The Karoo economy is entering a period of change

The Karoo economy of 2046 is unlikely to be built around one dramatic new industry. It will probably grow through a mixture of renewable energy, specialised agriculture, tourism, science and services linked to the region’s major transport routes.

The starting point is modest. The Western Cape Treasury’s 2025/26 Municipal Economic Review and Outlook valued the Central Karoo District economy at R4.6 billion in 2024. The economy supported 19,159 formal jobs and contributed only 0.5% of Western Cape economic output.

Those figures don't cover the whole Karoo, which also stretches into the Eastern Cape, Northern Cape and Free State. They still offer a useful picture of an economy with heavy dependence on a few sectors and considerable room for diversification.

Energy will attract the largest investments

The strongest growth prospects are in renewable energy in the Karoo. Abundant sunlight and strong wind resources have already attracted solar and wind developers.

Mulilo reached financial close on a 380MW solar facility near Beaufort West in April 2026. The company expects the plant to generate around 818 gigawatt-hours of electricity a year, with a contracted export capacity of 250MW.

The wider development pipeline is even larger. A proposed 720MW Nuweveld wind development north of Beaufort West has been planned as three 240MW facilities, along with a transmission line of about 100 kilometres.

South Africa’s national grid expansion strengthens this trend. The National Transmission Company South Africa estimates that nearly 14,500 kilometres of new high-voltage lines and 210 transformers will be needed by 2034.

The Karoo is likely to host part of this infrastructure, which will in turn create demand for construction, transport, accommodation, security and technical maintenance. The difficult question is how much value will remain after construction teams leave.

Renewable projects generally create far fewer permanent jobs once operational. Towns will benefit more if local businesses win supply contracts while residents receive training in electrical work and plant operation.

Agriculture will need to sell more than raw products

Agriculture will still be central to the Karoo economy, although growth is unlikely to come from simply placing more animals on the veld. Climate pressure and limited water make large increases in livestock numbers risky.

The better opportunity comes from earning more from what the region already produces. This could include certified wool processing, spinning, weaving, speciality meat products and indigenous plant cultivation.

Local processing matters because raw products usually leave the region before most of their value is added. A fleece sold out of the district supports less local employment than wool that is cleaned, spun and turned into clothing or household goods nearby.

Technology will also remake farming. Solar-powered water systems and improved weather information can reduce costs while helping farmers respond faster to drought and veld pressure.

Agriculture may not become the fastest-growing sector, but it can become more productive and support more small businesses around it.

Tourism has room to grow slowly

South Africa welcomed 10.5 million international tourists in 2025, up 17.7% from 8.9 million in 2024, according to Statistics South Africa. The Karoo is in a good position to capture part of this growth through nature, heritage, food and astronomy.

The Central Karoo tourism data reveals a weakness as well as an opportunity. In 2024, 72.5% of international visitors and 63.8% of domestic visitors stayed for only one day.

Future growth in Karoo tourism depends on turning short stops into longer stays. Fossil sites, farm experiences, dark-sky tourism, festivals, walking routes and heritage buildings give visitors a reason to stay for two or three nights.

Tourism will not rescue every town. Poor roads and neglected public spaces can quickly weaken a destination. Growth will depend on maintaining the places travellers have come to see.

Science could build a different kind of economy

The Square Kilometre Array near Carnarvon offers the Karoo something unusual, a place in the international science and technology economy.

In 2022, the SKA Observatory awarded a R890 million contract for power, fibre and road infrastructure at the South African telescope site. By the end of 2025, the first seven SKA-Mid dishes were standing as construction continued.

The long-term value lies beyond the construction contract. Astronomy can support technical training, software development, data work, school robotics and specialised maintenance.

Matjiesfontein’s role in NASA’s Lunar Exploration Ground Sites programme adds another science connection. These facilities will not employ entire towns, but they can create skilled career paths that were previously difficult to imagine in remote communities.

Transport and local services will be essential

Beaufort West and Laingsburg sit on the N1, one of South Africa’s most important freight and passenger routes. This gives them an economic advantage that cannot be recreated elsewhere. Better broadband could also allow more professional and administrative work to be carried out from Karoo towns.

None of these sectors can grow reliably without functioning municipalities. Water security, roads, electricity, waste collection and internet access are economic infrastructure, not background concerns.

The future will therefore depend on what happens around major investments. A solar farm that imports its workforce and equipment changes the skyline without transforming the town and a project that develops local suppliers, skills and services can leave a much deeper footprint.

The Karoo’s next economy will still be defined by land and distance. The region's best chance lies in using those qualities more intelligently, while seeing that the value created across the region also stays there.

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