/ 9 October 2015

Open for business!

Open For Business!

The Free State is alive with promise and this breadbasket of South Africa will soon be uplifting its citizens by attracting global investment. In October this year the inaugural Global Investors Trade Bridge was married with Macufe, its cultural highlight — which first started in 1997 and is now its most important tourist attraction of the year.

The objectives behind this trade bridge is to both highlight what the Free State has been doing to attract investment from all over the world and bring together local government with international representatives to report back on the progress that has already been made.

Themed “Pursuing investment growth”, the trade event was coupled with an exhibition for entrepreneurs and attended by ambassadors and representatives from Spain, India, China, Germany, Lesotho, Angola, Botswana, Zambia, Turkey, Bulgaria, Belarus and Russia. Additional programmes and initiatives also extend to Mozambique, Zimbabwe, Cuba and other countries.

Partnerships with these countries encompass a wide spectrum of industries, from education to agriculture, infrastructure, mining and tourism.

Free State Premier Ace Magashule said: “This is a province of unlimited possibilities, with high investment potential. We have invited high-level representatives to our shores to strengthen our partnership for the development of the Free State province through investment.

“The adverse impact of the economic slowdown in major markets around the world compelled us to change the game in order to respond to high levels of unemployment and inequality. This year, we are celebrating 60 years of the Freedom Charter, the foundation of our democratic and non-racial value system. This celebration serves as a reminder of our pursuit of economic freedom, poverty eradication and jobs for our people.

“As a country, we have developed the National Development Plan to advance the values of the Freedom Charter by seeking to eliminate poverty and reducing inequality by 2030. For the country to achieve sustainable and long-term development, more foreign investment is required.”

Magashule said that partnerships with other countries are not new and that some stem back to the dawn of democracy, but that it is imperative to further engage and evaluate progress. He said that the invitation extended to the parties was with the intention to increase productivity and enhance global competitiveness. This proactive approach stems from the belief that increased collaborations and partnerships in the form of sharing skills, expertise and knowledge to develop products and services will make a significant difference to the lives of Free State citizens.

“In line with the African Union policy framework for the development of Africa, we want our global partners to take advantage of the huge potential in our province for sustainable economic growth through investment in its development. The province has identified its priorities and most certainly requires partnerships in their implementation.”

“The objective of the expo is to unequivocally present our province as an investment destination and a key player in South Africa’s economy. During the expo, investors will be introduced to significant untapped opportunities in the Free State, waiting to be explored. A varied sector base of entrepreneurs, supported by a team of experts, will showcase some innovative business ideas and products and investment opportunities in our province,” said Magashule.

Cutting through red tape

“We are changing the game to provide you with an open and fair environment to do business with ease in the Free State. We are fully determined and enthusiastic to attract investment and are determined to cut through the red tape to make doing business with the Free State as easy and uncomplicated as possible. 

“We pledge to our prospective investors an open and fair environment with less regulatory burdens and the Free State Provincial Government undertakes to support all foreign investors with the approved legal policies related to trade.

“We are endowed with an abundance of rich natural resources, excellent infrastructure and the most developed telecommunication network in Africa. We have land and our agricultural commodities cultivated in significant volumes, and display opportunities for value-chain development commodities such as maize, sunflower, wheat, soya beans, sorghum, groundnuts and others.

“Important road and rail links traverse the province, including two of the busiest national highways, the N1 between Cape Town and Johannesburg and the N3 between Durban and Johannesburg.

Other routes include the N5, the main route between KwaZulu Natal, Gauteng and Free State, the N6 — the main route between Gauteng and the Eastern Cape via Bloemfontein and the N8 linking the Free State with the Northern Cape and Lesotho. Indeed, you cannot go into many provinces in the country — whether you drive or fly — without traversing the Free State.”

The Premier said that in Bram Fischer International Airport, the province boasts a world-class facility that caters to more than 400 000 passengers and 20 000 air traffic movements per annum, with the majority being business travellers.

He stressed that the Free State province with its excellent infrastructure, education, banking and medical facilities, competitive land and building costs, low factory rentals and abundance of natural resources including gold, coal, salt and limestone plus its profound agricultural base and tourism opportunities including significant cultural heritage sites and natural beauty, make it an ideal destination for foreign investment.

He also could not resist adding that the warmth and the hospitality of the Free State’s people are “priceless”.

“Strategies have been developed to mitigate the effects of the challenges on this province’s society and we have identified potential sectors to revitalise our economy and create sustainable employment,” said Magashule. “Extensive consultations with various stakeholders have taken place to focus on threats and opportunities in these sectors in order to create packages suitable for foreign investment. There is enormous scope for new investment in our province, including joint ventures.

“This Trade Bridge provides the platform to meet and interact with a hybrid of entrepreneurs, including new entrants to the market. Some have great business ideas while others have already developed products and need to expand. In most cases they lack finances and proper infrastructure to take their business to the next level. This is the group that will require partnerships or joint ventures with international traders and the private sector to ensure their development, growth and competitiveness.

“Per the national and provincial mandate, we aim to transform our economic landscape while simultaneously creating significant numbers of new jobs and strengthening the delivery of basic services. The plan also supports the integration of African economies. These investments will improve access for Free Staters to healthcare facilities, schools, water, sanitation, housing and electrification. 

“Investment in the construction of ports, roads, railway systems, electricity plants, hospitals, schools and dams will contribute to faster economic growth. The province has a high potential to grow and its central location in the country and the continent offers a variety of opportunities,” said Magashule.

People-to-people relations

“In addition, investment in major government initiatives and other projects in the province would afford investors access to millions of consumers, not only from the Free State province but from other parts of this country.

“Already, international partnerships have enabled the province to establish direct province-to-province co-operation in education, health, public works and infrastructure to name but a few.

“The hosting of this Investors Trade Bridge comes shortly after us hosting a successful China Week, the purpose of which was to celebrate the successes we have achieved in our co-operation, both in our people-to-people relations and in engagements between businesses and industries in our two countries and provinces. We are proud to announce that these initiatives have delivered tangible results, such as the Xhariep Fish Hatchery. 

“Partnerships are indeed crucial in the economic development of this province and the expansion of businesses. The Free State will provide your companies with all the necessary support to grow and expand. In the Free State you are assured of a highly skilled workforce and a commitment to lessen regulatory burdens, and this makes for an attractive province [in which] to do business; it offers a plethora of projects with the potential to expand.

“The Free State is open for business,” he concluded.

Investor incentives

Premier Ace Magashule underlined the province’s commitment to attracting investors, saying that this commitment has driven the Free State to improve its approach to doing business: with ease, and on an ongoing basis. The package of incentives to facilitate private sector investment and propel industrialisation includes:

• The Municipal Infrastructure Grant, which is accessed by municipalities to fund critical social and economic infrastructure projects in municipalities;

• In support of the N8 corridor development municipalities, Mangaung Metro also offers incentives such as reduced rates and taxes as well as payment holidays on rates and taxes for a fixed period of time;

• Municipalities can also lease municipal land, particularly to manufacturing companies, at reduced rates or non-market-related rates. Over an agreed period of time these rates will increase and become market-related;

• The Department of Trade and Industry’s (DTI) infrastructure-related incentives include the Critical Infrastructure Programme, which gives back to the investor up to 30% of the cost of the infrastructure investment, covering areas such as the building of roads and railways as well as the installation of pipelines and transmission lines. This incentive is capped at R30-million;

• The DTI also administers the Manufacturing Investment Programme, which incentivises especially manufacturing firms to set up capital infrastructure projects. There is also the foreign investment grant, which supports industrialists when bringing capital assets acquired abroad into the country;

• The South African Revenue Services (SARS) is offering incentives for upgrades in urban areas, as well as infrastructure developments in industrial precincts. It also makes provision for depreciation allowances that refund some of the costs incurred in effecting improvements on land and buildings;

• There are building construction allowances and allowances on commercial properties, new or unused;

• Provision is also made for urban development allowances which cover up to 20% of infrastructure development costs in urban areas; and

• The National Treasury also offers incentives under the Neighbourhood Partnership Programme which makes funds available to municipalities for purposes of upgrading under-developed areas and areas experiencing urban decay, with a view to attracting private sector investment into those areas.