South Africa’s Industrial Development Zones (IDZs) are not meeting their investment targets. According to the Department of Trade and Industry’s mid-year report, Coega, East London and Richards Bay IDZs signed up no new investors in the six months April to September. “There was no achievement at mid-year for new investors, jobs created and the value of new investments in the Coega industrial development zone (IDZ) in the first half of 2012/13,” said the department. This is “due to the impact of the recent economic recession, which has slowed down planned investment activities in the IDZs. “Only one investor was anticipated to have been secured in respect of Coega between April and September 2012, but that investor has been delayed due to the current status of the environmental impact scan pending approvals,” it adds. The number of new investors, jobs created and the value of new investments in the East London IDZ in the first half of 2012/13 “is zero because no new investors were anticipated for the two quarters of the year”. Richards Bay IDZ is not expected to secure any investor, as the entity is still dealing with bulk earthworks and other enabling infrastructure which was delayed by the challenges of the “wetlands”. The filling up of the land to development stage started during 2011/12 and would be completed by the end of this financial year, said the department. All three zones are competing against IDZs and similar economic zones around the world which offer much greater incentives in the form of tax concessions and free or low-priced land, as well as fewer labour restrictions. The South African IDZ strategy was devised on the premise that the competitive advantage was the availability of abundant and cheap electricity. Government’s Special Economic Zone (SEZ) policy and incentives are still in the melting pot.
