Deputy Minister Fikile Majola: Special Economic Zones Policy and Strategy Dialogue

Address by the Deputy Minister Fikile Majola on the occasion of the Special Economic Zones Policy and Strategy Dialogue, Coega, Port Elizabeth

Program Director: Ms Jodi Scholtz,
Chairperson of the COEGA Board: Dr Paul Jourdan,
Chairperson of the SEZ Advisory Board: Dr Julian Naidoo,
SEZ Advisory Board Members,
SEZ Companies Board Members,
CEOs of SOEs and Agencies,
CEOs of SEZ Companies,
Director General of the dti: Mr Lionel October,
Deputy Director General: SEZs and Economic Transformation: Mr Sipho Zikode,
Provincial Heads of Department,
Chief Director of SEZs, the dti: Mr Maoto Molefane,
Chief Director: Urban Development Planning, COGTA: Mr Josiah Lodi,
Distinguished guests,

Good morning,

It is a privilege to be part of this very important event. Events of this nature provide a platform for strategic role players to come together to find workable and lasting solutions to the country’s challenges.

It is of particular privilege that the event is taking place here at Coega, the largest Special Economic Zone in Africa. This SEZ was established as the first Industrial Development Zone before it was converted into a Special Economic Zone in 2014 when the new Act was promulgated.

The SEZ was deliberately established in close proximity to Port of Ngqura, a deep-water port that provides a vital conduit for our value added products to the world and African continent.

Ladies and Gentlemen,

Today, we are filled with pride as we look back 30 years ago when our very own Isithwalandwe-Seaparankoe, Nelson “Rolihlahla” Mandela, walked out of prison to continue the long walk to freedom, to give us hope and courage.

Through his actions, Madiba taught us never to dishonor the cause of freedom. The current challenges facing our nation require us to continue with the onward march because we fully understand that, as Madiba thought us, “After climbing a great hill, one only finds that there are many more hills to climb”.   

Ladies and Gentlemen,

This event takes place during a very difficult period for the global economy. The world continues to battle sluggish economic growth. The International Monetary Fund has now revised down the 2019 and 2020 forecasts to 2.9% and 3.3%, respectively.

The ramifications of the 2008 financial meltdown aggravated by the recent trade wars between the US and China continue to perpetuate the stark reality facing the world.

Our country has not escaped this stark reality. Our economy has not been growing at a rate that would create new jobs while sustaining existing ones. This is the most pressing task of our time and it requires collaborative efforts to turn things for the better.

As we confront these challenges with spirited efforts, as government we continue to strengthen our capacity to radically overhaul our approach to implementation and service delivery.

Our President has directed us to work as one government focusing on rolling out a new integrated Khawuleza district-based approach to address our service delivery and local economic development challenges.

The district development model is designed to turn plans into action because we have listened to our people’s concerns about lack of implementation.

This approach is in line with the decision of the annual Lekgotla of the national executive committee of the African National Congress and the alliance partners held immediately after the 2019 general elections.

Following the NEC Lekgotla, the Cabinet Lekgotla gave us a clear mandate on the approach of the sixth administration on the concrete programme for the next five years.

The district development model means that all departments throughout the three spheres of government, all entities and agencies must have one plan and one budget to drive government’s priorities. The President has been clear with us, government must move away from working in silos to a collective and coordinated approach.

Inclusive economic growth remains vital. It is therefore imperative to find ways to align the SEZ programme with other key government programmes.

Programme Director,

Like all countries with Special Economic Zones (SEZs), South African government recognizes the programme as one of the strategic tools for industrialization, promotion of investments and exports as well as creation of much needed jobs especially for our youth.

As government, we have adopted the SEZ programme as a tool to create new industrial hubs in the country, focusing strongly on regions and sectors that are capable of accelerating economic growth and development.

We also see the SEZ programme as our tool to drive the revitalisation and expansion of industrial and historic towns and creation of new cities. 

For us to achieve these goals, concerted and collaborative efforts will be required from all stakeholders, and a coherent plan will be critical for all stakeholders to have a focused approach to the implementation of the SEZ programme.

Ladies and gentlemen, 

We invited you here today to engage one another on the SEZ Strategic Framework and the implementation of the SEZ programme over the next 10 years. This SEZ Policy and Strategy dialogue should culminate into a coherent SEZ Strategic Plan of government, supported, approved and driven by all stakeholders. 

The Director General, Mr October will touch on the specific objectives of the Dialogue in his address.

As part of the collaborative efforts I referred to earlier, we must use this platform to learn from the experiences of all South African SEZs and to share ideas and engage in constructive dialogue on the challenges and opportunities confronting SEZs.

Cabinet has already approved the new approach towards the SEZ programme allowing the national government to be actively involved in the planning and development of the zone.

As such, the dti will no longer just be a regulator and adjudicator of the application, but an active participant in the planning, development and management of the zones, especially the new and struggling zones.

In addition, the dti will also take up equity or ownership in the SEZ in order to provide full support for implementation.  This model is already being tested in Gauteng through the implementation of the proposed Tshwane Automotive SEZ.  The proposed SEZ will be owned by the dti (33.3%), Gauteng (33.4%) and the Tshwane (33.3%).

I want to urge all government spheres, entities and agencies to work together in the implementation of the programme in the spirit of the new district development model. 

Fiscal Constraints, lack of water resources and the effects of continuous constrained energy supply, struggling SEZs should be at the centre of our discussions. These are the realities that confront the South African economy today, and solutions are sought everywhere to turn our economy around. 

As we review the SEZ Programme, we must take into consideration the international and national context. In this regard and among other things, we must explore the possibilities of establishing the cross border SEZs in partnership with our neighbouring countries.

We must also strengthen economic partnerships with other African countries through the SEZ programme. This will help us with, amongst others, unlocking the untapped expansion opportunities for the SA companies, access to raw material for companies located in SEZs and strengthen the integration of industrial value chains between countries.  

By 2030, African household consumption is estimated to reach U$ 2,5 trillion. By 2040, it is estimated that the urban population of Africa will be larger than that of our friends China or India. By 2050, Africa’s population will grow to 2,5 billion people.

This presents untapped opportunities in the industrial, agricultural and services sectors, which will create the opportunities that our booming youth populations need in order to succeed.

The African Continental Free Trade Agreement (AfCFTA), the game changing economic flagship project of the African Union (AU) must help us to enable our common industrialisation, and then as a tool that binds our industrial economies together into a unified, globally competitive African market.

South African companies must strengthen their capacity and realise the opportunities created by the AfCFTA in order to benefit from the integrated regional economy of our continent.

Developing infrastructure that unites and empowers Africa requires a common commitment to cross-border projects. The continent needs an estimated $130 billion and $170 billion in infrastructure investment a year to achieve our underlying potential.

Ladies and gentlemen

We must work together to pool our shared skills and resources, and use SEZs to catalyse the types of industrial activity that will underpin a transformed African economy.

I am of the view that, if we can jointly implement the SEZ programme, we will see the changes we need in the economy and create jobs.

In this spirit, let me extend the Department of Trade and Industry’s sincere appreciation to the Coega SEZ for hosting this very important event.

We extend special thanks to the CEO, Mr Pepi Silinga and the team for continuously supporting and partnering with the dti in making sure that the SEZ programme is a success.

I wish you a successful event with fruitful deliberations. I believe that the outcomes of this dialogue will steer our SEZ programme in the right direction of faster implementation, improved integration to make the necessary impact on inclusive economic growth and job creation. 

I look forward to new ideas coming out of this dialogue.

I thank you

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