The paper will deal with the challenges to manage economic development in an arid area. This arid province covers 30% of the geographical area of South Africa but only have 2% of the inhabitants. This challenge is enhanced by the National Spatial Development Framework (NSDP) as basis for economic development in South Africa. The NSDP is based on the number of inhabitants in an area and is also used to determine the area of “economic potential” and “poverty”. The paper will highlight the arid areas initiative in South Africa as an attempt to address these challenges.