Slide 1

Socio-Economic Inputs Presented by: Pierre van Jaarsveld Slide 2 Contents 1. Status Quo 2. Growth Drivers 3. Economic Analysis 4. Economic Growth Scenarios 5. Financial Implication of Water Reduction 2 Slide 3 3 Slide 4 Age Profile 4 Slide 5 Race Profile 5 Slide 6 Population Density 6 Slide 7 Population Size 200120072010 (est.)Growth Rate Mbombela LM476,593527,203546,4111.2% Source: Urban-Econ calculations based on Statistics SA data 7 Slide 8 Annual Household Income 8 Slide 9 Income Expenditure 9 Slide 10 10 Slide 11 Growth Drivers 1. Population Growth Drivers 1. Birth and Death Rates 2. Migration Patterns 2. Economic Growth Drivers 1. Sources of Economic Growth 1. production inputs 2. productivity of production inputs 2. Proximate determinants of economic growth 1. Skills level, Infrastructure, land and technology 11 Slide 12 Growth Drivers (2) 3. Fundamental Growth Drivers 1. Labour 2. Capital 3. Investments 4. Skills Development 5. Infrastructure 6. Competitive Advantage 7. SMMEs 8. HIV/AIDS 4. Employment Growth Drivers 3. Quality of labour force 4. Economic growth 5. Human resource development 12 Slide 13 13 Slide 14 Production Structure (2011) 14 Slide 15 Production Structure 2011 (Rmillion) Mbombela Total GVA (2011) = R17,305,200,000 15 Slide 16 Production Structure (2001-2011) 16 Sector200120062011 Primary Sectors Agriculture4.7%3.5%3.7% Mining2.4%3.2%2.8% Secondary Sectors Manufacturing20.3%19.4%19.5% Utilities2.4%2.1%1.9% Construction2.5%2.7%3.1% Tertiary Sectors Trade Sector16.4%14.8%13.3% Transport and Communications11.5%10.8%9.9% Finance and Business Services17.2%20.1%20.7% Community Services8.0%8.4%8.5% Government Services14.5%14.9%16.6% Total100% Slide 17 Employment (1996-2011) 17 Sector1996200120062011 Agriculture19.8%18.9%14.1%7.6% Mining1.6%0.7%1.1%2.7% Manufacturing14.8%11.1%9.4%6.3% Utilities0.6% 0.7% Construction9.4%6.9%5.7%4.5% Trade and Accommodation 16.6%20.2%18.7%16.6% Transport and Communications 3.2%2.7%2.8%2.3% Finance and Business Services 9.2%11.8%15.9%18.4% Community Services12.1%14.2%16.0%17.5% Government Services12.7%12.9%15.8%23.4% Total100% Slide 18 Tress Index (Level of Concentration) Diversified 0 Concentrated 100 Mbombela 47.2 18 SectorContribution (%)WeightWeighted Value Agriculture3.7%414.9 Mining2.8%25.6 Manufacturing19.5%7136.7 Utilities1.9%11.9 Construction3.1%39.4 Trade Sector13.3%680.0 Transport & communication 9.9%549.6 Finance and business20.7%8165.5 Services25.0%9225.4 Total100% 688.9 Tress Index47.2 Slide 19 Location Quotient 19 Sector Location Quotient (2011) Label Agriculture0.97Medium Mining0.18Low Manufacturing0.90Medium Utilities0.49Low Construction1.16Medium Trade Sector1.09Medium Transport & communication0.91Medium Finance and business services1.38High Community Services1.24Medium Government Services1.20Medium Slide 20 20 Slide 21 Economic Growth Scenarios (Rmillion) 201220152020202520302035 Historic 17,82819,77624,44029,13133,69439,713 High 17,88020,04025,85832,54339,42749,745 Low 17,77519,47523,25026,63829,24830,617 3.54% 4.55% 2.38% 21 Slide 22 22 Slide 23 Current Water Usage Source: IWR Water Resources and Mbombela LM 23 m 3 /annumMl/annumMl/day Industrial19,018,00019,01852 Urban/Domestic52,988,80052,989145 Irrigation147,000,000147,000403 Forestry52,000,00052,000142 Slide 24 Monetary Value of Water Current Monetary Value of Water Based on Gross Value Added (GVA) Agriculture and Industrial * Primary Value Water Usage (Ml/annum)GVA (Rmillion)Rand/Ml 271,00717,828R 65 783.21 Rand/Ml AgricultureR 3,366 * IndustrialR 183,199 24 Slide 25 Reducing the water usage of Agriculture by 10% 25 Slide 26 Agricultural Sector The agricultural sector is a primary sector that provides product inputs to: Manufacturing Trade Transport Business services 26 Slide 27 Manufacturing Sector Has 10 sub sectors: 1. Food, beverages and tobacco 2. Textiles, clothing and leather goods 3. Wood, paper, publishing and printing 4. Petroleum products, chemicals, rubber and plastic 5. Other non-metal mineral products 6. Metals, metal products, machinery and equipment 7. Electrical machinery and apparatus 8. Radio, TV, instruments, watches and clocks 9. Transport equipment 10. Furniture and other manufacturing 27 Slide 28 Manufacturing Sub-Sectors Four of the sub-sectors are directly related to the agricultural sector: Food, beverages and tobacco Textiles, clothing and leather goods Wood, paper, publishing and printing Furniture and other manufacturing 28 Slide 29 Financial Impact Assumptions Assumptions The impact is a snapshot of the current (2012) economic production. Historic growth trends will continue Elements not taken into consideration Economic growth cycles Severe climatic conditions (drought, floods, etc.) Water consumption changes Water losses Demographic changes (population growth, migration, illegal immigrants, etc.) * Comprehensive Scenario Testing is needed for more reliable data 29 Slide 30 A Financial Impact of 10% 30 10% ImpactLoss as a percentage of Total GVA Agriculture 0.38% Manufacturing1.23% Slide 31 A Financial Impact of 15% 15% ImpactLoss as a Percentage of Total GVA Agriculture 0.56% Manufacturing 1.85% 31 Slide 32 32