{"id":7330,"date":"2026-06-15T01:49:09","date_gmt":"2026-06-15T01:49:09","guid":{"rendered":"https:\/\/www.fintechpulse8.com\/?p=7330"},"modified":"2026-06-15T01:49:09","modified_gmt":"2026-06-15T01:49:09","slug":"cape-town-tests-joburgs-long-standing-hold-on-sa-economy","status":"publish","type":"post","link":"https:\/\/www.fintechpulse8.com\/?p=7330","title":{"rendered":"Cape Town tests Joburg\u2019s long-standing hold on SA economy"},"content":{"rendered":"

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Confidence in Cape Town is being written in its skyline.<\/p>\n

Amazon.com has built a $250 million (about R4.07 billion) African headquarters at the foot of Table Mountain. Buyers are shelling out more than $3 million (about R48.84 million) apiece for apartments near a planned billion-dollar expansion of the prized V&A Waterfront district, where Marriott International is set to open its most luxurious hotel on the continent.<\/p>\n

Read:<\/p>\n

Cape Town gets \u2018seven-star\u2019 Marriott Edition hotel
Table Bay Hotel set for R1bn facelift and relaunch as InterContinental<\/div>\n
R230m superyacht marina planned at V&A Waterfront<\/div>\n

For 250 years after the first ships from the Dutch East India Company landed at the Cape of Good Hope, the city sat at the heart of South Africa\u2019s economy.<\/p>\n

Then, in 1886, the discovery of the world\u2019s biggest gold field shifted capital inland. Johannesburg was born and soon eclipsed the coastal city.<\/p>\n

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Now, the pendulum is swinging again. Johannesburg is grappling with stalled projects, corruption scandals and fiscal strain, while Cape Town booms.<\/p>\n<\/blockquote>\n

Their diverging fortunes reflect a broader reshaping of Africa\u2019s biggest economy.<\/p>\n

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Johannesburg is grappling with stalled projects, corruption scandals and fiscal strain. Image: Bloomberg<\/p>\n<\/div>\n

Growth in the Western Cape, where Cape Town accounts for about 72% of output, outpaced the national average in 2025.<\/p>\n

The city has the lowest unemployment rate of all the country\u2019s metros and last year added more jobs than any other major hub, helping fuel migration and drive up property prices. It has also overtaken Johannesburg to become the South African city with the most taxpayers.<\/p>\n

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Investors are \u201ctaking a bet on the future\u201d, Mayor Geordin Hill-Lewis of the Democratic Alliance told Bloomberg News.<\/p>\n<\/blockquote>\n

The city \u201chas good public services and a stable, trustworthy government,\u201d he said from the stands of a 55 000-seat stadium in Cape Town, which has hosted HSBC SVNS rugby tournaments and an Ed Sheeran concert.<\/p>\n

\u201cIt has all the ingredients to make it an attractive place to live.\u201d<\/p>\n

Listen\/read:<\/p>\n

The DA\u2019s bid to broaden its appeal<\/div>\n
Cape Town also gets Moody\u2019s outlook upgrade<\/div>\n
Cape Town affordable housing projects inch forward<\/div>\n

But even as capital, skilled workers and migrants arrive at a pace unmatched across South Africa, inequality remains a central concern.<\/p>\n

After more than three decades of democratic rule, the country still ranks as one of the world\u2019s most unequal, and townships \u2013 where apartheid governments forcibly relocated people of colour \u2013 remain among the poorest, most violent and underserved areas.<\/p>\n

In a 2023 report, the Centre for Sustainable, Healthy and Learning Cities and Neighbourhoods called Cape Town \u201cdeeply polarised and segregated,\u201d noting that sections of the population lacked access to basic water and sanitation services.<\/p>\n

\u201cPublic services help moderate some of these inequalities, but their reach and quality are also very uneven across the city,\u201d researchers said.<\/p>\n

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The imbalance is visible elsewhere too.<\/p>\n

Cape Town\u2019s political and business elite are disproportionately white relative to other major South African cities. Hill-Lewis, elected as national head of his party two months ago, pushed back against that critique.<\/p>\n

\u201cYou need to elect a capable government regardless of who the people are or what they look like,\u201d he said.<\/p>\n

Listen\/read: Hill-Lewis: DA must grow, reform and win black voter trust<\/p>\n

In November, Helen Zille, the white former mayor of Cape Town, will lead the DA\u2019s bid to take control of Johannesburg. The party is leading in the polls and will likely lean on its track record in Cape Town, which, for all its problems, remains a rare bright spot in South Africa\u2019s economy.<\/p>\n

It has a population of about 4.8 million, almost identical to Johannesburg\u2019s, and a smaller budget, yet it spends roughly twice as much on infrastructure investment and maintenance.<\/p>\n

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\u201cContrasting Johannesburg and Cape Town, you would swear you were in two different countries,\u201d said Busisiwe Mavuso, the CEO of the prominent lobby group Business Leadership South Africa.<\/p>\n<\/blockquote>\n

Led by the DA since 2006, Cape Town has benefited from policy certainty and is the only one of South Africa\u2019s eight largest metros to receive clean audits over the past three years.<\/p>\n

Read:<\/p>\n

Hill-Lewis\u2019s brotherly advice from Cape Town to Joburg<\/div>\n
Western Cape municipalities and Midvaal are the only ones in any kind of shape<\/div>\n

Johannesburg, by contrast, has been helmed by unstable coalitions and 10 mayors in the past decade \u2013 including from the DA \u2013 and now risks losing state funding because of what the finance minister termed irresponsible spending.<\/p>\n

Its role as a financial centre is being gradually eroded as ultra-rich South Africans, including business figures, increasingly base themselves in and around Cape Town, which lies more than 1 400 kilometres to the southwest.<\/p>\n

Read:
CoJ finances \u2018a horror show\u2019 \u2013 Scopa member
Johannesburg\u2019s decline since the 2010 World Cup is stark
Business warns Joburg crisis risks South African recovery<\/p>\n

The coastal city is on track to surpass Johannesburg as Africa\u2019s hub for millionaires by 2030, according to Henley & Partners\u2019 Africa Wealth Report, and its growing technology and startup ecosystem has earned it the moniker \u201cSilicon Cape\u201d.<\/p>\n

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Yet the influx of wealth has also sharpened questions over who actually benefits from Cape Town\u2019s growth.<\/p>\n<\/blockquote>\n

Family offices and venture capitalists are pouring into the city, and business process outsourcing has emerged as a fast-growing industry, but manufacturing, a key source of jobs for lower-skilled workers, continues to struggle.<\/p>\n

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Many residents remain concentrated in peripheral townships far from opportunity, while wealth is clustered in a handful of affluent corridors.<\/p>\n<\/blockquote>\n

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Still, the city ranks as the country\u2019s best-run major metro and has attracted thousands of people in recent years, pushing property values sharply higher.<\/p>\n

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\u201cThis is one of the world\u2019s great cities,\u201d said Jason Lock, the Africa vice president for Nasdaq-listed outsourcing firm Concentrix Corp. The government \u201cearly on understood the potential and the power of this industry to attract foreign direct investment to create jobs, to build economic wealth for the city and for the communities\u201d.<\/p>\n

Call centres alone provide about 70 000 mostly entry-level jobs, about three-fifths of the national total for the industry.<\/p>\n

Over the next decade, the city plans to grow that number to 200 000 people, working across sectors like legal and accounting, according to Clayton Williams, the CEO of CapeBPO, a city-funded industry body.<\/p>\n

Many of those jobs are held by young women of colour, the most marginalised demographic.<\/p>\n

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Shah Rukh Khan. Image: Bloomberg<\/p>\n<\/div>\n

Officials are also positioning Cape Town as a premium location for conferences, film productions and luxury events. The city issued more than 3 000 permits for commercials, music videos and television series, in the last financial year.<\/p>\n

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Shah Rukh Khan recently shot action and song sequences for a major Bollywood production.<\/p>\n<\/blockquote>\n

Local authorities hope growth across industries will help the Western Cape economy expand by 49% to R1 trillion by 2035, with Cape Town accounting for about three-quarters.<\/p>\n

That\u2019s more ambitious than Gauteng, Johannesburg\u2019s home province, which aims to grow output by a quarter to R2.18 trillion in the same period.<\/p>\n

Johannesburg remains home to Africa\u2019s largest stock exchange as well as major financial services and mining companies. It anchors a three-city conurbation that accounts for a quarter of South Africa\u2019s population and a third of the national economy.<\/p>\n

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\u201cWe don\u2019t have the mountain, we don\u2019t have the sea, but we\u2019ve got the 16.5 million people,\u201d said Sthembiso Dlamini, the CEO of the Gauteng Growth and Development Agency.<\/p>\n<\/blockquote>\n

\u201cWe still have the heartbeat of the economy.\u201d<\/p>\n

Cape Town is isolated from other centres of population, but the pace of activity is hard to ignore.<\/p>\n

Amazon\u2019s new African headquarters teemed with construction vehicles on a recent summer afternoon. Workers moved materials between sites for new offices, cranes lifted glass panels into place, and landscapers tended an indigenous garden built on land sacred to South Africa\u2019s San people, who trace their lineage back 100 000 years.<\/p>\n

Across the road, new housing, offices, and retail space are being built.<\/p>\n

These facilities will cater to a growing population, which includes people relocating from other South African cities in a trend known locally as semigration.<\/p>\n

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About 100 000 families have moved to Cape Town in recent years, according to the mayor, based on consumer and address change data.<\/p>\n

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They include Tamara, a self-employed mother, who relocated from Johannesburg in March with her husband and toddler. Her decision was driven in part by lifestyle.<\/p>\n

\u201cBeing able to walk to a park, walk to the library, walk to the church and walk to the forest is amazing,\u201d she said. \u201cIt is something we could not do in Kensington in Johannesburg, where gunshots were part of the neighbourhood soundtrack.\u201d<\/p>\n

Read:<\/p>\n

Joburg vs Cape Town: Africa\u2019s wealth capitals face off<\/div>\n
Ultra-rich Africans piling into property to preserve wealth, Standard Bank says<\/div>\n

The contrast is not straightforward. While violent crime is more pervasive elsewhere in South Africa, Cape Town\u2019s gang culture means it records a higher murder rate than Johannesburg.<\/p>\n

In one sign of the extent of such violence, as many as 26 people were killed on a recent weekend. City authorities say they\u2019re constrained as law enforcement is typically the domain of the national government.<\/p>\n

These crimes are prevalent in poorer areas, a divide that offers a further window into the extent of the disparity.<\/p>\n

The middle-class suburb of Muizenberg, with its sprinkling of historic homes, is a short drive from the unkempt low-rise blocks of Mitchells Plain, once reserved for mixed-race South Africans, and then on to Khayelitsha \u2013 one of the largest slums in the world, according to Cities Alliance.<\/p>\n

That township borders a barren stretch of beach where the wind whips sand off bare dunes across acres of corrugated iron shacks.<\/p>\n

A few miles on lie luxury wine estates.<\/p>\n

\u201cCape Town remains one of the most spatially unequal cities in the world,\u201d said Ndifuna Ukwazi, an activist and legal organisation that advocates for affordable housing.<\/p>\n

\u201cThe legacy of apartheid planning continues to shape where people live, where jobs are located, and how long residents spend commuting.\u201d<\/p>\n

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Whether the city\u2019s model continues to concentrate opportunity in a narrow segment or delivers broad-based prosperity remains an open question.<\/p>\n<\/blockquote>\n

Officials defend budgets as \u201cpro-poor\u201d, highlighting service-delivery gains ranging from more efficient clinics to a functioning fire department, compared with Johannesburg\u2019s shortage of trucks.<\/p>\n

City authorities are now seeking to wrest some control of passenger rail, the port and policing from national government, moves that have generated optimism in some quarters.<\/p>\n

Read:<\/p>\n

City of Cape Town a step closer to running train services<\/div>\n
Cape Town pushes harder for policing, rail and port control<\/div>\n

\u201cThere\u2019s a lot that can still go right,\u201d said Izak Odendaal, the chief investment strategist at Cape Town-based Symmetry, an investment manager backed by Old Mutual.<\/p>\n

Authorities now need \u201cto unlock the next level\u201d.<\/p>\n

\u00a9\u00a02026\u00a0Bloomberg<\/p>\n<\/p><\/div>\n

#Cape #Town #tests #Joburgs #longstanding #hold #economy<\/p>\n","protected":false},"excerpt":{"rendered":"

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