President Cyril Ramaphosa with government officials including Gauteng Premier David Makhura and Tshwane Mayor Stevens Mokgalapa at the launch of the Tshwane Automotive Special Economic Zone. PHOTO: Jonisayi Maromo/African News Agency (ANA)

PRETORIA - The Tshwane Automotive Special Economic Zone (SEZ) launced on Tuesday is projected to ignite investments exceeding R3 billion and create a potential 6,700 direct jobs in the sector, President Cyril Ramaphosa said.

Not only will the zone boost growth in a sector that is the mainstay of  the country's industrial base, but it will also bring jobs, support local businesses and spur growth in the city’s economy, Ramaphosa told guests at the launch held at the Ford Motor Company in Silverton, east of Pretoria.

"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,” he said.

He said the launch came at an opportune time, when business, the government, labour and civil society must work together to resolve the twin challenges of slow economic growth and unemployment.

“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 pogramme,” said Ramaphosa.

President Cyril Ramaphosa at the launch of the Tshwane Automotive Special Economic Zone. PHOTO: Jonisayi Maromo/African News Agency (ANA)

“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.”

The president said there were numerous benefits from bringing one’s business to an established SEZ, including a preferential corporate tax regime, building allowances, employee tax incentives, favourable customs regulations, value-added tax 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 (small, medium and micro-sized enterprises), especially black owned businesses, to perform value-added sub-assembly to Tier 1 suppliers of the Ford Motor Company,” said Ramaphosa.

He said Ford had initiated the proposal to establish the Tshwane economic zone 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 provincial government’s plan of developing a new automotive city in Tshwane and aligned with South Africa's Automotive Masterplan 2035, which sets targets to increase localisation.

South Africa is the continent’s largest automaker and exports have climbed steadily, recording 19 percent growth this year compared with 2018.

The hub is an outcome of an investment conference held last year where the automotive industry pledged investment, transformation and localisation in fulfillment of commitments contained in the automotive development plan.

Ford SA will be the anchor tenant of the Tshwane crowding in new investments and localisation opportunities for component manufacturers. 

The hub, is part of the expansion of the OR Tambo International Airport special economic zone, will be developed through a joint partnership between the department of trade and industry, the Gauteng provincial government and the City of Tshwane and is expected to yield new business opportunities for nearby communities such as Eesterust, Moretele View, Nellmapius and Mamelodi.

- African News Agency (ANA)