New economic zones are no cure-all for manufacturing
Stumbling blocks for the success of special economic zones include legislation and alignment with other policy decisions and incentives, writes Amanda Visser
The approval of six special economic zones (SEZs) in the 2018 budget has been welcomed, but some industry players warn they are not a panacea to restore manufacturing to its rightful place in the economy. Issues that remain stumbling blocks for the success of SEZs include legislation, consistency and alignment with other policy decisions and state incentives. According to the Manufacturing Circle, which represents medium to large manufacturing companies, SA lost almost 400,000 manufacturing jobs during the 2008-09 financial crisis. In its Map to a Million document, which looks at manufacturing’s contribution to GDP, the organisation’s chairman, Andre de Ruyter, says it declined from more than 15% during the financial crisis to just under 13% in 2017. International experience shows that, at SA’s stage of economic development, manufacturing should contribute close to 30% of GDP. In the early 1980s, manufacturing contributed 24% to GDP. The aim of these economic zones is to increase tr...