Good prospects for Special Economic Zones to attract FDI

Thursday, May 31, 2018

The Department of Trade and Industry (dti) is optimistic that South Africa’s Special Economic Zones (SEZs) will attract foreign direct investment (FDI).

The dti this week concluded an investment roadshow to Shanghai, China. Led by Deputy Minister Bulelani Magwanishe, the roadshow was aimed at wooing investors to South African SEZs.

The roadshow got underway at the weekend and gives representatives of the South African government, implementers of the SEZ Programme and SEZs an opportunity to present the value-proposition of South African SEZs to potential investors and financial institutions.

Chief Executive Officer of the Free State Development Corporation, Ikhraam Osman, said the trip succeeded in whetting the appetite of Chinese businesspeople and created interest amongst them to invest in the country’s SEZs.

“The trip presented officials from our SEZs with a golden opportunity to interact directly with the Chinese companies and present to them the value-propositions of our Special Economic Zones.

Osman went to China to market the Maluti-A-Phofung SEZ which was officially launched by former President Jacob Zuma in April last year.

“I came here to market the Maluti-A-Phofung SEZ and there is a logistics company that showed interest in investing in the SEZ. This was the first contact and it means we need to have follow-up meetings to exchange more technical information that will assist them to make a decision about investing in our SEZ,” said Osman at the conclusion of the roadshow on Tuesday.

The Project Executive for the North West-based Platinum Valley SEZ, Davis Sadike, says the trip was a success as it enabled him to understand the success that the Chinese SEZ model has managed to achieve in boosting the country’s development and economic growth.

“The interaction with the Chinese companies gave us a better understanding of their needs when it comes to investment in foreign projects.  We managed to share specific information of our SEZ with two companies that are operating in the renewable energy and locomotives sectors. A good foundation has been laid for us to explore future discussions with these companies and others that we met,” said Sadike.

Ayanda Ramncwana, who is a manager in the Chief Executive Officer’s office of the East London Industrial Development Zone, said it was critical for the dti to undertake initiatives like the roadshow in order to market the SEZs internationally as part of efforts to attract investments.

“The trip was beneficial as it provided the SEZs with international exposure that they require to woo investors. It confirmed that there is potential in trying to attract investments from China in the various sectors that we are interested in as South Africans. It also showed that synergies that we can forge with the Chinese institutions,” said Ramncwana.

The acting manager in the CEO’s office of the Richards Bay Industrial Development Zone, Zodwa Zikalala, said good feedback was received from potential investors at the roadshow.

Currently South Africa has eight SEZs - namely Coega and East London IDZs in the Eastern Cape, Dube Trade Port and Richards Bay IDZ in KwaZulu-Natal, OR Tambo IDZ in Gauteng, Saldanha Bay IDZ in the Western Cape, Maluti-a-Phofung IDZ in the Free State, and Musina-Makhado SEZ in Limpopo.

In March, former Free State Premier Ace Magashule said the Maluti-A-Phofung Special Economic Zone (MAP-SEZ) was scheduled to start with construction later that month.

At the time, he said that the MAP-SEZ was expected to produce 255 direct permanent jobs and 420 indirect jobs in 2018/19. –