Reasons to Invest in KwaZulu-Natal

Trading opportunities

Long, traditional ties have been developed with South Africa's top trading partners and other important focus markets, with double taxation agreements and memoranda of understanding signed with various countries. Growing increasingly important as a trading partner of the European Union, South Africa is additionally a full member of the World Trade Organisation, while strong political and economic links within the African continent and membership of the Southern African Development Community offer trading opportunities within southern Africa. Companies locating in South Africa not only have the opportunity to source their inputs at very competitive prices but often have a domestic market for their products and services. Investors can use South Africa and particularly KwaZulu-Natal with its excellent infrastructure and logistics mechanisms as a gateway to take products and services to the rest of Africa.

South Africa's increasing international presence has led to several trade agreements being negotiated with other countries. Facilitating the growth of the country's export markets, these favourable agreements have opened up innumerable opportunities for companies based here to increase their international trade:

The comprehensive US/Sacu free trade agreement is the second most significant trade relationship exercise after Agoa between the US and African countries, increasing the number of products that Sacu members can export to the US market. With a more balanced and equitable Sacu pact having already been signed by leaders of member states towards the end of 2002, the International Trade Administration Commission now oversees implementation of the Sacu agreement as well as other multilateral and bilateral trade agreements.

Exporting a range of products and services to a diversity of markets, South African trade has weathered adverse international conditions fairly well. With specific trade and investment requirements being met, the country has fast become one of the most popular trade destinations.

Some Investment Opportunities

Amajuba District Municipality

Amajuba District Municipality is situated within the north western corner of the KwaZulu-Natal. The district has abundant water, a reliable labour force, well developed transport infrastructure, first world educational, medical and community services, internationally-acclaimed tourism attractions, and an enviable lifestyle. It comprises of three local municipalities namely Newcastle, Dannhauser and Utrecht. The district’s economy was historically focused on coal mining but colliers have closed. The municipality is predominately urban and the largest concentration of people occurs in the Newcastle, Madadeni, Osizweni areas.

Amajuba District: Socio-Economic Profile

• Demographics
• The KwaZulu-Natal Province has both growing and maturing population, presenting opportunities and challenges to the province. According to Statistics South Africa mid-year estimates (2008), the KwaZulu Natal population was estimated at an average size of 10,1 million people. The largest number of these people lived in eThekwini Metro (32.8 percent of the provincial population), followed by uMgungundlovu (9.5%) and uThungulu district (9.3%).
• Amajuba district had an estimated total population of 486,8 thousand, accounting for 5.0 percent of the provincial population between 2002 and 2007 (Figure 5.1).


• Figure 5.2 shows the distribution of the population across DMs by age group. The largest proportion of the population in Amajuba district was the age group 15-64 years (61.0%) followed by age group 0-14 years (35,1%). The elderly population made the smallest portion of the total population.
  More potential work seekers translate into higher unemployment levels, particularly if individuals are not appropriately skilled. Hence, the higher number of both young individuals and people in the labour force overall will require more spending in education (primary and secondary) and skills development. The majority of the population across all DMs was female during this period (Figure 5.3).


• Economic Outlook

Gross domestic product per municipality (GDP-M)

• Between 2002 and 2006, the GDPR for KwaZulu-Natal was estimated at an annual average of R177, 8bn. There was significant growth of 18.8 percent from R163,9bn in 2002 to R194,7bn in 2006. Amajuba was the fifth largest contributor to the province’s GDP-R at 3.6 percent, after eThekwini (64.6%), uThungulu (9.5%), uMgungundlovu (8.5%), and Ugu (3.7%).


• Figure 5.5 shows Amajuba’s GDP-M by economic sector between 2002 and 2006. During this period the economy of the district grew by an annual average of 3.9 percent. Manufacturing, Community Services, and Finance were the main economic drivers in the district. These sectors contributed respective annual averages of 35.1 percent, 21.8 percent, and 14.0 percent to the district’s GDP-M.

• International Trade
• Figure 5.6 shows the percentage of exports, imports and trade balance (as a proportion of the districts’ GDP-M), between 2002 and 2006. The figure reveals that international trade has minimal impact on the economy of Amajuba. The district’s imports made up 2.3 percent of the district’s GDP-M and its exports were a mere 1.4 percent on average over the 5 year period. This resulted in a negative trade balance of R59,692 (or 0.9%).

• The Labour Market

The labour force and the economically active population

• Between 2002 and 2006, when the provincial labour force 1 approximated 6,0 million people per annum (approximately 60.0 percent of total provincial population), the economically active population (EAP)2 was approximately 3,1 million. More than 1,4 million of the province’s EAP was found in eThekwini, followed by UMgungundlovu (360,000) and uThungulu (221,000). Amajuba’s EAP size, estimated at 160,000, fell in the same range as Zululand, Uthukela and iLembe (Figure 5.7).

• 1 Labour force is population aged 15-64 years.
  2 The category EAP is made up of people who are either employed or unemployed. The employed consists of employers and employees, while unemployment are those not having a job but are actively seeking one (official definition), or they do not have a job, are actively seeking one or have given up searching yet still available for work at anytime (expanded definition).
  As a proportion of the district labour force3, however, the district’s EAP was estimated at 54.6 percent. At this rate, the district was the third most economically active after uMgungundlovu and the Metro. Amajuba’s participation rate was higher than the 52.5% provincial average.


• Unemployment
• During this period, there were about 76,000 unemployed people in the district; this was the fifth lowest level of unemployment in the province.

• The district’s unemployment rate45 was, however, relatively low at about 45.0 percent; higher only than that in eThekwini, and 0.1 percentage point below the provincial average (Figure 5.9).
  As with the other districts, Amajuba’s unemployment rate was skewed towards the Blacks (48.4%). The respective rates for Coloureds, Indians and Whites were 34.6, 19.6 and 10.7 percent. However, the Blacks’ unemployment rate was generally lower than the patterns observed in a majority of the previously discussed districts.
  3 EAP/LF = Labour participation rate or ratio.
  4 Unemployment rate is the ratio of the unemployed to the EAP
  5 Global Insight makes use of the expanded definition of unemployment, this includes those unemployed but not actively seeking a job
  
• Employment

Total employment

• During the period under review, KwaZulu-Natal employment totaled an annual average of 2,1 million workers. Amajuba’s employment level was the fifth highest in the province (Figure 5.10).

Formal employment

• The district’s formal employment was among the relatively lower levels at 64.4 percent of total employment (Figure 5.11). Manufacturing, Community Services and Household Services were the leading sectors in the district’s formal employment, together accounting for about 67.0 percent (Figure 5.12).

• Community Services, the second most important employer in the district, was dominated by Education, followed by Public Administration & Defense Activities (Figure 5.12). The leader, Manufacturing, recorded the highest employment in ‘Metal Products, machinery and household appliances’ followed by ‘Textiles, Clothing & Leather Products’ (Figure 5.13).


Informal employment

• KwaZulu-Natal’s informal sector employment, recorded mainly in Trade, Construction, Community Services, Manufacturing, Transport and Finance6 sectors, was generally skewed towards the Trade sector. This was true in all but four districts, each having at least half the employment in this sector involved in trade of some kind; Amajuba was on of the four peculiar districts whose informal trade employment was less than half the total informal employment (nearly 44.0%). The other important contributor to this district’s informal employment was ‘Manufacturing’; similar to Uthukela and iLembe, this unique complementary employer’s contribution was estimated at 25.1 percent (Figure 5.14). As mentioned earlier, ‘Manufacturing’ was skewed towards ‘Metal Products & household appliances’ and ‘Textiles’; the informal employment could probably have followed a similar pattern.

• Figure 5.15 shows the distribution of Amajuba’s formal employment in the Trade sector, the leading contributor to informal employment. The district’s formal employment in trade was inclined towards ‘Retail trade & repair of goods’ at nearly half the employment level. As assumed with ‘Manufacturing’, the informal trade employment could also have followed a similar trend with its formal counterpart.
  6 These are the sectors recorded by Global Insight; they are easier to monitor and collect data thereon than the remaining others.


Land Cover and Use

• In 2006, Amajuba’s share of the KwaZulu-Natal soil was 7.4 percent, the fourth smallest district in the province after eThekwini, iLembe and Ugu (Figure 5.16).

• However, similar to, or even worse than, the majority other districts, the district had the largest portion of its land unavailable for agricultural purposes, with 70.1 percent of the land being unimproved grassland, and only 11.7 percent cultivated temporarily (Figure 5.16).
  As in Uthukela, virtually no piece of land in Amajuba was used for permanent cultivation; this is a condition that needs to be investigated and corrected.


Crime

• Between 2002 and 2006, there was a consistent decline in reported incidences of crime in the province (2.4 percent annual average). UMkhanyakude, and uThungulu to a less extent, were the only district resistant to declining crime rates. However, 2003 forward saw a comprehensive decline, though with differing magnitudes; the provincial collapse rate in crime incidents was 5.1 percent. Amajuba was the one district that enjoyed the highest decline in crime rates at least 10.0 percent per annum (Figure 5.18).

• During the same period, 2002 to 2006, the most common crimes in this district were theft, burglary and assault. Similar to Sisonke and Uthukela, Amajuba had a unique experience of stock theft, and damage to property. These crime categories were, however, not as pronounced in this district as they were in the other two districts. But again, similar to Uthukela, Amajuba was one of the most notorious areas with crime rates as high as 780 incidences per 100,000 people (720 average 2003 to 2006) (Figure 5.19).


Development

• Figure 5.20 shows Amajuba district’s urbanisation and poverty rates, the Gini coefficient and the Human Development Index (HDI). It can be seen from this graph that, similar to what we have observed in all the other districts, the proportion of people living in poverty in the district has been on a decrease, and in this district more than anywhere else, the decrease was notably rapid (58.4% in 2002 to 52.8% 2006). The rate of urbanisation has also increased slowly from 56.0 percent in 2002 to 57.9 percent in 2006.
  As with all the other districts, there is a disquietingly widening income gap in the district (the Gini coefficient rose from 0.65 to 0.67).

• However, the overall human development in the districts has improved, with the index increasing from 0.55 to 0.56, an encouraging medium range performance.

• Although the Gini Coefficient in Amajuba widened between 2002 and 2006, Figure 5.21 shows that the income gap in the district Similar to Sisonke and Uthukela, Amajuba also had a wide income gap although moderately narrower, with 82.0 percent of the district’s households fell in the R72,000 group.

District Documents

• REPORT 2.1 - PSEDS District Profiling - Amajuba (Final for submission)
• Amajuba socio-economic profile

Contact Details

• MM: Mr Vusi Kubheka
  Private Bag X6615 Newcastle 2940
  B 9356 Madadeni 2951
  Tel: 034 329 7200
  Fax: 034 314 3785
  E-mail: vusik@amajuba.gov.za Website: www.amajuba.gov.za

Other Projects

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