The Eastern Cape’s special economic zones have the potential to create hundreds of thousands of jobs, but only if the government compels multinational investors to develop local supply chains rather than rely on imports, ensuring surrounding communities share in the economic benefits, industry leaders said.
Speaking at the Second International Special Economic Zone conference in Durban on Friday, Coega Development Corporation chief executive Themba Koza said communities living alongside special economic zones must be involved from the planning stage and guaranteed a meaningful share of procurement opportunities if industrialisation was to deliver lasting economic benefits.
Meanwhile, the Coega Special Economic Zone (SEZ) in Nelson Mandela Bay walked away with the top honours on Thursday and was named SEZ of the Year in Durban.
The awards ceremony was held where SA’s 13 SEZs converged over two days to attract billions back into the facilities.
The Coega Development Corporation (CDC) said the award reaffirmed its status as SA’s premier investment destination and a leading catalyst for economic growth, industrialisation and job creation.
At the conference, Koza was part of a panel alongside the trade, industry and competition department’s industrial zones programme (IZP) executive director, Lionel October, Cosatu policy unit head Tanya van Meelis and University of Johannesburg director for the centre for public policy and African studies, Prof Busani Ngcwani.
The panel discussed the key considerations policymakers and project developers should weigh before committing investment to special economic zones and industrial parks.
“For special economic zones to succeed, communities must be involved from the very beginning,” Koza said.
“An SEZ doesn’t start when it becomes operational, it starts at the planning stage.
“Local people must be part of the planning, the construction phase and ultimately the operation of the zone.
“We must be deliberate about involving local communities. It cannot happen by accident.
“SEZ operators should use their procurement power to ensure local businesses benefit from development.
“We should have a clear policy on what percentage of planning and construction spending must go to MSMEs [micro, small and medium enterprises].
“At Coega, we’ve already set aside 30% of construction spend for MSMEs, but that approach should extend beyond construction.
“At the same time, we have to prepare local businesses and workers before opportunities arise.
“We know what we’re going to build and the skills that will be needed, so we must identify those people early, train those who are interested and strengthen those who already have the required skills,” Koza said.
On developing local suppliers, Van Meelis said the ideas around how you linked some of the MSME people into supply chains were critical.
“We’ve seen where large companies have active supply chain development … an industrial engineer or a marketing person has been deployed, and it’s rapidly increased productivity and the ability to market.
“The more one can say what companies need and actively cultivate those suppliers, the better.”
For years, the government has spoken of linking SA’s special economic zones by rail to ease congestion at KwaZulu-Natal’s ports.
One of the mooted projects for this had been the Transnet southern rail corridor connecting the Tshwane SEZ to Gqeberha, where the Coega SEZ is situated.
The plan was centred around the Ford SA Silverton plant to ensure its Rangers were exported through the Port of Port Elizabeth.
However, speaking on the sidelines of the conference, trade, industry and competition department acting deputy director-general Maoto Molefane said at this stage it might not be financially viable to focus on just one OEM.
“We are trying to integrate both automotive and other sectors, such as minerals, to make the rail more profitable because we are going to take it to concession.
“Obviously, if the rail is privately driven, it has to make business sense.
“The intention is to rally other OEMs to support it so that it becomes financially viable.
“The intention is to ensure there is maximum participation,” Molefane said.
Molefane said commitments would drive the project forward.
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