There are only five formal jobs supporting every 100 people in rural areas, compared to 35 in the Gauteng metros and 29 in the coastal metros (Cape Town, eThekwini, Nelson Mandela Bay and Buffalo City).
This is according to a report published by Prof Ivan Turok and Dr Justin Visagie of the Human Sciences Research Council (HSRC), on Monday, titled: “Striking disparities in employment across South Africa: Evidence from a new spatial database.”
According to the report, the City of Cape Town grew its total employment by 20,2% between 2014-2023, ahead of Buffalo City (13,1%), Tshwane (12,6%), Mangaung (9,1%) and eThekwini (8,2%).
The City of Joburg grew by 1,9% and Ekurhuleni (1,6%).
The report has illustrated that metros have a more favourable and diverse economic structure than towns and rural areas.
Authors of the report said the poor performance of cities over the last decade, has dragged down the national economy, exposing spatial inequalities and labour market dynamics.
The report said cities have special sectors that stimulate growth. For example, Johannesburg is the country’s leading financial Centre due to its bigger contribution to the local economy.
Johannesburg has headquarters of most of the banks, pension funds and insurance companies, the Johannesburg Stock Exchange (JSE), Industrial Development Corporation (IDC) and Public Investment Corporation (PIC).
Many related business services are also clustered together in Johannesburg, including Information and Communication Technology (ICT), administrative services and professional services such as accountants and lawyers.
Ekurhuleni is South Africa’s largest manufacturing and logistics centre. Manufacturing is still the largest employer in that metro, with prominent industrial districts such as Germiston, Boksburg, Nigel and Springs. The transport sector plays an important support function, including airport-logistics in Kempton Park near OR Tambo International Airport, one of Africa’s busiest.
Cape Town’s economy is more diverse, with growing strengths in retail and tourism-related activities. Some of South Africa’s largest retailers have their headquarters in the city, including Shoprite, Pick n Pay, Woolworths, Foschini, Pep, Truworths and online vendor Takealot. Cape Town is also the country’s second largest centre for financial services.
eThekwini is a major manufacturing and logistics centre. The city has always been a leading location for a range of industrial activities. The Port of Durban has since become the anchor of the main logistics corridor to Gauteng, with intense movements of goods by road and rail for import and export.
Nelson Mandela Bay Metro is an important automotive centre. The city is best known for its automotive cluster, including foreign-owned vehicle manufacturers and related suppliers, such as Volkswagen, Ford, Goodyear, Bridgestone, Isuzu, Continental Tyre, Shatterprufe and, more recently, First Automotive Works (FAW) and Stellantis.
Buffalo City is best characterised as a centre of government services. It is the headquarters of the Eastern Cape provincial government and has the largest share of workers in government of any metro. The city also has some manufacturing capabilities in the automotive sector, including Mercedes-Benz, Daimler Chrysler and several upstream suppliers in the East London SEZ.
Mangaung is a centre of health and education services. It is the smallest metro and houses the headquarters of the Free State provincial government. A distinctive feature is the high concentration of jobs in healthcare and education. The city has a long history of education facilities (including two universities) and significant private health facilities (three private hospitals, many private day clinics and an increasing number of medical research institutions), as well as several public health facilities.
The third main source of employment growth is tradable services. Growth is this category has been less widespread than for other services and more focused on Cape Town, followed by modest growth in Johannesburg, Tshwane and eThekwini. Tradable services are more likely than non-tradables to spur generalised growth, as explained earlier.
Mayor of Cape Town, Geordin Hill-Lewis, said
“we’re encouraged to see Cape Town’s jobs growth outpacing other cities based on a new research report. This is no accident – it is built on the back of stable good governance and infrastructure investments far exceeding that of other cities. With growth, must come the opportunity to lift more people out of poverty and into employment over time. While there is plenty more to do, we are glad that in Cape Town the prospects of finding a job shine brighter than in any other city.”
The main sectors driving Cape Town’s jobs growth have been retail and wholesale services, call centres, security, finance and insurance.
In the third quarter of 2024, Statistics SA reported that Cape Town has SA’s lowest broad unemployment rate with 1,76m people employed.
Through an investment of R39,5bn in infrastructure over three years, the City plans to create 130 000 construction-related jobs alone, aside from the wider economic benefits of improved infrastructure.