The Coega Development Corporation (Coega) anticipates an encouraging view on energy, infrastructure development, continental trade, and foreign direct investment (FDI), ahead of the 2024 State of the Nation Address (SONA) that will be delivered by His Excellency, President Cyril Ramaphosa, on Thursday, the 8th of February 2024, in Cape Town.
Against the backdrop of last year’s SONA, Coega looks forward to an update on the country’s collective progress on the targets that were set in 2023 and an overview of the socio-economic and energy-related challenges that may have hindered progress, as well a clear directive on the developmental trajectory for the year ahead.
As one of the country’s leading development agencies, Coega acted swiftly in response to the SONA 2023 energy focus, by announcing the approval of the Coega Special Economic Zone (SEZ) Energy Strategy in February 2023, which is currently under implementation. The Coega SEZ Energy Strategy identifies options to manage the energy supply, demand, efficient usage, and investment in current and new energy technologies in a manner that is institutionally sound, socially acceptable, and cost-effective.
As a result, Coega anticipates a sustained urgency on energy initiatives in the SONA 2024, as the expansion of energy generation capacity is vital to attracting, and more importantly, retaining, FDI in the country. A call by the President to bolster energy generation efforts and investment may be a step towards accelerating the ongoing rollout of Coega’s solar energy projects and other transformational catalytic energy projects.
Coega anticipates further feedback on the implementation of South Africa’s Economic Reconstruction and Recovery Plan (ERRP), Operation Phakisa and related structural reforms that were designed to pursue infrastructure-led economic recovery, and fast track development and overall job creation. The ERRP called for aggressive infrastructure investment enabled by the mobilisation of resources and skills development, amongst others, designating Coega as an Implementing Agent (IA) for the realisation of key infrastructure projects to ensure sustainable and inclusive economic growth.
In the last year alone, Coega, in its capacity as an IA, has launched several infrastructure projects with the Department of Education and the Department of Health including the R680m Sipetu District Hospital in the Eastern Cape and the R50m Bhevu Senior Secondary School in KwaZulu-Natal, creating job opportunities and training for local companies and community members.
A focus on water infrastructure is also expected, specifically in regard to the maintenance of critical infrastructure by provincial and local spheres of government.
In terms of FDI, Coega anticipates SONA 2024 to reflect on the positive result of foreign investment attraction over the last year despite a local economic outlook marked by fiscal strain, global geopolitical fragmentation, and uncertainty leading up to the 2024 national elections, which are likely to impact business and investor sentiment.
Looking at recent investment trends, it is important that entities with a keen interest in investment attraction, such as Coega, direct focus to supporting emerging industries and enabling brownfield investment.
In terms of job creation, a focus on skills development towards the furtherment of entrepreneurial activity is anticipated.
In terms of continental trade, this past month also saw the historic launch of preferential trade under the African Continental Free Trade Area. Coega looks forward to the President addressing this development, which is intended to unlock economic growth by offering South African exporters the opportunity to access key markets in the African continent beyond the Southern Africa Development Community whilst providing access to South African markets for other African countries.
From a Coega perspective, preferential trade increases the potential of the Coega Africa Programme portfolio as well as the Coega Special Economic Zone (SEZ) as a prime investment location owing to its proximity to the deepwater Port of Ngqura.
While perspectives on the country’s economic, social, and political condition are wide- ranging, Coega will continue its work in advancing socio-economic development against the backdrop of investments to the value of R440m since the start of the 2023/24 financial year; diverse infrastructure project appointments across the country; and the ongoing facilitation of demand-based skills development and training programmes.
In conclusion, as a preferred investment destination in Africa and a leading SEZ on the continent, Coega remains cognisant of the investment target set out by national government to mobilise more than R2 trillion by 2028, and the organisation looks forward to the 6th South African Investment Conference taking place on 19 March 2024.
To date, Coega has 58 operational investors with a total investment value of R11.56 billion.
