South Africa’s special economic zone programme has attracted R14.8 billion in revenue and created more than 30,000 jobs, according to Deputy President Paul Mashatile
Image: Supplied by DTIC
South Africa’s special economic zone programme has attracted R14,8 billion in revenue and created more than 30,000 jobs, according to Deputy President Paul Mashatile.
The Deputy President was referring to a World Bank report while he was speaking on Friday at the Second Annual International Special Economic Zone (SEZ) Conference in Durban. Minister of Trade, Industry and Competition (DTIC) Parks Tau was also a speaker on Friday.
Mashatile said that Durban is the leading marine gateway in sub-Saharan Africa, with the Port of Durban as its centrepiece. “The city is a critical node between the industrialised interior, particularly Gauteng, and the global markets, handling a large proportion of South Africa’s sea-borne goods.”
Mashatile added that the legacy of strategic infrastructure and industrial development is exemplified by the Dube TradePort and the Durban SEZ. “These initiatives are driving investment, innovation and economic transformation, particularly the linking of the Dube TradePort with King Shaka International Airport and the Port of Durban, which handles more than 60% of South Africa’s container traffic.”
Mashatile said that a World Bank study has concluded that South Africa's SEZ programme has proved successful so far and has created more than 30,000 jobs across sectors like automotive manufacturing, agro-processing and renewable energy.
“Key benchmark projects, such as the Tshwane Automotive Special Economic Zone (TASEZ) and the Coega Industrial Development Zone in the Eastern Cape, serve as primary drivers for skills development and downstream supply chains,” said Mashatile.
Mashatile added that they have learned valuable lessons since Coega was designated in 2001. “By 2010, the government had invested more than R3bn in Coega alone, attracting 21 investments valued at R9,2bn and generating 2,837 operational jobs. However, some of these investments were not new but had relocated from elsewhere due to weakened municipal service delivery and township integration, leading to zones risking becoming enclaves.”
Mashatile said that in response to this, in 2012 they shifted to Special Economic Zones under the SEZ Act. “Today, under the leadership of President Cyril Ramaphosa, we are entering a third phase: the Spatial Industrial Development Strategy. To ignite manufacturing-led industrialisation, the South African government has identified key economic sectors.”
Mashatile added that the new Spatial Industrial Development Strategy demands that they reference every new zone against six layers:
Mashatile said there are 5,400 SEZs globally competing for the same capital. “We cannot compete simply by being the cheapest. We compete by being the most strategic, the most reliable, and the most inclusive. To our SEZ CEOs: Your performance will be measured every five years. Not on glossy brochures, but on actual jobs and exports.”
Tau said that the dtic has recalibrated its focus through the Cabinet-approved Industrial Development Strategy (IDS), which is a calculated strategic response to the country’s conjunctural economic challenges.
“It responds to these colliding challenges through three pathways: decarbonisation, the transition of industrial production toward low-carbon technologies and cleaner energy systems; diversification, the expansion of our manufacturing base and export markets; and digitalisation, the embedding of productivity-enhancing technology across industries.”
Tau added that SEZs as drivers of industrialisation have been well established. “The global evidence for this instrument is well established. More than 7,000 SEZs operate worldwide. In China, national-level SEZs contribute 22% of GDP, 45% of foreign direct investment and 60% of exports.”
“South Africa's own record, while smaller, is real and has untapped potential. Thirteen SEZs are designated across eight provinces. Two hundred and twenty-four companies operate within them, with a combined investment of R31,7bn — a net increase of R17,2bn over eight years,” he said.
Tau said the SEZ Conference takes place at both a challenging and an opportune moment. “South African goods now face a more competitive global market due to increasing trade barriers such as tariffs and trade remedies disguised as environmental policy. That is not a reason to retreat from export-led growth. Instead, it is a reason to diversify where our exports go.”
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