The impact of the Saldanha Steel Project on the West Coast economy

Abstract

This article reports the results of a study which evaluated whether the erection of the steel plant at Saldanha/Vredenburg supports the main objectives of the SDI programme and has resulted in sustainable growth for the region. It investigates the reasons for locating the steel plant here and factors which may affect the long‐term economic success of the plant. It also records the experiences of business people in the region on the impact of the investment on the area's economy to date and their perceptions of its likely impact in the future. From a national perspective, it asks whether the growth in foreign exchange earnings and the extension of a waning industry's lifespan is enough to justify public sector investment in the infrastructure at Saldanha Bay. On a local level, it probes and reports on the extent to which the erection of the steel mill spurred further growth via an enlarged set of activities, higher average productivity, higher savings, and improved actual and expected prospects for earning income.

Notes

Lecturer, School of Economics, University of Cape Town. The research assistance of Lee Ruthenberg is acknowledged.