Ents Alfred Nzo District Municipality strategic Agenda

Comparative advantage of Alfred Nzo local economy: Location Quotient Analysis
The location quotient is an indication of the comparative advantage of an economy. It is used to identify those local industries that are producing more than is needed for local use and selling outside the region (exporting) and those that are not meeting local needs and are a source of consumption leakage (importing). The table 2.4 below show the District’s location quotients relative to the province of the Eastern Cape
When interpreting the data, a location quotient greater than 1.0 indicates that the local economy is self-sufficient, and may even be exporting the good or service of that particular industry. On the other hand, a location quotient less than 1.0 suggests that the region tends to import the good or service.
According to Quantec regional data (2016), the Table 2.4 below shows that Alfred Nzo District Municipality’s comparative advantage relative to province is in construction, trade, Government and community services. Alfred Nzo’s disadvantages relative to Eastern Cape Province are in Agriculture, Mining Manufacturing, Energy, Transport and Finance.
But according to the IDP of the district and based on the existing economic activity, market opportunities, resources, assets and skills; the following economic sectors are of significant potential:
 Agriculture
 Forestry
 Manufacturing
 Construction and Mining
 Trade and Business Services/ICT
 Tourism
 SMME and Cooperative Development
Alfred Nzo’s location quotient relative to Eastern Cape: 2015

^L^o^c^a^t^i^o^n^quo^t^i^en^t^r^e^l^a^t^i^v^e^to Province	Alfred Nzo	Umzimvubu Matatiele Mbizana Ntabankulu
^P^r^i^mary^s^ec^t^o^r	^1^.^2^2	^1^.^1^4^1^.^2^2^1^.^0^6^1^.^9^4
^A^g^ric^u^lt^u^re Mining	^0^.78 3.59	^0^.95^0^.96^0^.45^0^.51 2.15 2.63 4.30 9.65
^Se^c^onda^r^y^s^ec^t^o^r	^0^.^5^1	^0^.^4^7^0^.^6^0^0^.^4^7^0^.^4^0
^M^a^nu^factur^in^g Electricity Construction	^0^.23 0.78 1.35	^0^.22^0^.30^0^.22^0^.05 0.55 1.13 0.68 0.28 1.28 1.44 1.21 1.60
^T^e^r^t^i^a^r^y^s^e^c^t^o^r	^1^.^1^1	^1^.^1^2^1^.^0^9^1^.^1^3^1^.^1^2
^Tra^d^e Transport Finance Government Community services	^1^.02 0.77 0.73 1.57 1.42	^0^.95^1^.26^0^.84^0^.81 0.76 0.65 0.94 0.79 0.63 0.80 0.83 0.53 1.75 1.33 1.59 1.90 1.45 1.26 1.54 1.58
^T^o^t^a^l	^1^.^0^0	^1^.^0^0^1^.^0^0^1^.^0^0^1^.^0^0

^{Source: Quantec easy data, 2016 Table 2.4}
While location quotients can help you better understand your local economy, you should not rely solely on them for decision-making purposes. Users should keep the following in mind: The location quotient assumes that local productivity (output per worker) is the same as national productivity. One interpretation of a “high” location quotient might be that a particular industry is exporting.
Tress Index Analysis: To remain competitive, Alfred Nzo District Municipality must diversify its local economy
The Tress Index measures the level of concentration or diversification in an economy. An index score of zero represents a much diversified economy, while a number closer to 100 indicates a high level of concentration. The economy of Alfred Nzo District Municipality appears to be slightly more concentrated on few industries.
Concentration or diversification of Alfred Nzo economy: Tress index over 10 industries

	1995 2000 2005 2010 2015
^A^l^fred^Nz^o	^6^4^.^4^6^3^.^5^6^0^.^9^6^0^.^8^5^9^.^3
^Um^z^i^m^v^ub^u Matatiele Mbizana Ntabankulu	^68^.6^67^.7^64^.6^63^.9^61^.9 61.7 61.0 59.2 58.8 57.3 63.4 62.0 59.5 59.8 59.1 68.3 68.0 64.5 64.9 62.8