The Eastern Cape Economy has sustained its growth momentum of previous years, breaking through the 5% level and reaching a 5.2% growth rate for 2006/2007. This level is slightly below the national average of 5.3% for the same period. According to Statistics South Africa, the Province’s GDP-R grew by 5% in the last quarter of 2007.  (Extracted from Lukhanji LED Strategy 2008)

In the Eastern Cape Province

• The Manufacturing Sector grew by 5.7% in 2006/2007, compared to 3.3% in the 2005/2006 period, which outperforms the national manufacturing sector, which achieved a 5.2% growth rate.

• The Finance, Real Estate and Business Services Sector growth rate increased to 8.5% in 2006/2007 (mirroring national growth), when compared to the 5.1% growth achieved in the pervious period. 

• The Electricity, Gas and Water Sector had a growth rate of 3.7% in 2006/2007, which is a huge increase from the 0.4% in 2005/2006.

• Although nationally, the general Government Services Sector’s growth rate decline, the Eastern Cape Province’s growth rate for this sector increased from 3.8% in 2005/2006 to 4.2% in 2006/2007.

• The Province’s Construction Sector experienced a decline in growth rate from 11.2% in 2005/2006 to 6.5% in 2006/2007, albeit high levels of 14.7% growth rate experienced for the industry on a national level.

• The Agriculture Sector recorded a negative growth rate of 8.2%, which differs considerably from a 24% positive annual growth rate achieved in earlier decades – this decline reflects that vulnerability of the sector in the light of volatile global prices and the changing weather patterns.

• Wholesale and Retail Trade, Hotels and Restaurants, Transport and Communication Sectors of the Provincial economy declined slightly from 5.8% in 2005/2006 down to 5.1% in 2006/2007 and from 4.1% to 3% in the corresponding period. These readings reflect a similar trend in National economy.

(The following Provincial Growth Rate statistics have been extracted from www.info.gov.za)

The Chris Hani District Municipality contributes 0.42% towards the national gross domestic product. The majority of this comes from the Agriculture, Community Services, Construction, and Trade Sectors respectively. The biggest contributor to the district economy in terms of size, is Community Services followed by Trade. These remain  key contributors to the GGP and the predominant form of economic activity in most of the eight local municipalities.

The District has a comparative advantage in Agriculture (including forestry) and Services (construction, retail trade services and community services). This is despite the strong growth in the Finance, Manufacturing and Transport sectors.
 
The District economy is driven by the Community Services , Trade  and Agriculture sectors. The Transport sector achieved the highest growth rate of 4.3% between 1996 and 2005, which is highly indicative of the strategic location advantage that the district enjoys in terms of rail and road transport, and as a distribution centre for the former Transkei area. The Finance and Trade sectors have also grown significantly at 3.8% pa and 3% respectively. Whilst the mining and electricity sectors experienced a negative growth, agriculture and manufacturing outputs have been positive although nominal.

The Chris Hani District Municipality expands into the local municipalities of Emalahleni, Engcobo, Intsika Yethu, Inxuba Yethemba, Lukanji, Tsolwana, Sakhisizwe and Inkwanca. The district is located along the friendly N6 Route  and  is  the centre of Eastern Cape Province making it a central node and gateway into the natural beauty and  opportunity of the province. The town of Queenstown is also central to the district serves as an economic hub for the district population.  

Tourism

Tourism opportunities within the Lukhanji Municipality are undoubtedly enormous. A unique blend of colonial and cultural heritage adds an interesting history to the Municipality. Coupled by activities such as hiking, game-farms, bird-watching, beautiful scenery, heritage sites, historical architecture, rock paintings and sporting and adventure events, Lukhanji is certainly positioning itself as a tourism destination.  The potential in Township Tourism is growing daily, which will add a diverse and colouful element to the current basket of tourism offerings. The opportunities linked to the 2010 Soccer World Cup also present exciting growth potential for Tourism.

The Municipality is currently is the process of setting up the Lukhanji's Local Tourism Organisation as well as a fully functional Tourism Information Centre which will assist in firstly consolidating efforts within the sector and secondly support the  marketing of existing and potential opportunities. A suitable road network as well as an airport which can currently support private planes makes the region greatly accessible.

Manufacturing

Although there are pockets of manufacturing that take place around the Municipality, the majority of manufacturing activities are concentrated within the areas of Ezibeleni and Queendustria within the Queenstown area. The area has a great deal of serviced industrial land and has access to a large,  with varying levels of skills, and relatively cheaper pool of labour.

From a locational point of view, the area is ideally positioned as a break and bulk distribution hub. This is also supported by a suitable rail and road network.

Opportunities within the Manufacturing sector present themselves in terms of the beneficiation of primary / raw material found in Lukhanj, such as  leather products, wood products, hand-made crafts, packaging, processing of agricultural products as well as brick making.

Agriculture

The Lukhanji Municipality is home to a solid based of agricultural experience and skills. The sector provides large scale job creation potential in terms of production as well as agro-processing opportunities that exist in live-stock and live-stock related products, flowers and roses, vegetables, aquaculture and the like. The region has hectares of under-utilised irrigated land. These are supported by large water sources and could be used to bolster agriculture production through the farming of high-value crops. There is abundant arable land for crop production, as well as grazing which is very conducive for live-stock farming. Livestock farming is therefore the focal activity in the Lukhanji area. Improved support to the agriculture sector is likely to support growth in other sectors, especially manufacturing (in terms of agri-processing), construction, and retail and can therefore play a broader and significant regional economic stimulation role and rural poverty alleviation role.