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Economic development

The economy of the Berg River system is primarily driven by agriculture and agro-processing, tourism, light manufacturing industry and financial/business services, and has shown sustained growth in recent years. The secondary (manufacturing) and tertiary (services) sectors are spatially heavily skewed towards the Fransschoek-Drakenstein region and the Saldanha Bay region, and this is reflected in the intensity of energy use and the growth of settlements resulting from an influx of jobseekers. To illustrate this trend: the population of Drakenstein Local Municipality grew from 194,413 in 2001 to 251,262 in 2011.

However, the role of economic sectors varies widely within Local Municipalities: In Drakenstein, Swartland and Saldanha Bay, manufacturing is the largest sector (by contribution to local GDP) at more than 30%. On the other hand, agriculture/forestry/fishing is largest in Bergrivier and Witzenberg where it exceeds 50% of local GDP. It is interesting to note, however, that the best growth in recent years has been in the services sector, with tourism doing particularly well. While the contribution of agriculture at District Municipality level is not large (ca. 12-15% of GDP) in comparison to other sectors, it is much larger than the provincial average (5%) and provides many direct and indirect jobs in the rural areas. The Berg River catchment makes substantial contributions to the export offering of the Western Cape Province, in particular fresh fruit and wine, processed agricultural products including fish, and iron and steel. The local building sector is supported through the cement plant at Piketberg, and salt production takes place near Velddrif.

Left: Wine grape harvest in the Upper Berg River region. Source: www.excelsiorwine.blogspot.com
Right: PPC cement plant outside Piketberg. Source: www.panoramio.com

 

The main economic activities across the basin have significantly varying demands on natural resources and in particular on water. Agriculture accounts for around 60% of water use in the basin but this has been capped and further development of the sector will rely on shifts in the value chain. Additional water resources development will likely be allocated to people (settlements in the Berg catchment and the City of Cape Town), industrial economic growth (particularly along the West Coast), and the implementation of the ecological reserve (the water required to protect the aquatic ecosystems). The Department of Water Affairs is concerned that, in this water-stressed region, the projections for climate change indicate reductions in water from existing rainfed sources. This could start to impact on allocation decisions and development opportunities in the near future.

Lack of services in some informal settlements creates health hazards and pollution of downstream water sources. Source: www.idrc.ca

 

Provincial and regional economic development planning is guided by both national and provincial policies. The main focus is on job creation and the alleviation of poverty. Nevertheless, the local context within individual catchments also acts as a filter for what is feasible, given the mix of natural and human resource availability. In the case of the Berg River system, the proximity to the City of Cape Town and port facilities, and the extraordinary richness and sensitivity of ecosystems and the need to minimize further environmental degradation, are additional important influences.

The current drive is to increase exports across all sectors. Because of the current strength and comparative advantage of the food and beverages sector, this is an area ripe for development to its fullest potential. Opportunities exist for further value addition and novel products suited to the climate. 

Manufacturing growth is seen as very important since it can create jobs, especially within the West Coast Development Corridor and the ‘regional motor’ of Saldanha-Vredenburg. The proclamation of the Industrial Development Zone (IDZ) and Special Economic Zone (SEZ) in Saldanha is expected to help diversify and encourage the production of more sophisticated (higher value added) products.

Three potential industrial clusters for the IDZ were identified during the Feasibility Study: 

  • A Renewable Energy Production and Manufacturing Cluster,
  • An Oil Supply Base/Hub servicing the Oil and Gas Cluster and a Maritime Ship Building and Repair Cluster, and
  • A Steel and Minerals Production and Manufacturing Cluster

The iron ore terminal at Saldanha port. Source: www.ports.co.za

 

These development priorities may be spatially discreet, but further analysis shows that they are intimately inter-connected to the resources of the Berg River system. Therefore, there is a need to balance water/land/energy demand for the oil & gas industry, for agriculture and food security, and for urban needs.

Last but not least, there is wonderful potential for the development of tourism, and especially ecotourism, across the Berg River Catchment. This is seen by many as a sector which is “light” on resource demands and impacts.