Special Economic Zones to create employment and economic growth
by Ronnie van Rooyen, Bongi Hlengwa and Daveena Naicker
EARLIER this year Trade and Industry Minister Rob Davies announced plans to launch the special economic zones (SEZ) programme in a bid to stimulate industrialisation outside of Cape Town, Johannesburg, Durban-Pietermaritzburg, East London and Port Elizabeth.
The initiative aims to improve the existing industrial development zones (IDZ) programme introduced in 2000. IDZs are purpose-built industrial estates linked to international airports or sea ports and tailored for manufacturing and storing export goods. There are currently four IDZs – Coega outside Port Elizabeth, East London, Richards Bay and OR Tambo International Airport, which is not yet operational.
However, a 2007 review uncovered numerous problems with the IDZs including a design structure that favoured only a few regions given the programme is export-oriented. The SEZs, defined as a geographically designated area to promote industrial development, will expand the IDZ concept by focusing on innovation and regional development in science parks, industrial parks and sector development zones. The new programme includes different economic zone categories including IDZs and will not necessarily be export-oriented. This means they are not geographically restricted, but cover a wider range of sectors that could be developed anywhere in the country.
The department of trade and industry (DTI) is to receive R2.3 billion for IDZs and SEZs to create employment and economic growth. The DTI is working with various previously-excluded regions to identify potential SEZs in light manufacturing, agro-processing and platinum beneficiation parks. Special incentives and regulatory regimes will encourage SEZ investments and expansions and the government intends passing the SEZs Policy and Bill this year.