Eastern Cape plans to build rural economy

The Eastern Cape government has put plans in place to advance the economic potential of the province’s underdeveloped rural regions, which will include a special economic zone (SEZ) in Mthatha.

The province’s Department of Economic Development, Environmental Affairs and Tourism has also introduced a project called the Small Towns Revitalisation Programme, which aims to target the most underdeveloped parts of the province in an effort to make them industrial hubs.

Ncedo Lisani, the department’s communications manager, said: “The Eastern Cape is a rural province and one of South Africa’s poorest. There is a huge backlog of bulk infrastructure, and limited or no access to villages or tourism products due to the bad state of the roads. There is also limited broadband infrastructure.

“With this in mind, the department has developed an integrated development plan for the region, including the Wild Coast, which ensures accelerated project development through the mobilisation of funding and technical support.”

One of the challenges the department or any potential developer faces is environmental sensitivity in parts of the province’s tourism drawcards. This means socioeconomic development has to be matched with environmental protection.

Lisani said the department had applied to the national department of trade and industry for permission to recognise and develop the Wild Coast as an SEZ, which will be located near Mthatha’s airport.


The Wild Coast SEZ is intended to address the underdevelopment of industry and agriculture in the region; the high unemployment levels, particularly among youngsters; and the unacceptably high levels of poverty outlined in a scoping report released in June.

“This region has massive tourism potential and can also become an agroprocessing hub. The development of the Wild Coast into an SEZ will no doubt unlock the region’s economic potential and exploit its tourism products,” he said.

The Presidential Infrastructure Coordinating Commission initiated a study to identify infrastructural gaps, population movements and the region’s economic potential.

Projects that would create jobs include the N2 Wild Coast toll highway, the expansion and redevelopment of Mthatha Airport, the bridge over the Mthatha River, the construction of the Nelson Mandela Legacy Bridge over the Mbashe River and the Umzimvubu Dam project, which includes a hydropower component.

The R113 million community-based initiative, which will see the establishment of six forestry projects in the Alfred Nzo and OR Tambo district municipalities, has created 1 100 jobs.

There are 4 000 hectares under forestry plantation and markets have been secured in the form of Sappi and PG Bison.

Funding was sourced from the Eastern Cape Development Corporation, the Development Bank of Southern Africa and the Eastern Cape Rural Development Agency.

About R10 million has been spent to set up agroprocessing enterprises in Butterworth, which will process wool and cashmere.

“Rural enterprise development hubs for maize milling have also been established in Mqanduli and Bizana,” said Lisani.

“The Eastern Cape has been ignored for a long time. As the department responsible for economic development, we are working with all relevant stakeholders to improve the lives of the rural folk.

“Roads and bridges are being built, and rural economic hubs being set up with the intention of upgrading the region, making it accessible and bettering the living standards of our rural people,” he said.

The R21 million Vulindlela Heights Industrial Park recently opened in Mthatha, and the community is benefiting from a 49% equity share as landowners in a R200 million, 110-bed hotel in the Mkambati Nature Reserve, which has also created 120 permanent jobs for the surrounding villagers.

The provincial Department of Economic Development, Environmental Affairs and Tourism said the Small Town Revitalisation Programme was another project that had been introduced to develop and upgrade small towns to make them economic centres.

Economists and local captains of industry have called on the Eastern Cape to diversify its economy and not rely so heavily on the car manufacturing industry.

Speaking in Port Elizabeth recently, political analyst Somadoda Fikeni said the Eastern Cape was sitting on a ticking time bomb as it was an economy that was almost solely dependent on the automotive industry.

“Agroprocessing and tourism are key in this province. We already have land lying fallow. We already have livestock roaming the streets. Pushing for a green revolution would be most profitable. This means focusing on agriculture, markets and the whole value chain,” said Fikeni.

Oscar Mabuyane, the MEC responsible for the department, this week said: “We need to come up with a model and ask National Treasury to consider giving us funds to specifically build infrastructure.”

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