GOVERNMENT BREAKING NEW GROUND FOR THE FUTURE OF INDUSTRIAL GROWTH

GOVERNMENT BREAKING NEW GROUND FOR THE FUTURE OF INDUSTRIAL GROWTH

The South African government has made great strides in terms of realising its plans for industrialising the country to ensure growth in the economy for both the country and the African continent.

The Director-General of the Department of Trade and Industry (the dti), Mr Lionel October says South Africa has a concrete plan for implementing the National Development Plan (NDP) to ensure that its goals are realised. According to him South Africa needs to industrialise in order to meet its goals in the next 15 years and the Industrial Policy Action Plan (IPAP) is the route to prosperity.

One of the instruments utilised by government to transform the economy and encourage growth through attracting Foreign Direct Investment (FDI) is the Industrial Development Zones (IDZs) and the Special Economic Zone (SEZ) programme led by the dti.

October says the IDZs developed to attract investment and increase exports and the competitiveness of South African products.

“IDZs are attractive because of their close proximity to an airport or port, good basic infrastructure, and duty-free imports of production-related raw materials and inputs. There are currently six operating IDZs in South Africa which have attracted a great amount of investors into the country, and still aim to attract more,” he adds.

He highlights that these zones boast a range of attractive offerings for investors which makes it worth their while to set up their businesses in them.

“Some of these zones have advanced socio-economic development through skills development, technology transfer and job creation. Some tailored for manufacturing and storage of minerals and products to boost beneficiation, investment and development of skills. Others bring together international airports, cargo terminals, warehousing, offices, retail sectors and agricultural areas,” he emphasises.

October says although major achievements have recorded with the existing IDZs, there have also been challenges that have caused the IDZs to not reach optimal performance.

“To this end, the dti has devised regulations that will see the country’s IDZs transformed into new SEZs. The SEZs will include IDZs, free ports, free trade zones and sector development zones,” he adds.

SEZs intended to bring mainstream economic activity to poor and isolated parts of South Africa by leveraging the commercial potential of particular regions. In particular, SEZs offer a more investor-friendly business environment and regarded as vehicles to attract foreign investment, create employment opportunities and introduce advanced technology. They offer a range of incentives like 15% Corporate Tax, building allowance, employment incentive, Customs Controlled Area and 12i Tax Allowance for qualifying enterprises.