By Tshepo Nkosi
Starting a successful industrial business has been made easier through the country’s Special Economic Zones (SEZ). These zones offer companies a head start in growing their operations and ensuring their investments are successful.
Business that set up operations within our SEZ receive lucrative incentives such as a preferential corporate tax rate, employment tax incentives and tax support on greenfield investments. They also have access to various support services such as customs controlled areas.
It means that from day one, companies that begin operating within these zones have an advantage and can generate more revenue, creating new jobs and compete successfully internationally.
Our Special Economic Zones are geographically designated areas that are set aside for targeted economic activities with the latest economic zone established in the Northern Cape. Last year Cabinet approved the designation of the Namakwa Special Economic Zone in Aggeneys, a strategic mining-town in the Northern Cape.
We see this new economic zone unlocking mining beneficiation, production of green hydrogen, infrastructure development, renewable energy and agro-processing in the province.
It has already received strong interest from various businesses attracting more than R29 billion in investments for phase one. Investments include commitments of R16 billion from Vedanta Zinc, R13 billion from Frontier Rare Earth, R200 million from Hive Energy and R100 million from RRS Trade and Investment.
We foresee the Namakwa Special Economic Zone having a substantial impact on the region’s economy as it will be accompanied by the construction of factories, and supporting industrial infrastructure such as the extension of rail and road infrastructure.
When multiple factories are established in an area, it creates a high demand for workers and support services that helps turn the tide against unemployment. It further builds thriving local communities and fosters a spirit of entrepreneurship that also creates employment. Moreover, in revitalising our local communities through these zones we are helping to reduce the amount of labour and capital leaving our outlying areas for cities.
Our Special Economic Zones also play an important role in spreading economic opportunities across the country which is central to building a more inclusive economy that benefits all South Africans. It is helping reverse the spatial inequalities created by apartheid where economic activity was concentrated only on certain areas. In establishing new industrial centres through Special Economic Zones, government is helping balance growth and industrial development
Our Special Economic Zones are helping enlarge our industrial base and transform our nation into a globally competitive industrial hub. International experience from Malaysia, China and Singapore shows that these economic areas are effective tools to enhance industrial capacity, while also boosting private sector investment.
Our other Special Economic Zones include the Coega Industrial Development Zone (IDZ) in the Eastern Cape, the largest IDZ in Southern Africa. The Richards Bay IDZ in Kwazulu-Natal is linked to the international seaport of Richards Bay while the East London IDZ, located in Buffalo City, was one of the first IDZs to be operational.
The Saldanha Bay IDZ in the Western Cape serves as the primary oil, gas and marine repair complex in Africa. The Dube Tradeport in Kwazulu-Natal is a catalyst for global trade, with a focus on manufacturing and value addition, primarily for automotive, electronics and fashion garments.
Going forward we are finalising SEZs in Atlantis in the Western Cape as a green tech-manufacturing hub and Nkomazi in Mpumalanga which is strategically located between northern Swaziland and the southwest of Mozambique.
We also have on the cards the Bojanala SEZ in the North West, also known as the Platinum Valley SEZ, which will focus on mineral beneficiation of platinum group metals. The OR Tambo SEZ, linked to the OR Tambo International Airport, is currently in expansion. It focuses on manufacture for export and use air freight for the movement of these products.
We encourage businesses and investors to consider our Special Economic Zones when setting up their business. It not only makes good business sense but offers a partnership to grow our economy and creating jobs.