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Infrastructure Development Critical for SEZ’s - published 17 Sep 2018

Lunga Tungu, the Programme Manager of Infrastructure Development outlines the importance of infrastructure for laying the foundation at SEZ’s.


Thought Leadership Infrastructure development, a critical component in laying the foundation at Special Economic Zones

When one thinks of the critical factors that come into making a Special Economic Zone successful; one has to ponder about all the relevant ingredients needed ensure the effective and efficient running of an SEZ. The main functions of SEZs is to attract foreign investments, promote export-oriented growth and create jobs while also contributing towards a country’s structural transformation, strengthening industrialization and global trade. One must thus wonder then, how significant the role infrastructure development can play as a driving force in laying the foundations of success in an SEZ.


In highlighting the key components needed for SEZ’s to thrive in Sub-Saharan Africa, Mr Claude Baissac, emphasised that there was no need to have multibillion-dollar infrastructure, to attract investors, but rather an internationally good, cost-effective infrastructure where quality and fair pricing of utilities was key. This component is demonstrated by the Coega SEZ in so far as having 43 operational investors, 25 of them local and 18 of them international with a combined investment value of R7 billion since the SEZ’s inception. Companies from China, Japan, Germany, France and India to name a few have made the SEZ their home, as it has competitively priced leasing agreements and first class infrastructure, roads, railway lines and an internationally recognised port, the Port of Ngqura.


Having highlighted this, one can now see how infrastructure can be viewed in a sense, as a source for driving foreign direct investment thus furthering the investment opportunities of an SEZ. This in turn accelerates economic growth, whilst contributing towards the structural transformation of the country (and in this case, Eastern Cape). The Coega SEZ carefully demonstrates their commitment to economic acceleration and structural transformation through their diverse investment in various infrastructure projects in sectors such as metals and manufacturing. This is exemplified through the increased yearly introduction of new projects such the Kenako and OSHO cement projects, which can be located in the manufacturing cluster zone (Zone 5) as well as HELLA and Akacia Medical. These projects all focus on infrastructure development in the various sectors in the SEZ such as manufacturing, automotive and pharmaceuticals.


With increased infrastructure development and the introduction of new projects, comes the need for an increase in labour and skills development thus resulting in job creation. The Coega SEZ, through their various infrastructure development projects, have contributed to over 100 000 jobs operationally and in construction since its inception.


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