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Special Economic Zones are not sustainable in South Africa

Today during his Department's briefing of the parliamentary Portfolio Committee, the deputy Minister of Trade, Industry and Competition, Fikile Majola, admitted that without drastic intervention, Special Economic Zones in their current form are not viable.

This admission was in response to a question by the FF Plus.

Government is unable to sustainably support the various industries. This is mainly due to municipalities' failure to provide service delivery and Eskom’s inability to guarantee constant and reliable power supply.

Some of the factors hampering the sustainability of these zones include: limited human resources, illicit business forums harassing communities, provinces that are not equipped to support these Special Economic Zones, inadequate funding, and provinces' misappropriation of revenue generated through, among other things, leasing properties.

From the briefing it could also be gleaned that there is no business plan supporting the development and management of Special Economic Zones.

The ratio of R22 billion in private investments to create 19 000 job opportunities, amid uncertainty about the future of tax incentives to attract investors, is too expensive.

Particularly while the economy is still plagued by the negative effects of state capture, poor governance and the Covid-19 lockdown restrictions.

At present, only Coega in the Eastern Cape, the Tshwane Auto Zone, the Dube TradePort in Durban and the East London Industrial Zone appear to be sustainable.

As opposition party, the FF Plus will continue to put pressure on the government to fulfil its mandate in the various departments, and where the party serves as a governing partner in municipalities, it will make a positive contribution to improving local government to enable it to offer the necessary support to these zones.

 

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