If you ask the Cape Party, the Western Cape would do just fine if it seceded from the rest of South Africa.

They’re not the only ones who have touted the idea and, over the years, many have wondered how the Western Cape would fare financially if it were to drop the rand.

A new study conducted by IG Group, in collaboration with the London School of Economics, has plotted what would happen in such a scenario, dubbing the new currency the Cape Rand.

The long and short of it –  the study concluded that it would be able to improve existing economic advantages.

Let’s take a closer look at why that might be the case via BusinessTech:

According to IG Group, the Western Cape is the most economically developed region of South Africa and has one of the highest regional GDP per capita.

“The South African rand is used within both developed and developing regions of South Africa. In contrast to other parts of South Africa, the province is not reliant on mineral resources that follow global commodity cycles (eg diamonds, gold, coal),” it said.

And of the strength of the province as an independent area, the report argued that it is administratively and politically the most developed area in sub-Saharan Africa.

It has the largest share of non-resource-based exports in South Africa [and] It has a very good education system and is home to the some of the country’s best universities.

In terms of GDP, the province is second only to Gauteng:

If the Western Cape was to break away and create the Cape Rand, it “could enable the region to position itself as a base for higher value-added manufacturing”:

“Depreciation of the new currency could allow the province to protect new industries while they gain a foothold in global markets.”

If this were to happen, the study said that it would have major ramifications for the political and economic situation in South Africa.

Author of the report, Dr Robert Hancké, an associate professor of political economy at the London School of Economics, said: “losing the wealthiest and politically most significant part of the country would be a devastating blow for South Africa.”

“A declaration of monetary sovereignty by the Western Cape would almost certainly lead to conflict with the other provinces in South Africa.”

Why not go one better and put up a border? Can you imagine the queue of angry Vaalies at the border come December? I reckon we implement a control check for creatine and other boytjie supplements, ban that lot, and let the rest in.

Ultimately, would it be worth the bother for the Western Cape to declare sovereignty?

“Since the South African rand is not a strong currency – it has halved in value against the dollar since 2010 – the gains from an independent currency would likely be very small for the Western Cape,” the report said.

If there is one thing us Capetonians hate, it’s putting in lots of effort for little reward.

Looks like you’re stuck with us, South Africa, and us with you.

[source:bustech]