Cape Town - Forty-five thousand jobs in the Western Cape are currently at risk because of the drought, and the longer it stays dry the more that figure will rise.
Already 94% of companies in the province have reported water as a direct risk to their operations.
This figure is the highest globally and companies could soon face closure as the drought eats into their profits.
According to the Western Cape provincial economic review outlook, the potential impact of water shortages on businesses’ reputation for reliability and quality could be severe.
“While the focus is currently largely on physical risk, financial risk is emerging as a concern with increasing water tariffs resulting in higher cost for companies and a potential loss of competitiveness. These risks are likely to have more disruptive impact on highly water intensive users,” the report read.
Alan Winde, MEC for economic development, said the less rain the province got each month, the bigger the risk of job losses.
“We had a figure estimated at 17 000 job losses. That figure currently stands at about 45 000 job losses. The risk grows bigger each month if we get less rain,” Winde said.
He said, however, it was encouraging to see businesses were so wary of their water usage.
“We need every single person in this province to save as much water as they can. It is very encouraging to see the amount of companies that are now aware and actively taking steps. As a government we are doing our best to avert the worst situation, but it will take everyone working together,” he said.
Heavily and moderate water-intensive business make up 30% of the Western Cape’s economy. The oil and gas and agri-processing sectors are heavily water dependent.
The oil and gas sector includes, in the main, the rig repair, ship repair and ship fabrication sub-sectors. The marine services sector contributed R1.5 billion to the province’s economy last year.
The sector employed 5 878 workers last year, slightly down from 6 060 jobs in 2015. The decline in the sector can be attributed to the challenges within the port environment such as lack of capacity and aging equipment, the outlook read.
The agri-processing sector is also in for stormy times as the drought crisis in the Western Cape worsens.
According to the outlook’s estimates the sector is likely to face higher levels of competitiveness and challenges to remain profitable.
The agriculture and agri-processing sector remains a strategic focus given its contribution to jobs growth and foreign earnings.
In 2015 the agri-processing sector contributed R21.966bn to province, an increase of R444 million from 2013. Last year the sector employed 448 233 people.
Meanwhile the average level for dams across the Western Cape for the start of the week is 35.88%.
In the corresponding period last year, dam levels were at 62.2%.
MEC for Local Government, Environmental Affairs and Development Planning Anton Bredell said the province was likely to enter the summer season with only around 25% useable water in its dams.
“This drought has been coming a long time. As a province we have been managing it in some localities since 2010. Three years of below average rainfall have exacerbated the situation and despite pro-active measures like implementation of water restrictions and programmes to clear the Berg River of alien vegetation, the reality is we are faced with a dire situation.”