The Western Cape produces half the of the players of any sort of caliber.
They tend to not stay put in the Fairest Cape however.
Closely followed by Gauteng, but because geographically the Bulls, Lions, Leopards, Pumas and Valke are all so close to one another, there isn't a union up here that boasts as much about their talent pool as WP.
But there are some schools who just produce better rugby players in that the school itself is driven by the sport. Schools like Grey Bloem, Affies, Paarl Gym, Paarl Boys, Monument, Maritzburg College are just a few of the schools who on a frequent basis produce top quality players. Plus it's also about rivalries and derbies. I think the Cape Schools have a much better derby system than the schools up north. I know of a bunch of schools who for example refuse to play against teams like Affies or Monument, for fear of having huge scores and the kids getting hurt.
And that's where the size of the schools and the amount of kids playing rugby has been factored in, in tournaments such as the Virseker Trophy, where schools of the same size play against each other.
This has also caused a lot of old rivalries to die off, as some schools just can't compete against the elite schools anymore. Prime example is in my hometown. We have 2 prominent rugby playing schools, but the technical high school went through a bit of a slump in the past, and for more than 10 years the schools didn't play rugby against each other because the technical school's teams lost by margins over 50 from age groups 14y/o to 1st teams.
3 years ago the rivalry was restarted after many former players who are now parents, demanded that the derby day be reintroduced as it was a big event for the town, and had a lot of social implications attached to it, in a campaign to get more people involved with school activities who didn't necessarily have kids in either school. The margins of victory is still considerably high, but it does seem that the technical school is starting to make a lot of progress.