South Africa wants R750 billion
South Africa plans to attract billions of dollars in investment into its specialised industrial hubs by April to help revive a manufacturing sector that’s been in decline for decades.
“We are targeting R750 billion worth of investments in this current fiscal year,” Maoto Molefane, acting deputy-director general at the Department of Trade, said in an interview on the sidelines of the Special Economic Zones investment conference in Durban on Thursday.
The department plans to raise capital from infrastructure investments, development finance institutions, and other lenders, as well as commitments secured at South Africa’s investment conference earlier this year.
Investors pledged a record R890 billion at the forum, with much of the capital earmarked for designated industrial sites, President Cyril Ramaphosa said in an address at the SEZ conference.
Reviving manufacturing is key to South Africa’s growth strategy, with industrial parks at the heart of that effort. The sector’s share of economic output has fallen to 11% from 24% in 1994.
South Africa was once “a shining example of how Africa should develop,” but chronic power shortages, port inefficiencies and other infrastructure constraints have eroded its competitiveness, causing the decline in manufacturing’s contribution to gross domestic product, Molefane said.
“We’re using the SEZs to reverse deindustrialisation,” he said.
Incentives include a reduced income tax rate of 15%, compared with 27% before.
The nation’s 13 SEZs currently host 224 companies, with a cumulative investment of R31.7 billion and more than 28,000 direct jobs created.
The department plans to officially designate a green-energy industrial park in the Vaal region of Gauteng province—South Africa’s main commercial hub—by April.
It also aims to establish a private-sector-led SEZ close to the OR Tambo International Airport, east of Johannesburg.
The SEZ will focus on electricity and energy, and the state will support it with infrastructure, Molefane said.
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