Chairperson of the Portfolio Committee on Trade, Industry and Competition,
Honourable Members,
Senior officials of the Department of Trade, Industry and Competition,
Representatives of the Western Cape Provincial Government, and Special Economic Zones,
Ladies and gentlemen,
Good morning.
Firstly I would like to thank the honourable members for conducting their oversight at the Atlantis SEZ and Saldanha Freeport IDZ. I too have visited both and shared similar concerns the members had raised and what the honourable chairperson has included in his letter to the Minister.
I will leave the departmental officials to address each of the points raised and the progress made.
Both the Atlantis SEZ and Freeport Saldanha IDZ represent critical pillars of South Africa’s industrial strategy, and have the potential to be powerful engines of hope for South Africa’s economic future. In theory, they are designed to drive investment attraction, promote industrial development, and unlock sustainable job creation for our communities, and looking at our current status, there is some cause for optimism.
The Atlantis SEZ is positioning South Africa as a continental leader in the green economy. By targeting renewable energy manufacturing and eco-friendly technologies, Atlantis is turning the global drive for sustainability into local factories and stable jobs, and aligns with South Africa’s Just Energy Transition.
Meanwhile, the Saldanha Bay IDZ offers world-class, deep-water port infrastructure, and is uniquely positioned to serve the oil and gas services sector, to host critical ship repair services and build a pipeline for the emerging green hydrogen economy.
It also operates a specialised customs-controlled area that simplifies logistics for international maritime operators.
Together, these zones prove that South Africa can attract world-class investors and develop sophisticated global supply chains. However, Chairperson, their trajectories highlight that alongside their strengths, they have been hampered by ongoing operational weaknesses mainly as a result of the regulatory environment.
Despite their incredible potential, these vital economic engines unfortunately are not yet operating with all cylinders firing, and if we are to fully realise our grand vision for Spatial Industrial Development, we must be honest about the shortcomings.
In a report released last year containing reform proposals to ‘turbocharge’ our SEZs, the Centre for Development & Enterprise argued that, “For an SEZ to be successful, it needs to be truly special. It needs to offer investors different rules from the rest of the economy”, to which I would also add it needs to offer better operating conditions.
We will know that our SEZs have truly moved into a higher gear when the investment they attract ticks three boxes: firstly, it has to be new investment; secondly, it has to be investment that wouldn’t have happened anyway or otherwise; and thirdly, it has to be investment that wouldn’t have gone elsewhere in the country.
South Africa has been stuck in a low-growth rut for more than a decade while unemployment has climbed, so it’s evident that business-as-usual approaches to policy fall far short and we need to try something new and bold. While broader reforms will bring sustainable solutions, we must also explore the potential of SEZs to be “experimental environments” for red tape reduction and innovative public-private partnerships.
Our SEZs must be the forefront hubs where we eliminate the slow pace of investor conversion through such interventions as the Fusion Centre, so that translating expressions of interest into operational factories on the ground happens without bureaucratic bottlenecks or delays. Because we must be honest, it is often government created cumbersome regulatory environments which can deter investment and the deciding factor between investing in South Africa or another country.
But Chairperson, I should emphasise that we must not view these challenges as failures, but rather as pointers to where we can refine and enhance our strategic roadmap. The underlying foundation of both SEZs is robust, and investor appetite remains to be unlocked if we can resolve the friction points.
If our SEZs are to unlock this latent power to revitalise manufacturing, promote export-oriented industries and generate sufficient jobs to tackle the country’s unemployment crisis, we will also need to collaborate within the whole-of-government approach on all relevant issues, from visas to licensing to the overall cost of doing business in South Africa, and more specifically the cost of doing business within an SEZ.
In conclusion, both SEZs demonstrate immense potential to reshape the economic landscape of the Western Cape and South Africa at large. Atlantis offers a sustainable blueprint for the green economy, while Saldanha Bay serves as a critical maritime and logistics gateway.
If we can learn and adopt the lessons from the success stories of such countries as China, Mauritius, Colombia and Turkey, our SEZs, when reimagined and effectively implemented, could become powerful tools for attracting capital, technology and skills required to achieve our apex priority of economic growth and job creation.
Thank you.
MS ALEXANDRA ABRAHAMS
DEPUTY MINISTER OF TRADE, INDUSTRY AND COMPETITION
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