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The role played by SEZs in the development of SA

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In highlighting the strategic importance of the Special Economic Zone (SEZ) programme, Dr Rob Davies – South African Minister for Trade and Industry, in his address in parliament emphasized SEZs as a “critical tool for attracting foreign direct investment, creating decent jobs, establishing new industrial centres as well as developing and improving infrastructure.”

Christopher Mashigo
Christopher Mashigo – CDC Executive Manager Business Development

For the Coega SEZ, drawing meaning to the statement is the ability to ensure the infrastructure on the ground translates to a significant impact in the lives of many workers currently employed at Coega.

The Coega SEZs key value proposition, amongst others, is the organisations ability to enable what it terms a – plug and play environment. This, the Coega Development Corporation (CDC) attains by ensuring the basic needs of both domestic and foreign direct investors are met.

“The CDC, through government has over the years ensured that it provides world class and purpose-built infrastructure to suit investor needs,” says Christopher Mashigo, CDC Executive Manager Business Development.

As validation of the CDCs offering, an independent study found that over ninety three percent (93%) of investors currently located in the Coega SEZ felt that Coega was the ideal location for industries. A further eighty four percent (84%) of those companies invested in the Coega SEZ reported an increase in profitability.

Amongst some of the reasons given by investors for locating at Coega is the SEZs proximity to the Port of Ngqura. The modern multi-user deep-water harbour is a gateway to global markets and together with the Coega SEZ are catalysts for investment and local development.

As the preferred investment destination, the CDC in the current Financial Year 2017/18 unaudited year-to-date numbers is sitting comfortably on fifteen (15) new investors with a combined investment value of five hundred and twenty six million (R526 mill). The Coega SEZ currently has forty-two (42) operational investors worth a combined investment value of seven billion (R7 bill).

Acclimatizing to a positive environment the CDC’s bolstered by the improved business sentiments in the country following the recently released Business Confidence Index (BCI) by the South African Chamber of Commerce and Industry (Sacci).

“It certainly would be amiss of us not to capitalise on the positiveness experienced in the country. As things stand the Coega SEZ has four (4) projects under construction mainly BAIC (automotive sector), Osho Cement (metals sector), MM Engineering (Metals sector) and the Customs Control Area in Zone 1 (logistics sector) accumulatively valued at twelve billion (R12 billion),” adds Mashigo.

“Furthermore, the Coega SEZ, recently saw the coming online of six (6) projects. The projects include Kenako Concrete (metals sector), Corromaster (Packaging sector), National Ship Chandlers (Food Distribution sector), Sanitech (Sanitation sector), Lension (Chemicals sector) and Fincorp Trading (Logistics sector) accumulatively valued at one hundred and ninety six million (R196 mill),” says Mashigo.

Reviling on the projects coming on stream is the more important task of ensuring bricks and mortar are converted to tangible job opportunities. It is often common course the existence of a direct link between incentive programmes and stimulating investments into SEZs and the significant spinoffs for job creation. Even the minister in his address to parliament highlights the dti’s incentive programme job-creating potential, and the importance of special economic zones.

At the Coega SEZ, the current financial year (FY) 2017/18, nine thousand four hundred and forty one (9441) construction jobs have been realised and seven thousand nine hundred and fifty three (7953) cumulative operational jobs as of quarter three. The operational jobs figures, when compared to previous FY numbers result in an increase of seven hundred and ten 710 cumulative operational jobs, compared to 7243.

“What is even more pleasing is that, more than two-thirds (75%) of the staff employed by investors at the Coega SEZ are Previously Disadvantaged Individuals and come from the Nelson Mandela Bay and surrounding areas,” adds Mashigo.

In conclusion, at the budget speech, the MEC for Economic Development Environmental Affairs and Tourism in the Eastern Cape – Sakhumzi Somyo congratulated the Coega SEZ “for being unambiguous about their [its] commitment to local beneficiation. This is in reference to the Coega SEZ enabling an environment where 78% of supplies are sourced locally,” highlighting the importance of stimulating the local economy through creating a network of local suppliers providing services to investors within SEZs.

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Alan Straton

Chief Cook, Bottle Washer and Broom Mechanic at MyPE
Passionate about Port Elizabeth and definitely NOT packing for Perth. Alan's ethos is epitomised in the words of Nelson Mandela; "I have fought against white domination and I have fought against black domination. I have cherished the idea of a democratic and free society. If need be, it is an ideal for which I am prepared to die." See more articles by Alan.