Agriculture is the main economic activity in the town. Others of importance are private households, wholesale, retail and community and social services. No major industrial developments are taking place in Phumelela. The promotion of agri-processing plants and other value adding industries should be encouraged in order to diversify the economy of the area. Warden is thought to be an ideal area to stimulate most of these investments, because of its warehousing facilities and larger and better-managed truck stops. One of Memel’s largest industrial assets is the knitting factory situated to the north of Memel. Other industrial activities include a woodwork factory, transporters and steel works; all of which is aimed at satisfying local market needs.
Currently there are no facilities available for the development and training of skills. The promotion of skills development programmes locally are a crucial part of industrial and general employment stimulation. The utilization of existing facilities (e.g. land, buildings, and railways) for industrial promotion purposes is important.The northern boundary of the Eastern Free State forms part of the Highlands tourism route, due to its natural and scenic beauty, historical value and fairly good accessibility. The area has a tremendous potential for tourism development. The Seekoeivlei wetlands bird sanctuary forms part of the tourist attractions. A conservation area is planned between the two dams of Vrede.