The Western Cape is one of the world’s greatest emerging markets

Political analyst Dr Frans Cronje believes South Africa may eventually split into separate political regions, but he says the Western Cape will come out ahead in the long run.

“The trend line is obviously balkanisation,” Cronje said in an interview with BizNewsTV. “It’s terribly easy to draw that conclusion now. Everything points there.”

Balkanisation refers to the breakup of a country into smaller, semi-independent regions, often due to political or economic tensions.

He noted, however, that this outcome is not certain. Making a unitary state work would be an easy fix, and he said, “It’s extraordinary that the ANC doesn’t do it.”

Regardless of whether South Africa stays united or divides, Cronje is confident the Western Cape will thrive.

“I think the Western Cape is one of the world’s greatest emerging markets of the next 30 to 40 years,” he said. “Regardless of what happens to the country.”

The province’s economy will benefit in either scenario. He said that if South Africa’s economy grows, the Western Cape’s existing advantages will help it grow even faster.

“On the other extreme, if the north of the country falls into greater chaos and anarchy, the dumping of capital and skills on the Western Cape will just become greater and greater,” he explained.

He added that if the Western Cape were bolder, it could even negotiate its own trade deals.

“And why not?” Cronje said. “What would Pretoria say if Western Cape agricultural producers were told, ‘if your product originates from a farm in Paarl, then your tariff rate is 10%?’ Is Pretoria going to say ‘no, it must be 30%?’”

Outperforming national economic benchmarks

He said that there are always corners of South Africa that are extremely high that are extremely high-growth economies.

“Just from a standard of living perspective, you’ll recognise that this is an absolutely magnificent place to be for many people,” he said.

“If you want to do well in a future South Africa, don’t just think of it just as a macro-unitary state,” he said. 

The Western Cape has consistently tracked above the national average. In the 2024/2025 Municipal Economic Review, Western Cape Minister of Finance Deidre Baartman said the economy has demonstrated resilience and growth. 

She added that “while economic growth in the Western Cape outperforms the rest of the country, growth remains slow due to South Africa’s structural economic challenges.”

In Statistics South Africa’s latest Quarterly Labour Force Survey, the Western Cape had the lowest unemployment rate in South Africa, at 21.1%. 

Unemployment in the Western Cape has remained below the national average consistently for the last ten years. 

It also recorded the largest increase in employment, creating 69,000 jobs in year-on-year in 2025. 

In the first quarter of 2025, Cape Town experienced quarterly GDP growth of 0.5%, higher than the national growth of 0.1% in the same period. 

Western Cape Premier Alan Winde said, following the first quarter, that the province is on track to meet the Growth for Jobs goal to build a R1 trillion economy by 2035.

The Business Confidence Index (BCI) for the Western Cape, measuring business sentiment and performance, was 51 for the second quarter of 2025, well above Gauteng at 37 and KwaZulu-Natal at 24. 

This is also above the national BCI of 40. “Strong business confidence is not an accident,” said Winde. “This is the result of our hard work in ensuring the Western Cape is the easiest province to do business in.”

“Our province continues to outperform national benchmarks, offering better employment opportunities and demonstrating resilience in key industries such as agriculture and trade,” said Winde. 

However, the Western Cape’s ambitions have been dampened by global economic pressures. To meet Winde’s goal of building a R1 trillion economy, the Western Cape economy needs to grow by between 4% and 6% per annum.

Following the recent implementation of US export tariffs of 30%, Western Cape’s provincial Agriculture, Economic Development, and Tourism Minister Ivan Meyer downscaled the province’s economic growth ambitions to 3% per year.

Meyer announced that the R1 trillion economy is “no longer possible” and that the province is now aiming for a range of between R700 and 800 billion, as reported by Engineering News.

Despite the looming tariffs, Meyer has praised the growth of the Western Cape agricultural sector, which grew 14% year-on-year by the second quarter of 2025.

Meyer recently commented on the province’s upcoming Western Cape Investment Summit taking place in November 2025, an event which he has called “a bold step towards a R1 trillion economy”

Increasing private investment in the Western Cape to 20% of the regional GDP is key to the Growth for Jobs strategy.

Aiming to entice private investors, Meyer said that “the Western Cape is a beacon of opportunity, blending world-class infrastructure, political stability, and a dynamic economic ecosystem.”