/ 26 July 2019

Creating positive solutions for South Africa

SEZs encourage growth
SEZs encourage growth, which has a knock-on effect on the region and its citizens



Special Economic Zones (SEZs) are areas set aside for the development of specific, targeted economic activities that are designed to further economic development and growth in the country. These growth engines are part of the government’s strategic objectives for industrialisation, regional development and employment creation.

Chief executive of the Gauteng SEZ Seipati Mangadi explains: “The primary goal of the government is to establish optimum conditions for private initiatives to develop businesses and create positive externalities. These include export development and diversification, supply chain development, higher value economic activities, sustainable job creation and inclusive wealth creation.”

This is just one part of the Gauteng SEZ that aims to contribute towards the realisation of radical economic transformation, the modernisation of the economy and the re-industrialisation of Gauteng.Another aspect of the venture that is of critical importance to the South African economy is employment. The Gauteng SEZ has directly influenced job creation in the region, with more than 3 000 jobs created over three different precincts.

The OR Tambo International Airport SEZ has its value proposition centred around its competitive location and its proximity to the airport. The ORTIA is located in a prime are for regional development and provides local and international companies with a gateway into the region. It allows for them to take advantage of numerous incentives offered by the programme and the location of the zone. This SEZ is focused on the manufacturing and export of high-value, low-mass products. Alongside these initiatives, the SEZ is focused on taking the city’s economic development aspirations forward so it can become an Aerotropolis.

“Over the next few years we are working on the development of the southern precinct in the first phase of development,” says Mangadi. “The pipeline commitment is above 90% of occupation and construction is planned to start within the current financial year, subject to budget commitments and tender outcomes. We will also be working on the development of precincts two and three, and both of the commercial cases for these precincts are at an advanced stage.”

The SEZ provides organisations with incentives to participate, encouraging their growth and the knock-on effect this has on the region and its citizens. Some of the incentives include: a reduced corporate tax of 15%, a building tax allowance, an employment tax incentive, and other tax allowances. The SEZ is also set to be a duty-free Customs Controlled Area that has VAT exemption.

“The land is serviced to shorten the period for top structure development and we provide infrastructure funding support from the department of trade and industry SEZ fund,” concludes Mangadi. “Skills and supplier development are provided through an already established and successful skills development programme to support technical skills proficiency.”

The programme across ORTIA allows for skilled artisans, entrepreneurs and business people to explore new opportunities that allow for growth in both industry and employment. There have already been significant results that continue to help the socioeconomic development in the region.