SEZs offer business incentives as Covid-19 stagnation eases

South Africa’s Special Economic Zones (SEZ) are scrambling for investment with a brighter global economic outlook ahead, following the harsh 18-month lockdown period due to Covid-19, which led tenants to negotiate rental holidays and other special concessions. Photo: Supplied

South Africa’s Special Economic Zones (SEZ) are scrambling for investment with a brighter global economic outlook ahead, following the harsh 18-month lockdown period due to Covid-19, which led tenants to negotiate rental holidays and other special concessions. Photo: Supplied

Published Sep 16, 2021

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SOUTH Africa’s Special Economic Zones (SEZ) are scrambling for investment with a brighter global economic outlook ahead, following the harsh 18-month lockdown period due to Covid-19, which led tenants to negotiate rental holidays and other special concessions.

More than 50 percent capacity is currently available at SEZs, divisional heads of the SEZs, the OR Tambo, the Dube Trade Port, Saldanha Bay Trade Port and Richards Bay said at a webinar yesterday.

“The Covid-19 impact was negative to all of us and our investors were not immune. We had to negotiate rental holidays, make special arrangements for our clients. We had to look at each case according to its merits and liaise with the relevant government and provincial authorities,” said Dube Trade Port chief operations officer, Khaya Ngqaka. “It helped because we are seeing a build-up in the recovery,” Ngqaka said.

Benedicta Ducran, the executive manager for the Ease of Doing Business unit in one of South Africa’s SEZs, the Saldanha Bay IDZ, said they had gained a windfall from renewable projects in the Northern Cape where developers needed space to store blades and turbines after the recent regulatory boost for private generated power.

Saldanha’s office park, completed last year, has had a 50 percent uptake, she said. The Saldanha Bay SEZ had been remodelling itself for business other than the oil and gas industries, which did not perform to expectations.

It has facilitated more than R21 billion worth of business since inception and has the advantage of a 23 million berth for facilitating maritime imports and exports. A common thread was that they offer land, topside infrastructure, SME centres, development hubs and office space.

Ducran said after a recent survey done with its top 20 investors, assurances were received that they would ride the wave to the crest.

“We haven’t reached foreclosures yet and we are still attracting investment. We have more on the uptake than we are dropping off.

“The coast is ideal for high volume cargo while OR Tambo for instance offers a higher value proposition for high-end goods,” Ducran said on the differences in value propositions between inland and coastal SEZs.

SEZs are geographically designated areas set aside for specifically targeted economic activities to promote national economic growth and exports by using support measures to attract foreign and domestic investments and technology.

South Africa’s current most active SEZs include the OR Tambo SEZ, the Dube Trade Port anchored on Durban harbour exit point, the Saldanah Bay SEZ and the Richards Bay SEZ, which initially styled itself as a gas and oil development incubator.

On the main, SEZs promote business growth through offering incentives, including infrastructural grants, tax breaks, reduced tariffs and trade concessions.

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