export oriented. Its geographic location, quality sea and air ports, abundance of natural resources and world-class infrastructure bodes particularly well for the growth of export-oriented industry.

The Province is using innovative ways to draw rural people, who survive mostly on subsistence agriculture, migrant labour and welfare grants, into the mainstream economy. One of the most important of these interventions is the Provincial Growth and Development Plan (PGDP), formulated by the Provincial Government and its social partners in line with the national policy framework for socio-economic planning at provincial level.

The following sectors in the provincial economy is worth mentioning:

  • General government services - 28%
  • Real estate and business services industry - 17.9%
  • Manufacturing sector - 17.3%

Statistics South Africa figures show manufacturing in the Province grew by about 5% in 2006, compared to 4.2% in 2005. This has been attributed mostly to the Eastern Cape’s strong Automotive and Components Sector, but also to contributions from food processing, textiles and clothing, chemicals and machinery products. Construction activity, meanwhile, reflects both industrial growth and infrastructure investment – growth in construction in the Province was estimated to be 11.3% in 2006, 10.1% in 2005 and 8.8% in 2004.

Unemployment remains a challenge, but as the economy has grown, improvements have been evident. The Province created 152 000 formal jobs between 2004 and 2006, reducing unemployment from 32% to 22% (Labour Force Survey, March 2006).


The cities and sophisticated industrial areas of the Province are well served by infrastructure. Local government recognised that good roads, railways, ports and other infrastructure is a foundation for growth, and has thus invested in providing schools, clinics, roads, water and sanitation to rural areas.

Through the PGDP, the government’s Economic Growth and Infrastructure Cabinet and Cluster committees, and investments by state utility agencies such as Eskom, Telkom and Transnet, significant resources are going to: the Province’s two Industrial Development Zones (IDZs); to road and rail construction and refurbishment; and to developing the Ngquru Port at the Coega IDZ. All of this provides a sound basis for new private sector investment.

Import and export growth and potential has been boosted by public investment in the Port Elizabeth and East London ports. At Port Elizabeth, the port has expanded its car washing facilities, increased the capacity of its car terminal, and has seen its break-bulk terminal, which handles cargo such as wheat, project equipment, steel rails, coils, general cargo and cement, become the most profitable in the country. At East London, the port’s container stacking area has been allocated R20 million for an upgrade, and the R1.6 million resurfacing for the S&T berths is underway.

Other important projects include: the Kei Rail Corridor Project, between East London and Mthatha, which opens a vital transport link for new investors to the East London IDZ; and the planned N2 toll road from Durban to East London, which will open easier trade links out of and into the Province.


Air transport is of great importance in the Eastern Cape. Air infrastructure includes two national airports at Port Elizabeth and East London, an airport at Mthatha and 16 air strips in small towns and rural areas owned by municipalities or the private sector.


With 800 km of coastline, the Province offers an abundance of ocean-related possibilities. The ports of Port Elizabeth and East London are growing rapidly in line with South Africa’s strong performance as one of the fastest-growing exporters in the world. The Eastern Cape now has a third port, the new deep-water port of Ngqura, linked to the Coega IDZ 


Grid electricity provides 98% of South Africa’s commercial power requirements, with the same being true of the Province. Eskom, the national generation and supply company, sells electricity to residential, industrial and commercial consumers.


The Province has an extensive rail network of 3360 km and 450 stations, which is used for commuters, mainline passengers and freight. There are two main lines from Port Elizabeth and East London to Gauteng, and a series of branch lines.


The Eastern Cape has an extensive network of 55 088 km of roads servicing the large rural Province, of which only 5746 km are paved. Some 80% of the networks are district, minor and access roads intended to service rural areas.


Telecommunications has developed immensely in the Eastern Cape over the past 10 years with the introduction of mobile telephones, which have greatly increased telephone access in rural areas.

Water and Sanitation

The Province is rich in water resources, with many rivers running from the escarpment to the Indian Ocean. Many households in the former homeland areas, however, continue to have inadequate water and sanitation services. The quality of piped water in all parts of South Africa is among the best in the world.


The Eastern Cape is the only one of South Africa’s nine provinces to have all seven of its biomes, or ecological zones, within its boundaries. This gives it a tremendous diversity of climates, allowing for a vast range of activities.

Natural Resources

The Province is abundantly rich in natural resources, from grazing land to forests, marine life to rich farming soils, water to wilderness.

The Eastern Cape’s climate allows for the production of a wide variety of crops. Crops as diverse as pineapples, tea, tomatoes, citrus and chicory are successfully cultivated. Districts in the east of the Province hold some of the most fertile soil in the country.

Forestry is another thriving area of agriculture, with major commercial plantations established. This is the only province where forestry can be extended under the existing forestry permit system.

With its long coastline, fishing and fish farming are well-established industries. Game fishing and whale and great white shark watching are drawing increasing numbers of people through tourism.

The beauty of the Eastern Cape has also allowed for a growth in private game reserves and lodges in recent years. Because the Province boasts a malaria-free environment, it further attracts tourists who enjoy marvelling at the Big 7 i.e. whales, white sharks, and the Big 5.

* Information sourced from the Eastern Cape Development Corporationwww.ecdc.co.za ▪ *