A REGIONAL OVERVIEW OF
A REGIONAL OVERVIEW OF NORTH WEST PROVINCE The North West has massive mineral resources. Credit: Implats Global prices are supporting rising production for miners and farmers but governance issues at local level need to be addressed. By John Young There was good news for South African taxpayers in the first half of 2021: expected income tax increases did not materialise. This was because the mining industry, many of whose key players have operations in the North West, delivered R99.6- billion more than expected to National Treasury. With many global prices for commodities rising to record levels in 2020 and 2021, mining companies were able to pay down debt, reward shareholders and dust off feasibility studies for expansion projects that had previously been shelved. This also helped to ameliorate the effects of the global pandemic in terms of job losses in the North West. The other sector in good shape – and in which the North West excels for variety and quality – is agriculture. The grain sector, one of the province’s strongest, experienced an unusual bonanza of nearrecord harvests and good prices on the international market. The good prices are driven by drought in other parts of the world and increasing demand from China. Logistical challenges, not all of which were NORTH WEST BUSINESS 2021/22 10
SPECIAL FEATURE related to Covid-19, somewhat hampered the amount of product that miners and farmers were able to export through the country’s ports. At local level, Clover announced in 2021 that it was to close down its cheese factory in Lichtenburg because of unreliable water and power supply. The ability of local authorities to manage the infrastructure of towns and districts has been under scrutiny for some time and national government has signalled its intention to intervene. The African National Congress, the province’s biggest political party and the party of national government, announced a new premier four months before local government elections were due to be held. The North West Provincial Government announced a series of steps taken within its administration which showed that accountability for bad behaviour was being implemented. Among the measures were the firing of the head of the Department of Health, the cancellation of an ICT contract and a restructuring process undertaken in conjunction with the National Department of Public Service and Administration. The establishment of the Mafikeng Digital Information Hub, a co-working 4IR hub in the centre of Mahikeng, is an indicator that the province is intent of joining the digital movement. The hub is led by Joseph Ndaba, who is serving on the Presidential Commission on 4IR. The aim of the hub is to unearth and cultivate innovative solutions that will assist communities to acclimatise to the digital world and to help incubate new businesses. Geography and economy The North West is bordered on the west by the Republic of Botswana and on the east by Gauteng, the engine of the South African economy. The North West province makes up 6.8% of the population of South Africa (3.6-million), 8.7% of the land mass (105 076km²) and accounts for 5.8% of economic output in terms of gross value added. The Vaal River runs along the province’s southeastern border with the Free State, and the province also shares borders with the Northern Cape to the south and Limpopo in the north. AI 4 Rural Development at the Mafikeng Digital Innovation Hub. The mineral reserves in the province are enormous. Platinum group metals (PGMs) predominate but there are significant deposits of gold, uranium, diamonds, copper, vanadium, fluorspar and nickel. Stone and limestone are also found in large quantities. Mining beneficiation takes place at many places, with Rustenburg being particularly strong in this sector. The economy of the town is closely linked to the fortunes of platinum mining, with the sector contributing about 70% of the city’s gross geographic product. Automotive components firms are clustered in Brits, which in turn is close to the automotive manufacturing hub of Rosslyn (Pretoria) in Gauteng. Towns like Klerksdorp (agro-processing and engineering) and Potchefstroom (food and beverages) also have manufacturing capacity. The North West is a major producer of maize and sunflower seeds and many other agricultural products. About 20% of South Africa’s maize comes from the province, as does 15% of its wheat. The dry western part of the province is home to beef cattle, game ranching and hunting. The normally well-watered eastern and north-eastern regions carry varied crops, many of which are sold in Johannesburg and Pretoria. The agricultural sector also generates largescale storage and logistics operations, particularly in Klerksdorp, Vryburg and Brits, together with a number of agro-processing plants. Senwes is one of the biggest with extensive silo infrastructure while Suidwes has 17 retail outlets and MGK makes full-fat soy at its manufacturing plant. Lichtenburg-based NWK makes liquid fertiliser and animal feed, processes sunflower seeds and runs 37 silos and three grain mills. 11 NORTH WEST BUSINESS 2021/22
