‘Let’s strengthen South Africa’s SEZ model’

South Africa’s Special Economic Zones are working – let’s strengthen the model, not abandon it, argues the CEO of the Tshwane Automotive Special Economic Zone, Dr Bheka Zulu.

Special Economic Zones (SEZs) have become the latest ideological battleground in South Africa’s ongoing quest for inclusive growth, industrialisation, and sustainable job creation.

In a recent article on News24, Ann Bernstein of the Centre for Development and Enterprise (CDE) called for the private sector to take over the management of these zones, arguing that government-led SEZs have failed to attract investment or deliver value. While her concerns about state capacity are not unfounded, this blanket assessment misses crucial successes and risks throwing away a powerful economic tool that is beginning to bear fruit, especially in the automotive sector.

At the Tshwane Automotive Special Economic Zone (TASEZ) we are seeing a very different story from the one Bernstein outlines.

TASEZ is the first hybrid model in demonstrating the power of the three-tier government partnership so it brings in a different approach to that used in South Africa’s SEZ sector previously.

Established as a strategic partnership between the Department of Trade, Industry and Competition (the dtic), the Gauteng Provincial Government, and the City of Tshwane, in collaboration with the Ford Motor Company, TASEZ has become a model of effective collaboration between the public and private sectors.

Since its inception in 2020, TASEZ has attracted over R28-billion direct and indirect investment and supported the creation of more than 8 000 construction and permanent indirect jobs, many of which are for young people from previously marginalised communities.

Additionally, more than 10 000 jobs across the supply chain have been created.

Furthermore, more than R1.7-billion, based on a social compact, was spent on SMMEs in and around the City of Tshwane between 2021 and 2024. These are not promises or projections – they are real numbers backed by infrastructure, operating factories, and a thriving ecosystem of component suppliers.

A key enabler of this success has been the decisive role of the state in creating the conditions for investment: building roads, ensuring bulk infrastructure, streamlining regulatory processes, and coordinating skills development through various initiatives.

That said, Bernstein is right to push for more agile, results-driven management. The private sector’s role is not only welcome – it is essential particularly now that government is pushing for a policy discussion for private sector participation. But rather than handing over the reins entirely, we need to deepen the hybrid model that has proven effective in cases like TASEZ.

Government’s role should focus on regulation, enabling infrastructure, and long-term industrial planning, while operators and investors bring in the operational efficiency, market access, and innovation that drive competitiveness.

Indeed, the problem is not that SEZs are state-led, it’s that too many are state-led in theory but lack the kind of collaborative approach that aligns municipal, provincial, and national priorities. Where this coordination exists, as in TASEZ, we see tangible results. Where it doesn’t, frustration festers.

The automotive sector, supported by the South African Automotive Masterplan (SAAM 2035), is uniquely positioned to demonstrate the value of SEZs. The sector is one of the country’s largest manufacturing contributors to GDP and exports, and it relies heavily on global value chains, just-in-time logistics, and infrastructure precision. An SEZ tailored to these requirements can be the difference between securing a global model’s production or losing it to another country.

South Africa must continue to refine its SEZ policy, not abandon it. This includes tightening criteria for SEZ designation, strengthening management capacity, and measuring outcomes rigorously. But dismantling the model now, just as it starts to show success in strategic sectors, would be a mistake.

Let’s learn from what works. At TASEZ, we welcome robust engagement, and we invite public and private stakeholders alike to visit, assess, and partner with us in shaping the next chapter of industrial development. The SEZ model, when done right, can be one of the most powerful tools in our developmental arsenal.