South Africa’s US$227-million Tshwane Automotive Special Economic Zone (SEZ), under construction in the capital Pretoria, has attracted one billion dollars in new investment from the US-based Ford Motor Company, President Cyril Ramaphosa announced on Tuesday.“I am told this is the largest investment the Ford Motor Company has made since its establishment in South Africa, and one of the largest investments in the South African automotive industry as a whole,” the president said.
Ramaphosa said this when he visited the SEZ to witness progress since its ground-breaking ceremony last August, a development which has seen the creation of 8,600 short-term jobs for the local community during the construction phase.
“With construction having started in August 2020, the planning, design and construction work has to date delivered significant jobs, training and development to both the communities and small micro and medium enterprises in the region,” Ramaphosa told reporters.
According to the South African leader, the SEZ project has also established the first automotive incubation centre adjacent to it aimed at establishing and nurturing small- and medium-sized enterprises to supply components to the main vehicle manufacturers in the zone.
The main role of automotive incubation centre is to support the implementation of the country’s Economic Reconstruction and Recovery Plan launched last October to respond to the economic impact of the coronavirus pandemic, he added.
“The SEZ programme promotes an integrative and collaborative approach that strengthens partnership and coordination across all three spheres of government (national, regional and local) as well as between government and the private sector,” Ramaphosa said.
Economic zones are areas which are subject to different economic regulations than other regions within the country.
The economic regulations of SEZs tend to be conducive to foreign direct investment by offering investors various incentives such as favourable corporate tax and value-added tax rates as well as customs relief, building allowances and an employment tax incentive.
Most of the products manufactured in special economic zones are exported, with only a few left for the local market.