SA to use data for closing local and wider economic gaps

Minister of finance Enoch Godongwana. | Timothy Bernard African News Agency (ANA)

Minister of finance Enoch Godongwana. | Timothy Bernard African News Agency (ANA)

Published Jun 21, 2023


Johannesburg - The National Treasury and the Human Sciences Research Council have launched the innovative Spatial Economic Activity Data: South Africa (Sead-SA).

The new initiative addresses the gaps that exist between the local economies of cities and the wider economic geography of the country by leveraging tax and other administrative data sources.

According to the National Treasury, for the first time, granular spatial data exists to help inform vital policy, planning, and research questions about urbanisation, uneven development, territorial disparities, and the productivity and economic conditions of municipalities, cities, towns, and suburbs or wards.

Minister of Finance Enoch Godongwana said there were are already six key messages coming from the data.

First, he said the data indicated that metros are the country’s job generators.

Godongwana said this role must be supported through public sector planning and investment, both from an economic and human settlements perspective.

“The data shows job shedding within strategic industrial spaces in our metros, with more than half of the top 30 metro industrial spaces losing jobs since 2014. The reasons for this can lead to uncomfortable truths,” said the minister.

He said that everything has to be done within the public sector to make these spaces productive and competitive.

Secondly, Godongwana said that the collapse of one metro could result in the collapse or severe decline of specific industries.

“This has major ramifications for the country as a whole owing to the extensive national, regional and global value chains in which firms participate. The message is that as a country, we cannot allow a single metro to fail,” he said.

Third on the list is the data showing that strong urban centres are necessary for productive rural hinterlands.

“The data show the important contribution of rural economies to the country’s primary sectors, with urban centres performing stronger value-adding, logistics, and market-demand roles. Decline in urban industrial spaces also impacts the productivity of rural economic spaces,” added Godongwana.

The data also indicated that marginal city economic spaces, such as townships, and communities, such as youth and women, continue to be marginalised from the formal economy.

“Fifth, there is a strong correlation between well-governed and stable cities and increasing productive activity. Failure to get the basics right in our cities is resulting in firms and households voting with their feet.

“There are evident trends of semi-migration of firms and individuals to provinces and cities that are perceived to be well-governed and stable,” he said.

Finally, Godongwana said that measuring the economic outcome of public sector investment in and within municipalities was now possible, whereas before the country could only report on economic outputs at a local level, as encapsulated through the Circular 88 local government reporting reform.

“The spatialised tax data enables the measurement of our collective impact on the numbers of jobs and firms of different sizes and sectors as far back as 2014, with data being updated on an annual basis,” he said.

Godongwana said that this would also allow for the tracking of the impact across space of different economic shocks at specific points in time and the understanding of market responses and time periods for recovery.

“The data make this reality visible and require the government to be held accountable and to hold itself to account,” he said.

The Star