President Jacob Zuma: Launch of Maluti-a-Phofung Special Economic Zone

25 Apr 2017

Minister of Trade and Industry, Dr Rob Davies,
Premier of the Free State Province, Mr Ace Magashule,
MEC for Economic and Small Business Development, Tourism and Environmental Affairs, Dr. Benny Malakoane and all MECs present,
Executive Mayors and councillors,
Chairperson of the Special Economic Zones Advisory Board, Dr Julian Naidoo and members,
Business Executives,

Dumelang, sanibonani, molweni.

I am delighted to join you as we launch the Maluti-a-Phofung Special Economic Zone here in Tshiame within the Maluti-a-Phofung Local Municipality.

This is a special development which forms part of our conscious efforts of creating economic development and growth opportunities closer to where our people live.

This we do through promoting industrialisation and also the development of township and rural economies.

Government and the governing party are fully committed to pursuing and implementing a programme of radical economic transformation.

One of the critical components of this radical economic transformation is the notion of a balanced regional economic and industrial development.

For a very long time, South Africa’s economy has and continues to rely on the regional industrial hubs of Gauteng, eThekwini-Pietermaritzburg and the Cape Peninsula.

These regions collectively account for about 70% of the nation’s Gross Value Add. Many other regions were completely neglected with the result that their development potential was severely constrained.

Many of these regions now lack the critical ingredients for long term economic and industrial success, such as industrial infrastructure, world class higher education and technical institutions, research and development, roads and rail links, and others.

While the Special Economic Zones Programme may not immediately bring all these ingredients to these regions, it is an important catalytic programme that allows us to take the first steps.

The Special Economic Zones and Industrial Parks programme is critical to our efforts of radically transforming our economy.

Through the Special Economic Zones Programme, South Africa also continues to play an important role in the attraction of foreign and domestic direct investment into the economy.

To date, eight Special Economic Zones, including the old Industrial Development Zones, have been designated across the country.

These are Coega and East London IDZs in the Eastern Cape, Dube TradePort and Richards Bay IDZs in KwaZulu-Natal, OR Tambo IDZ in Gauteng, Saldanha Bay IDZ in the Western Cape, Maluti-a-Phofung IDZ in the Free State, and Musina-Makhado SEZ in Limpopo.

We are thus very happy to be launching this critical project just two months after announcing it in the State of the Nation Address reply.

The launch of this Special Economic Zone is significant in many ways.  Firstly, it is for the very first time that government develops a Special Economic Zone in an area that was once part of the apartheid era Bantustan Industrial Parks.

These Industrial Parks were introduced not so much because of economic potential but merely to sustain the apartheid system of separate development. They wanted to keep black people far away from the city centres which had to be kept for white people, with black people coming to supply labour only.

Government has intervened here because we are convinced of the long-term economic potential of this region.

Secondly, this launch and the development of the Maluti-a-Phofung SEZ demonstrates our promotion of industrial development which is key to the nation’s long-term economic success and prosperity.

We want to change the way our economy is structured currently. Our current reliance on exporting minerals and other raw materials to other countries is a sure recipe for an economy that enriches the few at the expense of the majority.  This, of course, will just deepen the already high levels of inequality in our society.

The Special Economic Zones Programme is therefore very important to our economic development goals.

Already, through the SEZ Programme, government has attracted over nine billion rand worth of investments in all designated zones across the country.

We will work harder to ensure that key growth points and regions become centres of industrial competence.

The radical economic transformation programme also requires increasing the participation of Black Industrialists and Entrepreneurs in key value chains and industrial sectors of our economy.

The majority cannot continue to rely on the skills and know-how of the minority, even though these are very important and needed in the economy.

The majority cannot just limit their dreams and aspirations to being workers. The shackles of economic subjugation have long been broken.

The majority must increasingly produce innovators, investors, entrepreneurs, industrialists, and many other forms of economic value addition.

This is not to say the contribution of the minority is not valuable, but rather that the economic cake can only be bigger and better if our globally competitive industrial economy is built on the full potential of all the country’s citizens and regions.

The launch of the Maluti-a-Phofung Special Economic Zone should also remind us of the importance of strong partnerships between the public and private sectors.

Government understands and appreciates the role of the private sector as an investor, innovator, trader, creator of jobs, and so on, and understands what the private sector requires to prosper and compete globally. 

Government is also willing to play its part as a reliable, supportive and responsive partner.

It is for this reason that government introduced the Special Economic Zones Programme, launched the One Stop Shop through Invest South Africa, works to improve energy security, revitalises the Old Industrial Parks, and continues to implement many other critical initiatives.

We are committed to making it easier and easier to do business in South Africa.

Through the applicable 15% corporate tax rate, government will reduce your tax burdens. Through the Customs Control Area facility, the South African Receiver of Revenues will make it easier and a little cheaper for you to trade.

Through the provision of bulk and top infrastructure, the Department of Trade and Industry will build world class facilities for you to do business. Through the One Stop Shop, you will access various government services in one place.

To local and international investors; we declare to you today that this facility called the Maluti-a-Phofung SEZ is open for business.

We encourage you to partner with and integrate the local small businesses into your key value and supply chains.

I am quite certain that this makes good business sense. In this regard, we need to appreciate the initiative of Distell to develop an agro-processing cluster in this region.

This cluster will include emerging farmers who will be assisted to produce quality apples to be used as inputs for beverages produced by Distell. Various government departments will work with Distell and its partners to ensure that this initiative is a success.

Ladies and gentlemen,

This is not just a launch of the Maluti-a-Phofung Special Economic Zone, but also a rekindling of dreams.

It is the rekindling of dreams of many unemployed people who are looking for job opportunities so they can provide for their families, and that they do not need to commute in the darkness of night and for many hours to go to and from work.

Dreams of young people who wish they do not have to move to Gauteng and other regions for quality school and university education.

But that these services will be available in their own region.

These are dreams of local entrepreneurs and industrialists looking for the right industrial infrastructure, looking for the right facilities and space so they can produce much-needed goods and services.

Dreams that they can produce and supply global markets right from the land of their birth, at globally competitive prices.

Dreams of regional leaders who are looking forward to the transformation of their region from unproductive villages to world class settlements and towns and cities.

To all who have such dreams, this government hears you and is here for you. This government will partner with you until you reach your full potential.

Through the Maluti-a-Phofung Special Economic Zone, various government agencies will provide or facilitate critical services.

To the local communities - these are your facilities. Look after them and protect them from destruction and improve them.

Future generations do not have to start from scratch, but must find that this generation has invested in their dreams.

We wish to congratulate the Premier and the government of the Free State Province for initiating the Maluti-a-Phofung Special Economic Zone.

We also thank Minister Davies, Department of Trade and Industry and the Special Economic Zones Advisory Board for working hard to make this  development possible.

We thank the business community for working with government to and with continued cooperation, this project will be a major success.

We encourage all of you to continue to work together so that the full potential of the project can be fully realised.

It is my pleasure to declare Maluti-a-Phofung Special Economic Zone project officially opened!

I thank you.

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