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SPECIAL ECONOMIC ZONES ATTRACTING BILLIONS OF RAND IN FOREIGN DIRECT INVESTMENT TO SA

Posted on: 04 May 2017

The Special Economic Zone (SEZ) Programme which is one of the critical instruments which the Department of Trade and Industry (the dti) is using to accelerate industrialisation in the country has attracted billions of rand to South Africa. The programme, which has entered a full implementation phase is a critical tool for, amongst others, the attraction of the foreign direct investments (FDIs), creation of decent jobs, establishment of new industrial centres, as well as development and improvement of the existing infrastructure.

The Minister of Trade and Industry Dr Rob Davies says to date government has a total of eight designated zones, which are Saldanha Bay in the Western Cape, Dube Trade Port and Richards Bay in Kwa-Zulu Natal, East London and Coega in the Eastern Cape, the soon to be launched Maluti-a-Phofung in the Free State, as well as the recently added Musina in Limpopo.

“The Musina-Makhado Special Economic Zone has been designated as the first zone under the new SEZ Act.  It will be established in the Vhembe region in Limpopo and will focus on four major industrial clusters which are energy and metallurgical, agro-processing, petro-chemical, and trade and logistics,” says Davies.

He adds that the new zone has so far attracted investment interest from Chinese consortium which stems from the unique combination of all aspects of the value chain in the cluster and the availability of resources in the, energy and metallurgical processing. The total investment is currently estimated at approximately R56.9 billion.

“There has been a substantial increase in the number and value of secured but not yet operational investments. The total number increased from 47 to 72 while total value increased R19.7 billion to R41.2 billion. At least 13 of these investments are expected to be operational within the next 12 months, as soon as infrastructure development is completed,” says Davies.

He highlights some of the individual achievements of the SEZ such as the R11.5 billion BAIC automotive investment and the 1,000MW under IPP, with an investment value of R25 billion in Coega, the R1.3 billion agreement with CIPLA to produce biosimilars at Dube Trade Port, the R260 million new investment covering horticulture and metal refining at the OR Tambo IDZ, as well as the 2000MW under Gas IPP awarded to the Richards Bay IDZ.

“The Special Economic Zones Act has been operational as of 9 February 2016, and the work of the SEZ Advisory Board has since started. The board is responsible for advising the minister on policy and strategy issues as well as evaluation of the new applications for the designation,” says Davies.