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State of The City's Economy
EThekwini Municipality has taken great financial strain as one of the epicentres of the country as a result of the Covid19 outbreak. Businesses across the sectors have suffered tremendous loss and a shortfall of revenue since the national lockdown announced in March.

In response to the impact of Covid_19 on City’s economy the Economic Development Unit has developed an Economic Recovery Plan (ERP) which was commended by both National Treasury and the World Bank. 

The ERP has prevented the loss of 2,0% growth to the City’s economy or R6,02 billion, while monetary interventions (interest rates cuts) have prevented the loss of 1,2 % to the City’s economy in 2020.

An assessment by Future Cities South Africa (FCSA, 2020) and eThekwini Municipality gives us an overview of the impact of pandemic on the Durban’s economic growth and expected recovery. A data story compiled by the Durban Edge reveals the sectors mostly affected in terms of revenue and their contribution to Durban’s GDP.

As per FCSA, it is concerning to note that only 40% of the City’s economy was operational during April and June. This is perpetuated by the successive decline in economic growth since the third quarter of 2019.

The easing of lockdown regulations is expected to see a gradual recovery every month according to FCSA with growth only expected in 2021 but at levels below the pre Covid-19 trends. An Economic Activity Outlook Survey (EAOS) conducted by the Economic Development Unit shows that most of the manufacturing sector came to a near standstill during hard lockdown with no production or sales.

Manufacturing contributes 18,8% to Durban’s economy, and is the City’s third largest economic preceded by the Finance and Business Services, and Community Services sectors. It is predicted to have lost the most in revenue, R11,3 billion on average, per lockdown level. The Wholesale Trade sector is estimated to have lost R4,5 billion in revenue on average, per lockdown level which contributes 16,4% to Durban’s GDP and is the City’s fourth largest economic sector after manufacturing.

Senior Research Adviser, Economic Development Unit, Tshegang Chipeya, says that as per the survey conducted the ERP alone is not enough to ensure economic recovery and that the extent of recovery is also dependent on implementation of long term capital projects and economic policies in the City to safeguard economic rebound. “An initial assessment by the City’s Economic Development Unit, found that, keeping all other factors constant; implementation of Catalytic Investments prioritised by the City for 2021 is likely to increase economic growth approximately by 1% per year.

Implementing these same projects would further increase employment in the City by 0.9% of the labour force, or approximately 10 000 jobs; although the majority would be temporary construction work opportunities,” she added.
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