Over the past five years (roughly 2020-2025), the Western Cape experienced a net gain of over 200,000 people from inter-provincial migration (or 40,000 per annum). Specific net figures do vary, however, by source and exact timeframe. While the precise figure isn't a single number set in stone, reports from Statistics South Africa (Stats SA) and related analyses show a consistent trend of net inward migration. One report estimates a net gain of approximately 294,029 people between 2018 and 2023. In the context of net migration to all of South Africa in 2024 of 166,972 immigrants (27% decline YOY), this statistic strongly supports the positive growth story of the Western Cape.
Population density outside of the Cape Town metropole is sparse, driven in part by the somewhat inhospitable Karoo fynbos and Cape Fold Mountains together with a relatively low winter rainfall pattern, contrary to much of the rest of Africa, including South Africa.
Cape Town is one of the world’s most captivating tourist destinations, celebrated for its breathtaking natural beauty, cultural richness and vibrant city life. Global recognition of the Cape’s attributes is well known and it is regularly voted in at least top 10 global tourist destinations. Between the iconic Table Mountain and the sparkling Atlantic Ocean, the city offers a unique blend of adventure and relaxation. The province has received accolades for its wines and tourists will travel long distances to see the mountains, oceans and wildlife.
However, there is increasing recognition of the Cape being a viable alternative for newer or emerging industries. One of which is call centres (friendly time-zone, strong proficiency in the English language and globally competitive pricing on a par with India). The city has also become a sought-after film industry destination for both international and local productions. There is increasing use of fading textile industry premises as well as purpose built permanent film sets in Hoogekraal outside Durbanville and Faure outside Somerset West which have been used for blockbuster productions including Outlander, Redeeming Love and One Piece.
It is also recognised as Africa’s Silicon Valley and tech-startups in Cape Town span diverse sectors, including fintech, AI and agritech, with prominent examples like Yoco and Luno (Fintech), iiDENTIFii (AI-based Identity), Plentify (AI for Building Management) and Aerobotics (Agritech), Other notable companies include Jem HR (HR tech), H2O Securities (blockchain for water) and Ozow (specializing in online payments).
The Western Cape's economic growth was 0.7% in 2023 and remained at 0.7% for 2024 whilst projected growth of 1.8% for 2025 may be too optimistic.
Factors contributing to growth:
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Finance sector: This sector is a significant contributor to the province's growth.
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Community services and transport: These sectors also showed positive growth contributions.
The Western Cape has consistently shown a trend of outperforming the national economy.
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The province boasts the lowest official unemployment rate in South Africa, with a rate of 19.6% in Q4 2024.
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The Western Cape Government has implemented strategies like the SMME Booster Fund and the Red Tape Reduction Unit, to reduce barriers for small businesses and foster economic growth.
Key Drivers of Growth
- Finance, real estate and business services:
This sector is the largest contributor to the provincial GDP and has shown positive signs, particularly in the Garden Route and Overberg regions.
- Agriculture, forestry and fishing:
This sector has shown impressive growth and exports, with strong performances in citrus, grapes and stone fruits – all driving growth.
- Tourism:
According to Invest Cape Town, following the COVID-19 pandemic, the tourism sector experienced a significant surge, with a busy festive season and a thriving visitor economy benefiting various industries.
- Transport and community services:
These sectors have also made positive contributions to the province's economic expansion. The addition of Cape Winelands Airport with a capacity for international flights, slated for completion (subject to final approvals) in 2028, will provide significant additional tailwinds to the pace of economic growth in the province.
- Manufacturing and construction:
While facing global challenges, these sectors, especially in regions like Overberg and the Garden Route, have shown healthy growth.
Factors contributing to resilience and confidence
- Strong business confidence:
Business confidence in the Western Cape has consistently outperformed the national index, even amid global uncertainty.
- Strategic planning and governance:
Effective provincial governance and strategic economic planning have been highlighted as factors contributing to the province's resilience and economic growth.
- Diverse economy:
The province's diverse economic base helps it withstand economic headwinds better than more specialised economies.
Overall trend
- The Western Cape has shown resilience and a leading role in the national economic recovery, with a more optimistic growth outlook compared to the national average in recent years.
OLEA’s new branch in Cape Town is a reflection of this optimism and is well positioned to support a diverse clientele across all market sectors, whilst retaining specific focus areas such:
- Financial institutions
- Manufacturing
- Property owners/managers
- Medical and hospitality industries
- Multinational/Group programmes
OLEA can support multinationals who require a significant network of owned broker operations throughout the continent. This to co-ordinate the issue of local policies that are fully compliant with local regulatory requirements, whilst ensuring congruence with Group policy limits and coverage.
Kieren Vels - Regional Executive Head: Western Cape
