The government should be bolder in its approach to making South Africa’s flagship industrial initiative at Coega in the Eastern Cape a ”sure thing”, the Democratic Alliance said on Tuesday.
The area is currently defined as an industrial development zone, DA trade and industry spokesperson Enyinna Kem-Abonta said in a statement.
However, this provides only infrastructure support and ”then hopes that investors will flock to the network of roads, pipes and phone lines”.
”A superior alternative, that will guarantee the success of Coega, is to define it as an export processing zone [EPZ].”
He said the global market for EPZs is highly competitive and investors are looking for productivity gains linked to wage advantages and other financial incentives.
”We need to implement industrial policy that makes us stand out in an increasingly competitive global investment market.
”An EPZ is an area where investors are given tax incentives and exemption from foreign-exchange control provisions, profit and dividend repatriation requirements and duties.
”Labour-intensive manufacturing is encouraged, labour regulations and workforce taxes are reduced and infrastructural incentives are provided.
”All goods produced in an EPZ must be exported out of South Africa in order to prevent seepage into the South African Customs Union,” he said. — Sapa