Eastern Cape eyes recovery with 2.2% growth by 2027

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The Eastern Cape economy is showing early signs of recovery after several years of weak growth.

However, finance MEC Mlungisi Mvoko warned that stronger economic performance will depend on disciplined spending and investment in key sectors.

Mvoko was delivering his 2026/2027 budget speech in Bhisho on Friday.

He said the province recorded growth of just 0.7% in 2023 and a 0.2% contraction in 2024. This was largely due to disruptions in rail and port operations, drought conditions and outbreaks of animal diseases.

It put pressure on labour-intensive sectors such as agriculture, manufacturing and residential construction.

“Looking ahead to 2026 and beyond, the current consensus points to a gradual domestic recovery, averaging around 1.8% nationally, with the Eastern Cape expected to achieve average growth of 2.2% over the medium term to 2027,” he said.

Our approach is deliberate. Fiscal discipline is not an option. It is a necessity

“This near-term recovery will be supported by steady improvements in electricity supply and port operations, increased public investment in infrastructure, greater policy certainty, market diversification and development of new markets through focused and effective trade diplomacy, all of which are critical to bolstering business confidence and stimulating private sector investment.”

He said stronger economic growth will depend on:

the delivery of strategic infrastructure;
improved budget execution; and
focused support for key sectors such as:

agriculture;
tourism;
the ocean economy; and
automotive manufacturing.

“As we anticipate this gradual economic recovery, it is imperative that our fiscal framework remains disciplined and strategically aligned, ensuring that every rand is directed to priority.”

He said the Eastern Cape continues to operate under significant fiscal pressures.

“Accumulated liabilities, irregular, fruitless and wasteful expenditure, and scarce resources threaten frontline services. Departments must therefore operate strictly within their approved budgets.

“Our approach is deliberate. Fiscal discipline is not an option. It is a necessity.”