Martin Makoni, Bloemfontein
THE Free State provincial contribution to the South African economy declined by 0.7 percentage points from 5.9 to 5.2 percent between 1997 and 2012, Statistics South Africa (Stats SA) reported this week.
The province was only second to KwaZulu-Natal whose contribution eased 0.9 percentage points from 16.7 to 15.8 percent.
Limpopo province recorded the highest increase with 1.3 percentage points from 5.8 to 7.1 percent.
Gauteng was second with an increase of 1.0 percentage point from 33.7 to 34.7 percent.
The third quarter release of the gross domestic product (GDP) by Stats SA on Tuesday indicates that the country’s real GDP at market prices increased by a mere 0.7 percent quarter-on-quarter seasonally adjusted and annualised.
According to Stats SA, the largest contributors to the latest quarterly growth were mining and quarrying which added 0.6 percentage points to the 11.4 percent growth and finance, real estate and business services with 0.3 percentage points on the 1.3 percent rise.
The wholesale, retail and motor trade, catering and accommodation industry and the transport, storage and communication industry each contributed 0.2 percentage points to the growth of 1.3 and 2.6 percent respectively.
There was however a 6.6 percent negative growth in the manufacturing industry due to lower production in the motor vehicles, parts and accessories and other transport equipment divisions.
The unadjusted real GDP at market prices increased by 1.8 percent year-on-year.
Finance, real estate and business services increased by 3.9 percent while mining and quarrying industry increased by 2.7 percent, construction rose by 2.4 percent and transport, storage and communication industry 2.1 percent. Business in the agriculture, forestry and fishing industries decreased by 2.9 percent.
This saw the unadjusted real GDP at market prices for the first nine months of this year increase by 1.9 percent compared with the first nine months of last year.
South African Institute of Race Relations chief economist Ian Cruickshanks said in a statement this week that the below-average GDP growth rate of just 0.7 percent for the country in the third quarter of 2013 was a result of operating inefficiencies in the South African economy.
“Declining growth is due in part to protracted strikes and a decline in business and consumer confidence, leading in turn to shrinking fixed capital investment and retail spending,” he said.
Cruickshanks said over-indebted consumers have been disappointed by high inflation which has pushed up basic living costs.
The headline inflation rate for October was reported at 5.5 percent.
“There is also the spectre of very high unemployment, which will be worsened by recently introduced labour legislation,” he said.
“Continued labour unrest, while the global emerging markets sector recovery remains doubtful, will inhibit South Africa’s prospects for economic recovery.”
The South African economy is expected to grow by 1.9 percent this year.
Presenting the 2013/14 provincial adjustment budget speech, Free State treasury MEC Elzabe Rockman said growth projections for the province were likely to remain subdued over the next two years.
She said economic growth in the province was expected to decline from 1.6 percent in 2012 to 1.2 percent in 2013 and may improve to 2.6 percent next year.
“The provincial economic activity continues to be sustained mainly by the tertiary sector, which currently accounts for 67.7 percent,” she said.
Elzabe said vigorous efforts were required to reverse the declining contribution and stimulate growth of the primary and secondary economic sectors, which currently accounts for 17.3 percent and 15 percent of the provincial economy respectively.