IT IS “imperative” that the Special Economic Zones Bill tabled on Tuesday is “expediently considered” to take advantage of potential “huge” foreign direct and domestic investment interest‚ Trade and Industry Minister Rob Davies told the National Council of Provinces on Tuesday.
This‚ he said‚ would enable the creation of “strong up- and downstream linkages in strategic value chains”‚ supporting broader-based industrialisation in the country‚ balanced regional industrial growth and the development of more competitive and productive regional economies.
“Adoption of this bill will be a significant milestone in pursuit of the aspirations expressed in the National Development Plan‚ the New Growth Path and the Industrial Policy Action Plan‚” Mr Davies said.
Consultation on the bill started in 2010 with stakeholders across the three spheres of government‚ state-owned enterprises‚ the South African Revenue Service‚ the National Economic‚ Development and Labour Council and the general business community.
The bill was introduced to Parliament in March last year.
Mr Davies said support measures had already been put in place to enhance the value proposition of special economic zones in South Africa‚ including allowing for 15% corporate tax‚ a building tax allowance‚ an employment tax incentive‚ and value-added tax and duty-free exemptions.
“It is thus imperative that the bill is expediently considered in order to take advantage of this huge imminent interest and opportunity.
This House’s support for the bill would be greatly welcomed‚” he said.
His remarks follow comments last week by Christopher Mashigo‚ Coega Development Corporation executive manager of business development‚ that as an owner and operator of the Coega Industrial Development Zone (IDZ)‚ the corporation was counting on the new incentives law.
Mr Mashigo said certainty about incentives that had previously not been available to IDZs was key to making Coega’s case stronger in its efforts to secure new investments amid “serious competition”.
Mr Davies told the National Council of Provinces that “most importantly” the criteria for IDZ designation had been biased towards the development of coastal regions and ignored economic potential in South Africa’s inland regions.
He said the bill aimed to fix this‚ thereby realising the long-term development potential of all regions and reversing apartheid’s economic marginalisation and perpetuation of spatial inequalities.
Centre for Development and Enterprise executive director Ann Bernstein said in a submission to Parliament last year that special economic zones could help South Africa deal with its massive unemployment challenge.
She also said that as China developed‚ some of its labour-intensive industries would move elsewhere‚ and South Africa could take advantage of that.
“This is a historic opportunity for South Africa.
There are 85-million manufacturing jobs in China.
One of South Africa’s national priorities should be to attract a few million of the jobs that China is destined to shed‚” she said.
“Done the right way‚ the special economic zones that the government wants to establish could be a vehicle for doing this.” © BDlive 2014