On the job: Trade and Industry Minister Rob Davies believes that special economic zones accelerate economic development through greater investment, export volumes and job creation. Picture: SUPPLIED
On the job: Trade and Industry Minister Rob Davies believes that special economic zones accelerate economic development through greater investment, export volumes and job creation. Picture: SUPPLIED

The Department of Trade and Industry is expecting to launch a special economic zone focused on agro-processing at Nkomazi in Mpumalanga, while another one on the platinum belt near Rustenberg in the North West is also in the pipeline.

Further into the future a special economic zone envisaged for Upington in the Northern Cape will be a solar manufacturing hub. Another is earmarked for Mthatha in the Eastern Cape as an agro-processing and tourism hub; and Gauteng is set to get a zone with a focus on the science and high-tech industries.

Tubatse, in Limpopo, will be the site of a special economic zone targeting platinum group metal beneficiation and the supply of mining inputs.

Last week, the Cabinet approved the Atlantis special economic zone.

Only the North West and the Northern Cape do not at present have special economic zones, says trade and industry director-general Lionel October.

Other zones include Coega in the Eastern Cape, Dube Trade Port and Richards Bay in KwaZulu-Natal, Musina-Makhado in Limpopo, Saldanha Bay in the Western Cape, Maluti-a-Phofung in the Free State and OR Tambo in Gauteng.

Representatives from all the zones visited China last week to market their zones and learn from the Chinese experience.

The Chinese have been providing training and skills development to the special economic zone programme.

Eventually each province will have at least one economic hub, which is meant to accelerate economic development through greater investment, export volumes and job creation.

Steady progression

Trade and Industry Minister Rob Davies believes that to date special economic zones have been successful in achieving these aims.

"There is a steady progression of investments and employment in most of the special economic zones that we have created.

There are some significant investments that are emerging in Coega and in Musina-Makhado," he says.

Operational investments of R11bn have already been made in the eight operational special economic zones with secured but not yet operational investments totalling R52.2bn.

This excludes the investment pipeline by 43 companies worth R16bn in Saldanha Bay and investments worth R126bn by 10 companies in Limpopo’s Musina-Makhado special economic zone.

Direct jobs created to date total 13,722.

Cheap land

Major investments have included the R11bn investment by the Beijing Automotive Industry Corporation in Coega.

The zones offer a variety of benefits including a 15% tax rate, accelerated depreciation allowances, cheap land, a one-stop investment shop and sound infrastructure. The government also assists in the construction of factory buildings. But the zones do not offer any exemption from labour laws.

Synergies are created where a zone has a specific focus, such as metallurgical goods manufacture in Musina-Makhado in Limpopo, oil and gas services in Saldanha Bay or green technology in the recently designated Atlantis zone.

The designation of Atlantis outside Cape Town as a special economic zone is intended to promote industrial development along the West Coast corridor.

It will focus on the manufacturing of "green technology components and services", such as solar photovoltaic components; wind turbine blades and towers; solar water heaters; basic components; smart meters; rooftop photovoltaics; biomass components; waste-to-energy components; and batteries and other photovoltaic storage components.

Davies says: "The designated Atlantis special economic zone has significantly attracted investments of over R680m in the form of green-tech industrial component manufacturers, which are anchored by an international foreign direct investor.

"This investment has added about 500 direct jobs in the Western Cape’s economy."

ensorl @businesslive.co.za

Please sign in or register to comment.