The Minister of Trade and Industry, Dr Rob Davies says ten potential Special Economic Zones (SEZs) have been agreed upon with provinces. He told the Portfolio Committee on Trade and Industry in Parliament on Friday, that these potential SEZs must still go through a feasibility study to determine their viability. The Department of Trade and Industry was presenting the Special Economic Zones (SEZs) Bill to the Portfolio Committee.
The main objectives of the SEZ Bill, amongst others, are to provide for the designation, development, promotion, operation and management of Special Economic Zones; and to provide for the establishment of the Special Economic Zones Board.
Minister Davies says the SEZs will promote socio-economic benefits and creation of decent work.
‘The purposes of the SEZs include facilitating creation of an industrial complex with strategic economic advantage for targeted investment and industries in manufacturing sector and tradeable services. This will also focus on developing infrastructure to support development of targeted industrial activities and attracting foreign and domestic direct investment,’ he said.
There are different categories of the SEZs that South Africa will make use of, namely:
- A free port;
- A free trade zone;
- An industrial development zone; and
- A sector development zone.
Davies told the Committee that the Industrial Development Zones (IDZs) will continue to be one of the elements of the Special Economic Zones (SEZs).
‘The Department’s IDZ programme was initiated in 2000 and four zones were designated, with three currently operational: Coega (Port Elizabeth), East London and Richards Bay. The IDZs including the current ones are types of the SEZs and once the new the Act is passed they will form part of the Special Economic Zone programme,’ added Davies
He also mentioned to the committee that the existing industrial development zones (IDZs) were beginning to gain traction because of the way they were managed and promoted. He cited the example of the East London IDZ, which had a private sector investment of R600 million in 2009 compared to R4bn in 2012/2013.
Work under the current IDZ regulations include the Saldanha Bay which is about to be designated.
The Saldanha Bay Feasibility Study published in October 2011, found that there was sufficient non-environmentally sensitive land upon which an IDZ development could take place.
Total direct and indirect jobs are expected to amount to 4 492 in the first year, 8 094 in the second year, 7 274 in the third year, 10 132 in the fourth year and 14 922 in the fifth year. From the seventh year around 14 700 direct and indirect jobs would be sustained in the province as a result of the IDZ.
The study also found that Saldanha Bay is an ideal location for the development of an Oil & Gas and Marine Repair Cluster. The Port of Saldanha Bay is also competitively located between the oil and gas developments on the West Coast of Africa, as well as the recent gas finds on the East Coast of Africa.