Government has warned international investors that South Africa's Special Economic Zones (SEZs) will no longer serve as platforms for exporting raw minerals without domestic value addition, with Deputy President Paul Mashatile saying the country expected investors to manufacture, process and create jobs locally.
Speaking at the Second International SEZ Conference in Durban, Mashatile said the cabinet-approved 20-year SEZ development framework was designed to shift the economy towards greater industrialisation and beneficiation.
"South Africa is open for business, but we are not open for extraction," Mashatile said, adding that investors should beneficiate minerals locally, develop local skills and partner with South African businesses.
The new framework would introduce stricter oversight of SEZ performance through five-year assessments, with government measuring investment, job creation, exports and SMME participation, Mashatile said.
Zones that score below 60% on the government's performance framework would be subject to formal intervention, including restructuring, repurposing or, where necessary, de-designation, he said.
The SEZ programme had already generated R14.8 billion in revenue and created more than 30 000 jobs across the automotive manufacturing, agro-processing and renewable energy sectors, Mashatile said, citing an independent World Bank study.
South Africa's 13 designated SEZs across eight provinces are home to 224 operational companies representing R31.7bn in investment – an increase of R17.2bn over the past eight years, Trade, Industry and Competition Minister Parks Tau said. The Department of Trade, Industry and Competition has invested R12bn in supporting infrastructure.
Local beneficiation was central to government's updated industrial development strategy, with SEZs serving as a key mechanism to drive decarbonisation, manufacturing diversification and digitalisation, Tau said.
The revised implementation model incorporated recommendations from a World Bank review, including measures to address limited non-financial incentives, the absence of formal turnaround mechanisms for underperforming zones and weak coordination between SEZs and host municipalities, he said.
KwaZulu-Natal had secured more than R185bn in investment commitments through its 2024 and 2025 provincial investment conferences, KwaZulu-Natal MEC for Economic Development, Tourism and Environmental Affairs Musa Zondi said.
The province's ports and logistics infrastructure would play a central role in supporting value-added trade, he said.
"Our ports are working, and we are ready to have mutually engaging conversations at this conference."
