The extended province of the Eastern Cape came into being in the year 1994 when the two homelands of the old Transkei and Ciskei were merged into one unit with the rest of the province. The Eastern Cape straddles two worlds, one of severe underdevelopment and one of a modern growing economy.

The economy of the province was historically largely dependent on the automotive sector with four large original automobile manufacturers namely, Volkswagen, Ford, DaimlerChrysler and General Motors all based in the Eastern Cape.  In the recent past, the economy of the Eastern Cape has experienced increased diversification into sectors such as manufacturing, infrastructure development and green industries.

Diversification

The diversification of the Eastern Cape economy is evidenced by the development of the East London and Coega Industrial Development Zones which remain amongst the flagship projects of the province. 

Completion of the construction of the Port of Ngqura, a deep water port northeast of Port Elizabeth is an indication that there is now, more than ever before, a commitment on the part of government to grow and mature the development of the Eastern Cape economy.

The green industry in the Eastern Cape has seen a number of renewable energy projects, in particular wind farms, in areas such as Port Elizabeth, Jeffery’s Bay, Tsitsikamma and Cookhouse to name a few.

Motor Industry

DaimlerChrysler is set to produce the successor generation of the Mercedes-Benz C-Class which translates to more than two and half thousand jobs remaining secure. General Motors diversified its interests during the apartheid years but has never left our shores and continues to employ approximately two thousand people. Volkswagen located in Uitenhage has been on our shores since 1946 and counts as one of the largest investments that have been made by Germany into our country and generations of our people have benefited from the investments made by these companies.

Transkei

The upgrade of the Mthatha airport and the N2 road is evidence that major infrastructure developments are also spreading to the former Transkei and this will have a positive impact on the economic activity of the former Transkei. The development of the R1.3 billion BT Ngebs mall by the Billion Group led by Mthatha’s very own son, Sisa Ngebulana is also a positive sign that private and corporate citizens of the province are not just waiting for hand-outs from government but are taking responsibility for the development of their own province. Billion Group is reported to have earmarked R16 billion worth of investment for the Eastern Cape province. The development of the BT Ngebs Mall is expected to create sustainable employment opportunities for the people of Mthatha and the surrounding areas and will also contribute to infrastructure development which has been one of the biggest challenges in Mthatha.
The future of the economy of the Eastern Cape looks bright.

Written by Malibuye Cossie, Associate and Ndumiso Dyantyi, Associate, Norton Rose Fulbright South Africa