The Department of Trade and Industry recently introduced its Special Economic Zones (SEZ) Policy, which the President enacted into law. The premise is that the act and policy will transform regional industrial development in South Africa.
The Nkomazi Special Economic Zone or Nkomati SEZ is the axis of economic integration between the South African provinces of Mpumalanga, Gauteng and Limpopo and the independent states of Swaziland and Mozambique.
Strategically positioned in the border town of Komatipoort, the Nkomati SEZ offers the investor a multi-sector base of operations along the Maputo Development Corridor, which runs through Southern Africa’s most productive regions.
Logistics & transport
FMCG exports from South Africa’s major retailers travel to a growing number of Sub-Saharan African destinations every week, providing many logistics opportunities.
Further, the Nkomazi SEZ is conducive to the creation of bonded warehouses, distribution centres, container yards, truck stops and petrol depots (along with the associated maintenance, fitment and repair facilities).
Minerals & energy
Mpumalanga’s mineral resources are varied and several of the biggest and most diversified mining companies have multiple operations in the province.
To illustrate, Mpumalanga accounts for 83% of South Africa’s coal production and is the third-largest coal-exporting region in the world. In addition, a natural gas pipeline, connecting the gas fields of southern Mozambique with the industrial south of Mpumalanga, transverses the Nkomazi SEZ – ideal for a gas-fired power plant.
Other investment opportunities in this sector include the manufacture of phosphate for fertilisers, the production of ammonia and urea, and the beneficiation of fluorspar to be used in downstream agro-chemicals and fluorine production.
The establishment of an agro-processing industrial park within the Nkomati SEZ would leverage significantly off the region’s large-scale citrus and sugar industries. There are also opportunities for investment in food processing and retail packaging.
Exports of commercial vehicles into Africa are expected to show above-average growth over the next few years. For this reason, the automotive sector has significant potential in terms of the distribution of locally manufactured and imported vehicles and the manufacture and distribution of components and accessories.
Projected direct and indirect job opportunities in South Africa as a result of the Nkomati SEZ are expected to be 1 394 in the first year, 985 over the course of the first three years of construction, and 707 per year from the fourth year onwards.