1. SPECIAL ECONOMIC ZONES IMPLEMENTATION
BRIEFING TO PORTFOLIO COMMITTEE ON TRADE AND INDUSTRY
19th APRIL 2016
CAPE TOWN

2. PRESENTATION OUTLINE Introduction
Investors operating in designated IDZs
SEZ Programme Performance
What the SEZ Programme is About
Differences Between the IDZ Programme and the SEZ Programme
Creating an Enabling Environment for SEZ Development
Challenges and Goals
Conclusion

3. INTRODUCTION
The SEZ Programme is one of the key tools through which the national industrial policy is being implemented
The IPAP is the main document outlining the national industrial development agenda
As an instrument for the delivery of national industrial policy, the SEZ Programme is mainly focused on supporting, promoting and expanding the manufacturing sector
Programme performance: significant turnaround in the attractiveness of IDZs and also great investor appetite to locate in SA zones

4. COEGA: R 6. 4 billion Investment operational. R6
COEGA: R 6.4 billion Investment operational. R6.8 billion Investment secured, but not yet onsite.

5. ELIDZ : R1. 8 billion Investment Operational. R1
ELIDZ : R1.8 billion Investment Operational. R1.2 billion Investment secured, but not yet on site

6. ELIDZ DRIVING INDUSTRIAL GROWTH AND INVESTMENT

7. DTPIDZ: R372 million Investment operational. R1
DTPIDZ: R372 million Investment operational. R1.7 billion Investment secured but not yet onsite

8. IDZ INVESTMENT ATTRACTION: GAINING MOMENTUM : 2000 – 2015/16
NO. OF INVESTORS ON SITE
EST. PRIVATE INVESTMENT VALUE OF OPERATIONAL INVESTORS(R’000)
NO. OF SECURED INVESTORS(but not operational as yet)
EST. PRIVATE VALUE OF SECURED BUT NOT YET OPERATIONAL INVESTMENT(R'000)
DIRECT EMPLOYMENT
CONSTRUCTION & INDIRECT JOBS
TOTAL EMPLOYMENT
COEGA 33 29
7174
37 448
44 622
ELIDZ 28 4
1997
23 975
25 972
RBIDZ 2 9
300
3961
4 261
DTPIDZ 6 5
505 −
TOTAL 69 47
9 976
65 384
75 360

9. EST. VALUE OF PRIVATE INVESTMENTS IN THE ZONES
Operational, Secured and Pipeline Investors since inception

10. EST. VALUE OF PRIVATE INVESTMENTS IN THE ZONES
Value of Operational investors:

11. EST. VALUE OF PRIVATE INVESTMENTS IN THE ZONES
Secured, but not yet operational investors as at 2015

12. EST. VALUE OF PRIVATE INVESTMENTS IN THE ZONES
Value of Pipeline Investments:

13. DIRECT EMPLOYMENT CREATED BY IDZs: 2002- 2015
Total Number of direct Jobs created by the 4 operational IDZs

14. PROPOSED SEZs: INVESTMENT PIPELINE

15. Goal 1 Goal 2 Goal 3 CHALLENGES AND GOALS Challenges: Goals
Capacity and resources for infrastructure development to unlock investments
Fiscal constraints
Acceleration of infrastructure development
Human capital
Land availability: becoming a major constraints in all regions
Goals
Goal 1
Increase and diversify investments in designated zones
Goal 2
Increase impact of SEZ investments on host regions and communities
Goal 3
Improve sustainability

16. CONCLUSION
The new SEZ Policy and Incentives Package have significantly improved the attractiveness of South African SEZs,
Significant increase in investments in the SEZs,
Significant challenges remain.

17. WHAT THE SEZ PROGRAMME IS ABOUT
Industrial Development Zones Programme, an incentive programme to establish IDZs
Industrial Development Zone: a type of special economic zone providing special provisions to develop industrial growth in particular geographical areas
IDZ Programme has performed below expectation
Policy review process to review the challenges experienced by the IDZ Programme
Key Objectives
Outcomes
Attract foreign and domestic direct investment
Build additional industrial hubs
Build strategic industrial capabilities
Increase stock of direct investments
Accelerate growth
Increase value-added exports
Create jobs
Regional diversification

18. WHAT THE SEZ PROGRAMME IS ABOUT
Industrial Development Zones Programme, an incentive programme to establish IDZs
Industrial Development Zone: a type of special economic zone providing special provisions to develop industrial growth in particular geographical areas
IDZ Programme has performed below expectation
Policy review process to review the challenges experienced by the IDZ Programme
Corporate tax rate: 15%
Infrastructure development
Enhanced 12i
Duty Free (Customs) and VAT Free
SEZ Incentives Package

19. DIFFERENCES BETWEEN THE IDZ AND SEZ PROGRAMMES
Industrial Development Zones Programme, an incentive programme to establish IDZs
Industrial Development Zone: a type of special economic zone providing special provisions to develop industrial growth in particular geographical areas
IDZ Programme has performed below expectation
Policy review process to review the challenges experienced by the IDZ Programme
IDZ Programme
Focused only on coastal regions or regions with an international port
No significant package of incentives
Mainly just an incentive programme
SEZ Programme
Focused on all regions with significant growth potential
Competitive incentives package
Focuses on the development of strong industrial eco-systems

20. CREATING AN ENABLING ENVIRONMENT FOR SEZ DEVELOPMENT
Industrial Development Zones Programme, an incentive programme to establish IDZs
Industrial Development Zone: a type of special economic zone providing special provisions to develop industrial growth in particular geographical areas
IDZ Programme has performed below expectation
Policy review process to review the challenges experienced by the IDZ Programme
The success of the SEZ Programme depends on a range of factors including the right policy framework, appropriate institutional architecture, coordination among key role-players, and execution.
Capacity Building Programme
Monitoring and Evaluation
Marketing and Promotion
Inter-Dept. Coordination
Regulations
SEZ Advisory Board
Support to Provinces
SEZ CEOs Forum

21. CREATING AN ENABLING ENVIRONMENT
Legislation and regulations: SEZ Act now operational, and regulations on applications for designation, operator permit and funding in place.
SEZ Advisory Board: Appointed and operational.
Capacity Building Programme: Implemented in partnership with Chinese Government.
Inter-Departmental Coordination: Joint Task Team between the dti, National Treasury, SARS and ITAC established. Other departments and SOEs part of Project Steering Committees on needs basis
Provincial support: All provinces supported to set up Project Management Units and undertake SEZ planning, development and management.

22. CREATING AN ENABLING ENVIRONMENT FOR SEZ DEVELOPMENT
Industrial Development Zones Programme, an incentive programme to establish IDZs
Industrial Development Zone: a type of special economic zone providing special provisions to develop industrial growth in particular geographical areas
IDZ Programme has performed below expectation
Policy review process to review the challenges experienced by the IDZ Programme
The SEZ Programme focuses on much more than just building world-class industrial infrastructure, and focuses on building robust industrial eco-systems in the host regions.
Productivity Support
Financing and Incentives
Innovation and Technology
One Stop Shop
Business Incubation
Investment Facilitation
Marketing and Promotion
Logistics
Industrial Infrastructure
Social Infrastructure
Education and Training
Research and Development

23. SEZ PROGRAMME PERFORMANCE
Industrial Development Zones Programme, an incentive programme to establish IDZs
Industrial Development Zone: a type of special economic zone providing special provisions to develop industrial growth in particular geographical areas
IDZ Programme has performed below expectation
Policy review process to review the challenges experienced by the IDZ Programme
On-going monitoring and reporting to assess progress of the SEZ Programme and that of individual SEZs.
Quarterly reports from individual SEZs and Quarterly SEZ Performance Report.
Key Indicators
Designations
Investments
Exports
Jobs
KEY INDICATORS

24. DESIGNATION OF ZONES Designated and Operational Zones Coega
Dube TradePort
East London
Richards Bay
Designated but non-Operational
Zones (set-up phase)
OR Tambo Airport
Maluti-a-Phofung
Saldanha Bay
Applications
Atlantis
Bojanala
Musina/Makhado

25. SEZ INVESTMENT PERFORMANCE OVERVIEW TO 2015
Number of Operational, Secured and Pipeline Investors in 4 operational IDZs; i.e. Coega, ELIDZ, RBIDZ & DTPIDZ
Operational
IDZs (4)
47 investors
secured but
not yet
operational
69 investors
on site and 29
investors
in the
pipeline

27. THANK YOU