President Cyril Ramaphosa: Tshwane Automotive Special Economic Zone launch

5 Nov 2019

Address by President Cyril Ramaphosa at the launch of the Tshwane Automotive Special Economic Zone, Silverton

Programme Director, MEC Morakane Mosupyoe,
Minister of Trade and Industry, Mr Ebrahim Patel,
Premier of Gauteng, Mr David Makhura,
Executive Mayor of Tshwane, Mr Stevens Mokgalapa,
Managing Director of Ford Motor Company of Southern Africa, Mr Neale Hill,
Members of the Diplomatic Corps,
Distinguished Guests,
Ladies and Gentlemen,

It is my pleasure to be here to celebrate the launch of the Tshwane Automotive Special Economic Zone.

With just a day before we officially open the second South Africa Investment Conference in Johannesburg, this SEZ is yet another affirmation of growing investor confidence in our country.

South Africa is the continent’s largest automaker and our automotive sector exports are steadily climbing – having recorded a 19% growth this year compared to 2018.

Not only will this Automotive SEZ catalyse further growth in a sector that is the mainstay of our national industrial base.

It will also bring jobs, support local businesses and spur growth in the city’s economy.

I am pleased to note that the 18 companies that have been engaged to set up operations in this SEZ are already revving their engines and are rearing to go; with nine already confirmed to set up factories here by January 2021.

The projected investment amounts to approximately R3.6 billion, and a potential 6,700 direct jobs will be created.

This is immensely encouraging, and comes at a time when business, government, labour and civil society must work together to resolve the twin challenges of slow economic growth and unemployment.

This launch is taking place after a very exciting weekend for our country, when our national team, the Springboks soared to victory at the Rugby World Cup in Japan.

The success of the Springboks once again reminds us that we are a winning nation with great prospects – and that we can attain our goals if we work together as a nation and in partnership with our friends in the international community, many of whom are present here today.

We are on a firm path to rebuild our country and return our economy to higher levels of productivity, as well as to transform it to make it more inclusive.

Restoring the confidence of both domestic and foreign investors is the lynchpin of our economic reform agenda.

Government has prioritised supporting, developing and expanding our SEZ Programme.

Special Economic Zones play a key role in driving our bold new Industrial Strategy, which is aimed at reigniting economic activity and unleashing private investment in sectors with high growth potential, including the automotive sector.

This Tshwane Automotive SEZ will positively contribute to our industrial strategy by attracting automotive components manufacturing companies and related services.

There are a number of benefits for bringing your business to an SEZ, such as a preferential corporate tax regime, building allowances, employee tax incentives, favourable customs regulations, VAT exemptions and support for capital investment and training.

I am encouraged by the decision of the Ford Motor Company to work with government to establish the first automotive incubation centre adjacent to the Tshwane Automotive SEZ.

Once operational it will support SMMEs, especially black owned businesses, to perform value-added sub-assembly to Tier 1 suppliers of the Ford Motor Company.

The development of the Tshwane Automotive SEZ will support the expansion of the incubation centre and contribute more broadly to the development of black industrialists.

The proposal to establish the Tshwane Automotive SEZ was initiated by the Ford Motor Company to help expand its automotive footprint in South Africa through the attraction of its global suppliers into the country.

This ambition was further enhanced by the Gauteng government’s plan of developing a new Automotive City in Tshwane, and aligns with the SA Automotive Masterplan 2035, which sets targets for us to increase localisation.

This SEZ is the outcome of partnerships between the Department of Trade and Industry, the Gauteng Provincial Government, the City of Tshwane and the Ford Motor Company of Southern Africa.

We are grateful to the leadership of Ford Motor Company of Southern Africa for choosing the South African government as your strategic partner.

This initiative is proof that partnership between government and the private sector is vital in driving the development agenda of our country.

This special economic zone further aligns with our new District Development Model, which we call Khawuleza, meaning to hurry up.

It seeks to address service delivery and economic development challenges through the synchronisation of planning across all spheres of government, working alongside social partners such as business and the community.

A management company owned by the three spheres of government, with Board members also drawn from business, will be established to develop and manage this automotive zone.

In early 2018 we announced our intention to mobilise over R1.2 trillion in new investments over the next five years.

Many of these investments will be located in various special economic zones across the country, which to date have created over 16,000 direct jobs.

This excludes construction jobs, indirect jobs and additional jobs from confirmed investments where projects are still under construction.

We are introducing a new approach in the implementation of SEZs to enhance their impact.

It includes resolving regulatory hurdles that have been obstacles to investors.

Processes such as securing environmental impact authorisations, water use licenses and the like will be fast-tracked.

Investors will need to be signed up before an area is approved as a Special Economic Zone.

All three spheres of government will be involved with the private sector in the planning and development of infrastructure.

Project management units at the Development Bank of Southern Africa will assist in accelerating the roll-out of infrastructure, including bulk infrastructure, factories and warehouses.

The Industrial Development Corporation will assist with the development of business cases for SEZs, securing private investors and conducting due diligence processes on prospective investors.

The Tshwane Automotive SEZ will be developed under this new approach. It will be rolled out in a phased manner on the 162 hectares of land provided by the City of Tshwane.

Based on the investment pipeline that is already in place, Phase One of the SEZ on 81 hectares is already oversubscribed.

This is one of those times where we see a silver lining: it is a clear indication that this SEZ has generated significant investor interest.

The government of Gauteng and the City of Tshwane are to be commended for seizing this opportunity, and we invite all other manufacturers to follow suit and help us increase localisation in South Africa.

Manufacturers looking for cost-effective and viable bases to locate to should come to this and the other SEZs across the country.

The existing material benefits of doing so will be multiplied once the African Continental Free Trade Area comes into operation – opening up new markets for their goods, products and services.

Ladies and Gentlemen,

On Wednesday we will open the second South Africa Investment Conference, where domestic and international investors will be presented with the vast opportunities that exist.

The message we want to communicate is that South Africa is a competitive and proven investment destination.

We also want to reiterate that we welcome and encourage greater partnership between government and the private sector.

The Ford Motor Company is a valued and longstanding investor in our country, and the opening of this plant further cements our good relations.

It sends as clear a signal as ever that we can achieve more if we collaborate.

I once again congratulate all who have brought us to this point.

Let us continue to build a sustainable and inclusive economy that benefits all our people.

Let us grow South Africa together.

I thank you.

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