ISBN JOE GQABI DISTRICT MUNICIPALITY DEVELOPMENT INDICATORS

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1 ISBN JOE GQABI DISTRICT MUNICIPALITY DEVELOPMENT INDICATORS JUNE 2012

2 FOREWORD This report contains development indicators for Joe Gqabi District for the period 2000 to Indicators are provided for economic growth and transformation, demographics, poverty and income, labour force, crime, infrastructure and services and health. The aim of the report is to provide upto date information than can be utilised by municipalities, government departments, consultants and others in driving socioeconomic planning and development in the regions of the Eastern Cape. The narrative report compares Joe Gqabi with the Eastern Cape and South Africa. Attached to the report are summary tables for the district, local municipalities and the Eastern Cape. These summary tables provide statistics at your fingertips for a range of indicators. The report was commissioned by ECSECC and developed by Quantec. Unless otherwise is stated, this report uses data from the Quantec database. The Quantec database utilises the 2006 election demarcation boundaries. Any data queries can be directed to ECSECC. The metadata documents referred to in this report can be found on You can also find reports for all district municipalities, metropolitan municipalities and a provincial report for the Eastern Cape on ECSECC s website Summary tables are also available for all local municipalities in the Eastern Cape. JOE GQABI DISTRICT DEVELOPMENT REPORT

3 CONTENTS JOE GQABI GEOGRAPHY 2 INTRODUCTION 3 DEVELOPMENT GOALS 4 ECONOMIC GROWTH AND TRANSFORMATION 5 REGIONAL GROSS DOMESTIC PRODUCT (GDPR) 6 GROSS VALUE ADDED (GVA) 7 GROSS OPERATING SURPLUS (GOS) 8 TOTAL OUTPUT 9 INTERMEDIATE CONSUMPTION EXPENDITURE 10 TRESS INDEX 11 DEMOGRAPHICS 12 POPULATION 13 HOUSEHOLDS 14 POVERTY 15 HUMAN DEVELOPMENT INDEX (HDI) 16 GINI COEFFICIENT 17 PEOPLE IN POVERTY 18 POVERTY GAP 19 EDUCATION 20 DISPOSABLE INCOME 21 LABOUR FORCE 22 LABOUR FORCE 23 UNEMPLOYMENT 24 EMPLOYMENT 25 CRIME 26 MURDER 27 SEXUAL CRIMES 27 COMMON ROBBERY 28 AGGRAVATED ROBBERY 28 DRIVING UNDER THE INFLUENCE OF ALCOHOL 29 DRUGRELATED CRIMES 29 INFRASTRUCTURE AND SERVICES 30 WATER 31 SANITATION 32 REFUSE 33 LIGHTING 34 HOUSING 35 TELEPHONE 36 HEALTH 37 HIV/AIDS 38 TUBERCULOSIS (TB) 39 PAGE 1

4 GEOGRAPHY JOE GQABI EASTERN CAPE: DISTRICT COUNCILS JOE GQABI : MAIN PLACES PAGE 2

5 INTRODUCTION JOE GQABI The Joe Gqabi district borders the Free State Province and the country of Lesotho to the north, the district municipalities of Alfred Nzo, OR Tambo and Chris Hani to the east and south and the Northern Cape Province to the west. The boundary of the district is an administrative boundary and not necessarily an economic boundary. The west of the district (Gariep and Maletswai) is dry Karoo flatland and areas of the dry NamaKaroo biome. The east (Senqu and Elundini) is mountainous and wetter with elements of the Maloti biome. Most of the district falls within the Orange River catchment basin, except for Elundini, which falls in the Mzimvubu River Basin. The Joe Gqabi District Municipality is very sparsely populated (about 6 people per km2). The economy of the Joe Gqabi district is relatively small, contributing only 3,5% to the Eastern Cape economy. The economic performance of the Joe Gqabi district has been satisfactory over the past decade or so. The average annual growth rate from 2000 to 2010 was 3.6%. The recession had a marginal effect on overall performance and growth rates dropped by 0.5%, as opposed to a national average of 1.5% and a provincial average of 1%. However, the recovery has been slower. In 2010 the growth rate was only 2.3% in comparison with a South African and an Eastern Cape average annual growth rate of 2.8% and 2.3% respectively. The population s quality of life is deteriorating as measured by the Human Development Index (HDI). This is largely because life expectancy is lower as a result of the HIV/AIDS pandemic. Nevertheless, the Joe Gqabi district s HDI is higher than the provincial average but less than that of South Africa. Using the Gini coefficient, inequality in South Africa improved marginally from in 2007 to in The Eastern Cape, however, has become more unequal with Gini coefficients of in 2007 and in The Gini coefficient for the district was 0.62 in 2008 and 0.61 in 2010 indicating a moderate improvement. Nevertheless equity remains a problem. Although the district s poverty rate is lower than the provincial average, it is relatively high, with an estimated 170,000 people living in poverty. The economy of the Joe Gqabi District Municipality is relatively small and there is evidence of above average economic growth in recent years. Its GDP per capita is higher than the provincial average. The tertiary sector is the largest contributor to the municipality's economy. The illiteracy rate in the Joe Gqabi district is relatively high with over 21.7% of the population being functionally illiterate. The number of people aged 15 years or older without any schooling is a matter for concern, although the number has fortunately been coming down. In 1995 more than 41,000 adults had not received any schooling, but this figure dropped to just over 28,000 in This represents 8.6% of the population as opposed to 12.4% in This 8.6% is higher than the figure for the Eastern Cape which stands at 7.2% and also higher than South Africa s at 6.3%. The number of economically active people in Joe Gqabi in 2009 was 78,000, representing 24% of the region s population. The corresponding figures for the Eastern Cape and South Africa are 27% and 33% respectively. In % of the population were economically active. The LFPR has been falling and is lower for the Joe Gqabi district at 32% than South Africa at 52%, which in turn is higher than the Eastern Cape at 44%. The unemployment rate in 2010 was 25%. Crime in Joe Gqabi has generally been on a downward trend since The unweighted decline for total serious crimes has been 1.3% pa since In comparison, the decline for South Africa was an average of 2.5% pa and 3% pa for the Eastern Cape. The South African Constitution states that municipalities have the responsibility to make sure that all citizens are provided with services to satisfy their basic needs. Improving access to services has a crucial role to play in alleviating poverty, improving health and wellbeing and ensuring the dignity of people. The term services broadly refers to infrastructure, in particular, civil and electrical engineering infrastructure. The Eastern Cape lags behind the South African average with 24% of the population enjoying piped water and 17% having piped water inside their yards. Almost a quarter relies on dams, rivers, streams, or springs, while only 8,000 rely on a watercarrier, tanker or water vendor for their water requirements. Although the number of households having water piped into their dwelling or yard has increased since 1995, 38% still have to get their water from a community stand and a further 29% rely on a natural water supply. In Joe Gqabi the proportion of households with access to electricity is less than in the Eastern Cape as a whole. The proportion increased from just over onethird in 1995 to 60% in The number of households that rely on paraffin has halved from 27 to 14%. PAGE 3

6 DEVELOPMENT GOALS The development goals for the Eastern Cape and its subregions are as follows: Economic growth rate of 58% per annum. Half unemployment rate by % reduction in the number of households living below the poverty line and proportion of people suffering from hunger by Food selfsufficiency in the Province by Universal education by 2014, with all children progressing to the first exit point in a secondary education. Improve literacy rate by 50% by Clean water for all by Elimination of sanitation backlogs by Eliminate gender disparity in education and employment by Reduce by twothirds the underfive mortality rate and threequarters the maternal mortality rate by To halt and reverse the spread of HIV and AIDS, and TB by PAGE 4

7 ECONOMIC GROWTH AND TRANSFORMATION Economic development in the wake of the global crisis remains sluggish, with continued job losses plaguing the recovery. Concerted, coordinated efforts should be undertaken to expand productive sectors and to improve competitiveness in the Eastern Cape. Economic sectors currently targeted for primary attention by the South African and Eastern Cape governments and local governments are those that have been consistently identified in the Industrial Policy Action Plan 2 (IPAP2), the New Growth Path and the Provincial Industrial Development Policy (PIDS) as exhibiting high labour absorption potential, potential to address rural development, high growth potential and/or contribute to climate change mitigation or adaptation. The Provincial Industrial Development Strategy presents the Eastern Cape framework and broad approach to industrialisation. PIDS sets out deliberate government efforts to alter the structure and distribution of industrial activity to promote economic growth and development. Its vision is a stateled industrialisation path towards a robust, resilient and sustainable industrial base by The strategic imperatives of the PIDS are economic growth, labour absorption and job retention. The prioritised sectors for the Eastern Cape are: Automotive; Agroprocessing; Capital goods; Green economy; Petrochemicals; and, Tourism. Within the framework of Provincial Industrial Development Strategy, New Growth Path and IPAP2 district and local municipalities identify priority sectors based on comparative and competitive advantage, available natural resources. These sectors and priority projects are outlined in the Integrated Development Plan and Local Economic Development strategy of all municipalities. This section outlines key indicators for economic growth and transformation in the district. PAGE 5

8 GDPR per Capita (R, 2005 prices) GDPR as percentage of EC (%) GDPR (Rm, 2005 prices) ECONOMIC GROWTH AND TRANSFORMATION REGIONAL GROSS DOMESTIC PRODUCT (GDPR) REGIONAL GROSS DOMESTIC PRODUCT (GDPR) The economy of the Joe Gqabi District Municipality is relatively small, contributing only 0.3% of the South African economy and 3.6% to the Eastern Cape economy GDPR % CHANGE IN GDPR (Y/Y) The performance of the district has been satisfactory over the past decade or so, with an average annual growth rate from 2000 to 2010 of 5.2%. The recession had a marginal effect overall performance and growth rates grew by 2%, as opposed to a national average of 1.5% and a provincial average of 1%. However, the recovery has been slower. In 2010 the growth rate was only 2.3% compared with a South African and an Eastern Cape annual average growth rate of 2.8 and 2.3% respectively. The tertiary sector is the largest contributor to the municipality's economy, with a contribution of 80%. This is followed by the secondary sector (14.9%) and the primary sector (5.1%) REGIONAL GROSS DOMESTIC PRODUCT (GDPR) GDPR PER CAPITA DISTRIBUTION OF GDPR GDPR (Rm, 2005 prices) GDPR per Capita (R, 2005 prices) GDPR as % of Eastern Cape (%) Market value of all final goods and services produced within a region in a given period of time. Real GDPR is the nominal GDP adjusted for inflation. Quantec*; StatsSA GDPR is calculated using the national ratio of gross value added to GDP at market prices and gross value added (GVA) for each location. Distribution variable is calculated using variable as a percentage of the provincial total for the variable in question. *Please consult the attached metadata documents. PAGE 6

9 GVA (Rm, 2005) prices) GVA as percentage of EC (%) ECONOMIC GROWTH AND TRANSFORMATION GROSS VALUE ADDED (GVA) GROSS VALUE ADDED (GVA) GVA % CHANGE IN GVA (Y/Y) DISTRIBUTION OF GVA Gross value added (GVA) measures the contribution to the economy of each individual producer, industry or sector in a region. It is used in the estimation of gross domestic product (GDP). GVA = GDP taxes on products + subsidies on products The tertiary sector is dominated by general government (20.3%) and community, social and personal services (11.4%). Both these sectors rely on government spending in the area. The general government sector has grown an average of 3.6% since Government services contribute 8.3% to the sector in the Eastern Cape and almost 1% to the sector in South Africa. Community services have exhibited a strong growth since 1995 at 4.7% average annual growth, while business services contribute 11.4% to the Joe Gqabi district s economy GROSS VALUE ADDED (GVA) PER SECTOR (2010) General government Community, social and personal services Finance, insurance, real estate and business services Transport, storage and communication Wholesale and retail trade, catering and accommodation Construction Electricity, gas and water Manufacturing Mining and quarrying Agriculture, forestry and fishing Rm, 2005 prices GVA (Rm, 2005 prices) GVA as % of Eastern Cape (%) Gross value added (GVA) for a region includes the compensation of employees, the net operating surplus, the consumption of fixed capital (gross value added at fixed costs), other taxes on production less other subsidies on production (gross value added at basic prices) in that region. SIC refers to the Standard Industrial Classification all Economic Activities, is based upon the latest (third revision which appeared in 1990) International Standard Industrial Classification of all Economic Activities (ISIC) with suitable adaptations for local conditions and is published by StatsSA. Quantec*; StatsSA Distribution variable is calculated using variable as a percentage of the provincial total for the variable in question. *Please consult the attached metadata documents. PAGE 7

10 GOS (Rm, 2005 prices) GOS as percentage of EC (%) GOS (Rm, 2005 prices) ECONOMIC GROWTH AND TRANSFORMATION GROSS OPERATING SURPLUS (GOS) GROSS OPERATING SURPLUS (GOS) GOS % CHANGE IN GOS (Y/Y) GROSS OPERATING SURPLUS (GOS) Profits are an important economic measure in that they reflect the extent towhich firms are sustainable in the long term. If firms are relatively more profitable in one country or region than others in the long run, new firms will then tend to relocate or establish themselves in that area. Gross operating surplus (GOS) is the surplus generated by an enterprise s operations and activities after the labour factor input has been recompensed. Although GOS is not exactly the same as profits, it is used as a proxy and is useful in trend and crosssectional analysis. It does not, however, take factors such as depreciation or tax into account. The GOS of the Joe Gqabi district was R2.2 billion in 2010, contributing just over 0.3% of South Africa s GOS and 3.6% of the Eastern Cape s. The three sectors that contribute the most to the Joe Gqabi district s GOS are: Finance and insurance [SIC: 8182] Wholesale and retail trade [SIC: 6162] Business services [SIC: 83] Agriculture is also important and contributes 8.2% of the Eastern Cape economy. The finance and insurance sector was the fastest growing sector, exhibiting an average growth of 23.6% between 2005 and GOS DISTRIBUTION OF GOS GOS (Rm, 2005 prices) GOS as % of Eastern Cape (%) Gross operating surplus (GOS) is the income received by factors of production in the economy, i.e. rent, interest and profit by those who owns the production factors, taking into account the value of the consumption of fixed capital. SIC refers to the Standard Industrial Classification of all Economic Activities, is based upon the latest (third revision which appeared in 1990) International Standard Industrial Classification of all Economic Activities (ISIC) with suitable adaptations for local conditions and is published by StatsSA. Quantec* Distribution variable is calculated using variable as a percentage of the provincial total for the variable in question. *Please consult the attached metadata documents. PAGE 8

11 Output (Rm, 2005 prices) Output as a percentage of EC (%) Output (Rm, 2005 prices) ECONOMIC GROWTH AND TRANSFORMATION TOTAL OUTPUT OUTPUT OUTPUT TOTAL OUTPUT % CHANGE IN OUTPUT (Y/Y) TOTAL OUTPUT DISTRIBUTION OF OUTPUT Total output includes products used as intermediaries, exports and products and services destined for final demand. Output has been increasing steadily since 2000, even during 2009 when the global recession had an impact on the South African economy. The Joe Gqabi district s share of the Eastern Cape s total output has remained stable at just over 7%. The sectors with the largest output are: General government [SIC: 91, 94] Business services [SIC: 83] Community, social and personal services [SIC: 92, 956] Food, beverages and tobacco [SIC: ] Wholesale and retail trade [SIC: 6162] In the Eastern Cape the sectors with the largest output are general government [SIC: 91, 94]; wholesale and retail trade [SIC: 6162]; finance and insurance services [8182]; business services [SIC: 83]; and community, social and personal services [SIC: 92, 956]. The sectors with the largest share of South Africa s output are transport equipment [SIC: ]; community, social and personal services [SIC: 92, 956]; electrical machinery and apparatus [SIC: ]; general government [SIC: 91, 94]; other nonmetal mineral products 342]; food, beverages and tobacco [SIC: ]; textiles, clothing and leather goods [SIC: ]; and furniture and other manufacturing [SIC: ] Output (Rm, 2005 prices) Output as % of Eastern Cape (%) Total output of goods and services produced by a region, at basic prices. SIC refers to the Standard Industrial Classification of all Economic Activities, is based upon the latest (third revision which appeared in 1990) International Standard Industrial Classification of all Economic Activities (ISIC) with suitable adaptations for local conditions and is published by StatsSA. Quantec*; StatsSA Distribution variable is calculated using variable as a percentage of the provincial total for the variable in question. *Please consult the attached metadata documents. PAGE 9

12 intermediate consumption (Rm, 2005 prices) Intermediate consumption as a percentage of EC (%) intermediate consumption (Rm, 2005 prices) ECONOMIC GROWTH AND TRANSFORMATION INTERMEDIATE CONSUMPTION EXPENDITURE INTERMEDIATE CONSUMPTION EXPENDITURE Intermediate consumption expenditure includes the inputs used to produce final goods and services. INT. CONSUMPTION % CHANGE IN INT. CONSUMPTION (Y/Y) The sectors with the largest intermediate consumption expenditure include: General government [SIC: 91, 94] Food, beverages and tobacco [SIC: ] Business services [SIC: 83] Construction [SIC: 5153] Community, social and personal services [SIC: 92, 956] In the Eastern Cape the sectors with the largest intermediate consumption expenditure are transport equipment [SIC: ]; general government [SIC: 91, 94]; food, beverages and tobacco [SIC: ]; community, social and personal services [SIC: 92, 956]; wholesale and retail trade [SIC: 6162]; business services [SIC: 83]; finance and insurance [SIC: 8182]; and petroleum products, chemicals, rubber and plastic [SIC: ]. The sectors with the largest share of South Africa s intermediate consumption expenditure (per sector) include transport equipment [SIC: ]; community, social and personal services [SIC: 92, 956]; electrical machinery and apparatus [SIC: ]; general government [SIC: 91, 94]; food, beverages and tobacco [SIC: ]; textiles, clothing and leather goods [SIC: ]; and other nonmetal mineral products [SIC: ]. INTERMEDIATE CONSUMPTION EXPENDITURE INT. CONSUMPTION DISTRIBUTION OF INT. CONSUMPTION Int. consumption expenditure (Rm, 2005 prices) Int. consumption expenditure as % of the Eastern Cape (%) Intermediate consumption expenditure represents the value of goods and services that the producer purchases in order to produce other goods and services. SIC refers to the Standard Industrial Classification of all Economic Activities, is based upon the latest (third revision which appeared in 1990) International Standard Industrial Classification of all Economic Activities (ISIC) with suitable adaptations for local conditions and is published by StatsSA. Quantec*; StatsSA Distribution variable is calculated using variable as a percentage of the provincial total for the variable in question. *Please consult the attached metadata documents. PAGE 10

13 Tress Index for 23 industries ECONOMIC GROWTH AND TRANSFORMATION TRESS INDEX 8 TRESS TRESS INDEX % CHANGE IN TRESS (Y/Y) 0.40 The sectoral composition of economic activity in a region is a good indication of the level of diversification or concentration of a region s economy and can be measured by the socalled tress index. A tress index of zero represents a totally diversified economy. On the other hand, the higher the index (closer to 100), the more concentrated or vulnerable the region s economy to exogenous variables, such as adverse climatic conditions, commodity price fluctuations, and so forth The tress index for Joe Gqabi is 76.4 compared to 71.2 for the Eastern Cape and 66.1 for South Africa. Given that the structure of the economy changes very slowly, the tress index is fairly stable over time. However, the economy has marginally diversified since 1995 when the tress index was INDUSTRY COMPOSITION BY SECTOR (2010) General government Community, social and personal services Finance, insurance, real estate and business services Transport, storage and communication Wholesale and retail trade, catering and accommodation Construction Electricity, gas and water Manufacturing Mining and quarrying Agriculture, forestry and fishing Rm, 2005 prices Tress Index for 23 industries Tress Index for 10 industries The level of diversification or concentration of a region s economy is measured by a Tress index. A Tress index of zero represents a totally diversified economy. On the other hand, the higher the index (closer to 100), the more concentrated or vulnerable the region s economy to exogenous variables, such as adverse climatic conditions, commodity price fluctuations, etc. Quantec* Distribution variable is calculated using variable as a percentage of the provincial total for the variable in question. *Please consult the attached metadata documents. PAGE 11

14 DEMOGRAPHICS Demographics are about the population of a region and the culture of the people there. Demographic shifts tell us about the shifting composition of a region s population. Demographic information allows us to plan for the future, allocate scarce resources and monitor the impact of policy, political and economic changes in society. PAGE 12

15 Age group (years) Number of people DEMOGRAPHICS POPULATION POPULATION In 2010 there were an estimated 824,383 people in the Joe Gqabi district POP % CHANGE IN POP (Y/Y) 0.50 The racial composition of the Joe Gqabi district is as follows: Black 93.3% Coloured 4.0% Asian 0.1% White 2.5% The Joe Gqabi district s population has been in decline since The annual rate of population growth since 2005 has been about 1.0%, which is far below the national and provincial averages From 2005 to 2010, the population groups grew at the following annual average: Black 1.1% Coloured 1.0% Asian 6.3% White 2.0% The Joe Gqabi district is relatively sparsely populated with only 13 people per km2 compared to South with 41 people per km2 and the Eastern Cape with 40 people per km2. POPULATION BY AGE AND GENDER FEMALE 2000 MALE 2000 FEMALE 2010 MALE Population Population as % of Eastern Cape (%) Population density The population includes all inhabitants (both South African citizens and foreigners) of all races, gender and ages. Quantec*; StatsSA Distribution variable is calculated using variable as a percentage of the provincial total for the variable in question. *Please consult the attached metadata documents. PAGE 13

16 Number of households DEMOGRAPHICS HOUSEHOLDS NUMBER OF HOUSEHOLDS In 2010 there were an estimated households in the Joe Gqabi district. This represents 0.8% of the South African households and 5.7% of those in the Eastern Cape HH % CHANGE IN HH (Y/Y) HHDIST The racial composition of households of the Joe Gqabi district is as follows: Black 94.1% Coloured 2.9% Asian 0.1% White 2.9% Since 2005 the number of households in the Joe Gqabi district has declined marginally ( 0.3%), while the number of households in South Africa as a whole has increased by an annual average rate of 1% per annum and 1.2% in the Eastern Cape. From 2005 to 2010 households grew at the following annual average: Black 1.3% Coloured 0.2% Asian 6.3% White 2.9% Currently, the trend is towards fewer people per household. DISTRIBUTION OF HOUSEHOLDS (2010) White households Asian households Coloured households Black households Number of households Households Households as % of Eastern Cape (%) A person, or group of persons, who occupy a common dwelling unit (or part of it) at least four days a week on average. They live together and share resources as a unit. Quantec*; StatsSA Distribution variable is calculated using variable as a percentage of the provincial total for the variable in question. *Please consult the attached metadata documents. PAGE 14

17 POVERTY AND INCOME Poverty in the Eastern Cape remains widespread and deep. Due to South Africa s Apartheid history poverty is intergenerational and structural. The South African and Eastern Cape governments have undertaken a series of programmes to address poverty and have been achieving successful mainstreaming of antipoverty initiatives into the planning and implementation of government programmes and in the budgeting process. However, government programmes implemented since 1994 have not yielded the desired impact in eradicating poverty. The notable exception to this is the availability of social security grants. In the Eastern Cape, the number of people living on less than a dollar a day is largely eradicated due to comprehensive social security programmes. In May 2012 the Eastern Cape government adopted an antipoverty strategy. The strategic goals of the strategy are to: Eradicate extreme poverty and hunger; Promote sustainable community livelihoods and self reliant households; and, Ensure well targeted, joinedup implementation and service delivery by government and its social partners. PAGE 15

18 HDI POVERTY AND INCOME HUMAN DEVELOPMENT INDEX (HDI) HUMAN DEVELOPMENT INDEX (HDI) HDI The Human Development Index (HDI) is a comparative measure of health, education and income, measured in terms of life expectancy, literacy and level of education, and GDP per capita, respectively. It is a standard means of measuring living standards. Although the index has also been described as "redundant" and a "reinvention of the wheel", measuring aspects of development that have already been exhaustively studied, it is useful for measuring progress over time and the impact of economic policies on quality of life. In South Africa the HDI has dropped from in 1995 to in 2010, although the index has been fairly constant for the past few years. The HDI for the Eastern Cape has been lower than South Africa s HDI since 1995 and has dropped from (1995) to (2010). The trend for the past five years has been downward, largely because of the lower life expectancy resulting from the HIV/AIDS pandemic. In 2010 the district s HDI was 0.50 which was lower than the provincial HDI but lower than South Africa s HDI The Human Development Index (HDI) is a comparative measure of health, education and income, measured in terms of life expectancy, literacy and level of education, and GDP per capita, respectively. It is a standard means of measuring living standards. Quantec*; StatsSA It is important to note that the UNDP publishes an annual development report with its own HDI figures. Unfortunately the methodology changes making comparisons difficult. The latest UNDP report (2011) lists South Africa with an HDI of and ranks it 123 in the world. The HDI presented above should therefore not be compared to the UNDP's HDI. PAGE 16

19 Gini coefficient POVERTY AND INCOME GINI COEFFICIENT GINI COEFFICIENT GINI COEFFICIENT Poverty and inequality remain major challenges for the Joe Gqabi district, the Eastern Cape and South Africa alike. The Gini coefficient is merely an indicator of how equally income (or poverty) is distributed, as countries that have identical Gini coefficients can differ greatly in terms of income and quality of life. The Gini coefficient measures the extent to which the incomes of individuals or households in an economy deviate from a perfectly equal distribution. It is important to bear in mind that the Gini coefficient is neither a necessary nor a sufficient indicator or condition for improving the lives of the poor in South Africa. Methodological differences in the available underlying data and differences in the methodology by which the Gini coefficient is calculated, complicate comparisons. The Gini coefficient measures inequality using a ratio analysis that makes it easy to interpret. A Gini coefficient of 0 represents perfect equality and 1 means perfect inequality. Using the Gini coefficient, inequality in South Africa improved marginally from in 2007 to in The Eastern Cape on the other hand became more unequal with Gini coefficients of in 2007 and in The Gini coefficient for the district was 0.62 in 2008 and 0.61 in 2010 indicating a moderate improvement. Nevertheless equity remains a problem. In the past inequality in South Africa was largely defined along racial lines. Today it has become increasingly defined by inequality within population groups, as the gap between rich and poor within each group has increased substantially Gini coefficient The Gini coefficient measures the inequality as a proportion of its theoretical maximum. The Gini coefficient ranges from 0 (no inequality) to 1 (complete inequality). Quantec*; Presidency *Please consult the attached metadata documents. PAGE 17

20 Population Poverty rate (%) Number of people living in poverty POVERTY AND INCOME PEOPLE IN POVERTY POV PEOPLE IN POVERTY % CHANGE IN POV (Y/Y) Poverty is notoriously difficult to define but researchers typically take one of two approaches; the first is the povertyline approach and the second is the accesstoservices approach. Following the povertyline approach, the number of households that fall below a chosen minimum income threshold are said to be living in poverty (the minimum income threshold is the minimum level of income that is required to meet basic needs). The number of people living poverty in both South Africa and the Eastern Cape is declining. Of the 22 million people living in poverty in South Africa, nearly 3.9 million people live in the Eastern Cape. This means that 44% of South Africa s population and 57% of the province s population are living in poverty There are an estimated 169,787 people living in poverty in the district, representing 52% of the district s local population. The number of people living poverty is declining, however, and since 2005 it has declined by an annual average of 4.6% POVERTY RATE POP PERCENTAGE POV Number of people living in poverty Poverty rate (%) Population Number of people living below the poverty line. There is no official poverty line defined in South Africa, therefore UNISA's BMR poverty line has been used. The poverty line for Port Elizabeth is R1 892 per month at 2005 prices and has been used as a benchmark for all the districts in the Eastern Cape. StatsSA; Quantec; BMR The Minimum Living Levels were projected from calculations of previously disadvantaged households living in former segregated urban areas in Port Elizabeth in 2003/2004. The poverty rate is taken as the percentage of people in poverty relative to the population of that area. PAGE 18

21 Number of illiterate people age 20+ years Number of people aged 15+ years with no schooling POVERTY AND INCOME EDUCATION NO SCHOOLING: PERSONS AGED 15+ SCHOOL % CHANGE IN SCHOOL (Y/Y) The effects of education (or noneducation) are extensive throughout society. Education links directly to povertyreduction efforts, with poverty levels tending to be lower among families in which the head of the household has had some education than in those where the head of the household has no education. Education is also directly related to improved health and impacts especially on premature death rates among children. Even with improved education levels, jobs may still be hard to find, although education considerably enhances the chances of finding employment. The illiteracy rate in the Joe Gqabi district is relatively high with over 21.7% of the population being functionally illiterate. The number of people aged 15 years or older without any schooling is a matter of concern. Fortunately this figure has been coming down. In 1995 more than 41,000 adults had not received any schooling, but this figure dropped to just over 28,000 in This represents 8.6% of the population as opposed to 12.4% in This is higher than the percentage for the Eastern Cape at 7.2% and for South Africa at 6.3%. This has, however, been improving. Since 1995 the number has been dropping by an average of 2.4% per annum, although this rate of improvement has declined in recent years to an average of 3.9% per annum since ILLITERACY: PERSONS AGED 20+ ILLIT % CHANGE IN ILLIT (Y/Y) Number of people with no schooling Number of illiterate people A literate adult is defined as a person 20 years and older who has achieved at least seven years of education (i.e. passed grade 7). Quantec* Distribution variable is calculated using variable as a percentage of the provincial total for the variable in question. *Please consult the attached metadata documents. PAGE 19

22 Annual total HH expenditure (Rm, 2005 prices) POVERTY AND INCOME HOUSEHOLD EXPENDITURE HOUSEHOLD EXPENDITURE Household expenditure in this district is estimated to be just under R4.2 billion. Household income is R4.3 billion indicating very little household savings HH EXPENDITURE % CHANGE IN HH EXPENDITURE (Y/Y) Households tend to spend less on durable goods (just over 10%) and a greater percentage on nondurable goods and services. There is consequently very little wealth accumulation. DISTRIBUTION OF HOUSEHOLD EXPENDITURE (2010) Services Nondurable goods Semidurable goods Durable goods R, 2005 prices Household expenditure (Rm, 2005 prices) Final consumption expenditure by households. Quantec* *Please consult the attached metadata documents. PAGE 20

23 Income category (R, 2005 prices) Annual total disposable income (Rm, 2005) POVERTY AND INCOME DISPOSABLE INCOME DISPOSABLE HOUSEHOLD INCOME HH INCOME % CHANGE IN HH INCOME (Y/Y) Total household income for 2010 in the Joe Gqabi district was estimated at R4,291 million, most of which (97.6%) was used as household expenditure. Of total income, remuneration (salaries, wages, business proceeds etc.) accounted for 61.1% and whole unearned income accounted for 38.9% of total income, which suggests that considerably more than a third of households in the district are surviving on pensions, government grants and remittances. The average household income in Joe Gqabi in 2010 was just more than R43,000 (2005). DISTRIBUTION OF DISPOSABLE INCOME (2007) R 2,457,601 or more R 1,228,801 R 2,457,600 R 614,401 R 1,228,800 R 307,201 R 614,400 R 153,601 R 307,200 R 76,801 R 153,600 R 38,401 R 76,800 R 19,201 R 38,400 R 9,601 R 19,200 R 4,801 R 9,600 R 1 R 4,800 No income Number of households Disposable income (R, 2005 prices) Disposable household income looks at the total household income for the region less the tax commitments by all the members of that household. Quantec* Distribution variable is calculated using variable as a percentage of the provincial total for the variable in question. *Please consult the attached metadata documents. PAGE 21

24 LABOUR FORCE It is well known that South Africa and the Eastern Cape is facing a jobs crisis. There are large numbers of unemployed people, large and increasing numbers of discouraged workers and a growing noneconomically active population. Official unemployment has remained around the 30% mark for more than 15 years. The Eastern Cape has the highest net outmigration of any province in SA. In the absence of high net outmigration the Eastern Cape s unemployment rates would be much higher than they currently are. Further there is a large and steady inflow of new entrants into the labour market from our schools. The jobs crisis is compounded by a skills crisis. The Eastern Cape government has developed a Jobs Strategy. The purpose of the Jobs Strategy is to present the provincial government s understanding of the present provincial jobs and skills crises and explain and justify government s comprehensive approach to tackling these crises. The strategy shows how government s activities are being ramped up to align with the New Growth Path (NGP) jobs targets. Sectors and projects with jobcreation potential are identified. Quantified and disaggregated job creation targets for have been developed. The strategy also identifies and defines the priority interventions necessary to achieve these targets and identifies key issues, challenges and constraints that must be addressed to optimise job creation outcomes. The strategy has five pillars: 1) Retain existing jobs. 2) Stimulate new jobs in priority sectors. 3) Build the social economy. 4) Increase the pace of provincial economic infrastructure investments in critical areas. 5) Radically improve our skills development processes. This section outlines key indicators for the labour market in the region. PAGE 22

25 Number of economically active persons (EAP) LFPR (%) Number of economically active persons (EAP) LABOUR MARKET LABOUR FORCE ECONOMICALLY ACTIVE POPULATION (EAP) EAP % CHANGE IN EAP (Y/Y) LABOUR FORCE PARTICIPATION RATE The economically active population (EAP) includes all persons of either sex, and above a certain age, who supply labour for productive activities, during a specified timereference period. Productive activities are either market production activities (work done for others and usually associated with pay or profit) or nonmarket production activities (work done for the benefit of the household, e.g. subsistence farming). The EAP therefore includes the proportion of the population from 15 to 64 years of age that is employed, selfemployed or seeking employment. In essence, it is the number of people that are willing and able to work and can generally be viewed as the labour force. The number of economically active people in Joe Gqabi in 2009 was 78,000, representing 24% of the region s population. The corresponding figure for the Eastern Cape is 27% and 33% for South Africa. In 1995, 30% of the population was economically active. The labour force participation rate (LFPR) has been falling. Moreover, the LFPR for the Joe Gqabi district is lower (32%) than that of South Africa (52%) which in turn is higher than that of the Eastern Cape (44%). Although the population has been growing, the labour force has been falling by an average 3.5% pa since Nationally, this decline is 1.1% pa. This can be attributed to the growing number of the population that can be described as not economically active. Since 2006 this has grown at almost 5% pa. Of concern is the growth in the number of discouraged work seekers, which has grown by a staggering 34% pa since Although high, the national average is about half that of the Eastern Cape at 17.2% pa. EAP LFPR EAP EAP as % of Eastern Cape (%) LFPR (%) Economically active population (or labour force) consists of employed and unemployed people and refers to the working age population (between the ages of 15 65). The not economically active population are people out of the labour market who are not available for work and includes students, fulltime scholar, fulltime homemakers, retired and those unable or unwilling to work. The labour force participation rate (LFPR) is the labour force divided by the population of working age (15 to 64 years). Quantec* Distribution variable is calculated using variable as a percentage of the provincial total for the variable in question. *Please consult the attached metadata documents. PAGE 23

26 Population Unemployment rate (%) Number of unemployed persons LABOUR MARKET UNEMPLOYMENT NUMBER OF UNEMPLOYED UNEMPL % CHANGE IN UNEMPL (Y/Y) Employment is a function of economic activity. As the economy grows so does the number of people employed. In recent times, employment growth has not been commensurate with economic growth rates. This is because some sectors are able to create more employment opportunities with a given economic growth rate. Creating jobs for unskilled labour is especially difficult, hindering efforts to disperse the benefits of economic growth more evenly. The number of total employed has been decreasing since Jobs have been shed at a rate of 2.7% pa since In 2001, 71,000 people were employed but this dropped to 57,000 in The percentage of employed people with formal jobs is declining slowly as more people find informal positions. In South Africa this fell from 87% in 1995 to 82% in The same trend is evident in the Eastern Cape where 85% formal employment was recorded in 1995 and only 75% in Joe Gqabi follows this trend with 84% formally employed in 1995 and only 76% in It is evident that there is a lower percentage of highly skilled and skilled people working Joe Gqabi than in the Eastern Cape or South Africa as a whole. In addition, 24% of employed people have found work in the informal sector compared to 25% in the Eastern Cape and 18% in South Africa. UNEMPLOYMENT RATE POP UNEMPL RATE Unemployment Unemployment rate (%) The unemployed are those people within the economically active population who: 1) did not work during the seven days prior to the interview 2) want to work and are available to start work within two weeks of the interview 3) have taken steps to look for work or to start some form of selfemployment in the four weeks prior to the interview. The expanded definition of unemployment excludes criterion (3). The unemployment rate is the total number of unemployed persons as a percentage of the economically active population (or labour force). Quantec* Distribution variable is calculated using variable as a percentage of the provincial total for the variable in question. *Please consult the attached metadata documents. PAGE 24

27 Population Employment rate (%) Total number of persons employed in the formal and informal sector LABOUR MARKET EMPLOYMENT FORMAL AND INFORMAL EMPLOYMENT FORMAL EMPL INFORMAL EMPL % CHANGE IN EMPL (Y/Y) The number of employed people in Joe Gqabi has dropped since 2001, largely due to the decline in formal employment. The percentage of employed people with formal jobs is declining slowly as more people find informal positions. In South Africa this fell from 87% in 1995 to 82% in The same trend is evident in the Eastern Cape where 85% formal employment was recorded in 1995 and only 75% in EMPLOYMENT RATE POP EMPL RATE Formal employment as % of total employment (%) Informal employment as % of total employment (%) Total employment Employment rate (%) The employed include all people that are employed either by the formal or the informal sector or those that are self employed. The informal economy has no formal definition and is sometimes called the unrecorded economy, shadow economy or hidden economy. Businesses in this sector are generally so small that they cannot or do not want to pay taxes or are engaged in illegal activities. Employers in the formal sector are businesses that generally comply with all tax and other regulations and are typically larger than those in the informal sector. Quantec* Distribution variable is calculated using variable as a percentage of the provincialtotal for the variable in question. *Please consult the attached metadata documents. PAGE 25

28 CRIME High levels of crime are a concern to all South Africans. South Africa has an extraordinarily high rate of murders, assaults, rapes (adult, child and infant), and other crimes compared to most countries. The South Africa Police Service (SAPS) is tasked with policing and crime prevention. In the Eastern Cape there are 17,600 sworn police officers and over 4,000 civilian police officers. The crime prevention strategy for the Eastern Cape focuses on strengthening communities against crime, preventing violence, preventing corruption and strengthening the criminal justice system. The Eastern Cape Department of Safety and Liaison reports that crimes of particular concern for the Eastern Care are: Crimes involving firearms which have significantly increased the level of violence associated with crime; Organised crime, including the organised smuggling of narcotics and human trafficking; Gender Based Violence and crimes against women and children; Violence associated with intergroup conflict, such as political conflicts, taxi violence and land disputes; Vehicle theft and hijacking; and, Corruption within the criminal justice system. PAGE 26