Speaking notes of Minister of Trade and Industry Dr Rob Davies at the press briefing on the Special Economic Zones Bill

16 Jan 2012

Director-General, Mr Lionel October
Deputy-Director General, Mr Tumelo Chipfupa
Members of the media,
Government officials, and
Ladies and gentlemen

We invited you here today to brief you on the gazetting of the Special Economic Zones Bill for public comment. The dti initiated the Industrial Development Zones Programme in 2000, with a view to support industrial development in the host regions with a special focus on export oriented value added products. A key requirement for designating an IDZ was proximity to either an international sea or airport. Consequently, 4 IDZs were designated in Coega in Port Elizabeth, East London, Richards Bay and the OR Tambo International Airport. All are operational except the OR Tambo International Airport IDZ.

The achievements of the IDZ Programme include a total of 40 investors attracted into the IDZs with more than R11.8 billion investments generated and more than 33 000 jobs (both construction and direct) created. Despite these achievements, it was felt that more could have been achieved. A review of the IDZ Programme was then initiated, and this identified some challenges that needed to be addressed in order to improve the performance of the IDZ Programme.

The challenges identified included the following: a design structure that favoured a few regions, support that focused narrowly on the provision of infrastructure, planning done on an ad-hoc basis, inadequate coordination among key government agencies and stakeholders, financing arrangements that made it impossible to do long term planning, and inadequate targeting of investments. The Special Economic Zones Policy and Bill were motivated by the need to urgently address the above challenges within the broader framework of accelerating industrial development, economic growth and job creation.

In line with the Industrial Policy Action Plan and the New Growth Path, the Department of Trade and Industry (the dti) aims to continue fostering its efforts to create employment and economic growth by establishing a strong industrial base in South Africa. The Special Economic Zones (SEZs) programme is one of the most critical instruments that can be used to advance government's strategic objectives of industrialisation, regional development and job creation. Moreover, the programme can assist in improving the attractiveness of South Africa as a destination for foreign direct investment.

In order to ensure that the SEZ programme is an effective instrument for industrial development, the dti developed the SEZ Policy and Bill. Through the Bill there will be a dedicated legislative framework for special economic zones.

The main objectives of the SEZ Bill are to provide for the designation, development, promotion, operation and management of Special Economic Zones; to provide for the establishment of the Special Economic Zones Board; to regulate the application and issuing of Special Economic Zones operator permits; to provide for the establishment of the Special Economic Zones Fund; and to provide for matters incidental thereto.

Furthermore, the SEZ Bill will enable government to move towards a broader Special Economic Zones Programme, through which a variety of special economic zones can be designated in order to address the economic development challenges of each region and address spatial development inequalities.

The key provisions include the establishment of a Special Economic Zones Board to advise the Minister of Trade and Industry on the policy, strategy and other related matters; establishment of the Special Economic Zones Fund to provide for a more coherent and predictable funding framework that enables long-term planning; strengthening of governance arrangements including clarification of roles and responsibilities of key stakeholders.

In addition, we will have a more coherent approach to planning and supporting special economic zones operators, especially in areas such as investment promotion and marketing, capacity building, environmental protection, infrastructure development and logistics, improved coordination among government agencies, and the reduction of red tape.

As of today, the dti will embark on a public consultation process on the SEZ Policy and Bill. In addition, we will immediately start engaging provinces on identifying possible SEZs and undertaking the required feasibility studies for each proposed SEZ.

In conclusion, we hope the new policy direction on the Special Economic Zones will result in accelerated industrial development, foreign and domestic investment attraction, unlocking regional economic development, broadening access to economic opportunities to previously marginalised citizens and regions; create more quality jobs, and improvements in the general living standards of South Africans.

The Bill will soon be made available through the dti website and government printers, and you are all invited to provide inputs.

I thank you.

Enquiry:

Issued by the Department of Trade and Industry, January 16 2012

Click here to sign up to receive our free daily headline email newsletter