Still a long way to go for special economic zone programme
Government’s special economic zone programme offers the promise of economic development. But the recent launch of the Maluti-A-Phofung zone threw into relief just how much work still has to be done
There was a feeling of déjà vu and just a hint of irony in late April when President Jacob Zuma flew in by helicopter — and amid much fanfare — to launch the Maluti-A-Phofung special economic zone (SEZ) near Harrismith in the eastern Free State. Looking tired from the burdens of office, he told an enthusiastic audience that government will kick-start economic activities in townships and rural communities by attracting direct foreign and domestic investment. Under the state’s SEZ programme, the 1,038ha zone provides "qualified investors" with a 15% corporate tax rate instead of the normal 28%, a building allowance, the 12i tax allowance to develop greenfields operations and a customs-controlled area. Such incentives were not available under the earlier industrial development zone (IDZ) programme, which government admits was largely a failure. IDZs drew little investment over the years and some lost anchor tenants after the global financial crisis hit, helped by high Eskom electricity...
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