economy Archives

Manufacturing could transform the economy and create jobs

By Mandla Mpangase Expanding manufacturing is not merely a desirable goal for Africa, it is an essential foundation on which the continent’s economic transformation, job creation, and long-term prosperity depend. This strong message was shared by Gauteng Finance and Economic Development MEC Lebogang Maile at the Manufacturing Indaba 2025, taking place at the Sandton Convention Centre in Johannesburg. “This year’s gathering takes place under complex global economic and political realities where the African continent, and the entire global south, must re-think its place in the geo-political landscape,” the MEC said. “Re-thinking our place in this landscape also necessitates that we re-think how we are managing our economies and trade relationships,” Maile said. “It is becoming increasingly evident that the future of our continent lies in our ability to strengthen collaborations.” The message resonates strongly with the Tshwane Automotive Special Economic Zone (TASEZ), which has set out on a mission to be a catalyst for employment, transformation, and socio-economic development and industry growth by being a node attracting automotive suppliers and automotive manufacturers, assemblers and supporting services. The MEC noted that agriculture and raw material exports had long been the backbone of African economies, the future lies in a sector that has fuelled the rise of every modern economy: manufacturing. “The expansion of manufacturing is not merely a desirable goal for the continent. It is an essential foundation upon which Africa’s economic transformation, job creation, and long-term prosperity depend.” The manufacturing sector’s ability to absorb large numbers of workers, foster innovation, and build complex value chains, makes it a critical pillar for sustainable development, Maile added. The South African Automotive Master Plan Something that is important to the TASEZ efforts to support the South African Automotive Master Plan 2025, is that of localisation and by extension beneficiation of materials that are mined in the country. The master plan sets out several priorities to deliver on its vision of creating “a globally competitive and transformed industry that actively contributes to the sustainable development of South Africa’s productive economy, creating prosperity for industry stakeholders and broader society”. Included in the priorities is increasing local content used in manufacturing by 60% by 2035 – critical to this is the ability to beneficiate local minerals for use in manufacturing. “Exporting raw materials without adding value reinforces economic dependence on foreign nations that process and manufacture these materials for profit,” MEC Maile noted. Manufacturing offers an opportunity to move up the value chain, diversify economies, and reduce dependence on volatile international markets. “The continent’s demographic dividend could be the most important instrument in defining the future of the manufacturing sector,” he added. Manufacturing is also uniquely placed to provide the scale and diversity of jobs required for Africa’s youth – Africa has a young population that is growing. It is expected that the continent’s population will double by 2050 to reach 2.5 billion people, with the majority being under the age of 25. “Manufacturing can offer employment across a spectrum of skill levels, from low-skilled assembly to high-skilled engineering. Moreover, manufacturing jobs tend to offer higher wages, better job security, and more opportunities for advancement compared to informal and even agricultural work.” Adding value – and jobs Value addition not only increases export revenues but also fosters the development of supporting industries such as packaging, transportation, marketing, and financial services. These interlinked sectors create a multiplier effect, generating jobs and boosting incomes across the economy. “In the Gauteng Province, we see the value of our investment in the manufacturing sector,” Maile said. It is the largest sector in the provincial economy, employing more than 500 000 people, and is also the biggest in South Africa, contributing more than 33% to the gross domestic product. Manufacturing is also a powerful conduit for technology transfer. “As African firms engage in manufacturing, they gain access to new machinery, production processes, and management techniques.” Partnerships with foreign firms and integration into global value chains further accelerate the transfer of knowledge and skills. At the moment, Africa’s share of global manufacturing output remains less than 2%. “But the continent’s potential is enormous,” MEC Maile said. The African Continental Free Trade Area, which seeks to create a single market of over a billion people, offers an unprecedented opportunity for manufacturers to achieve economies of scale, access new markets, and increase competitiveness. “With the right policies, African manufacturers can integrate into global value chains, supplying not only regional markets but also Europe, Asia, and the Americas.” Despite its promise, the development of manufacturing in Africa faces significant hurdles, including inadequate infrastructure, unreliable energy supplies, limited access to finance, bureaucratic red tape, and skills gaps. “Addressing these challenges requires coordinated action by governments, the private sector, and international partners.” Key is investing in infrastructure. Reliable roads, ports, energy, and digital networks are essential for competitive manufacturing. “We must also prioritise improving the business environment. Streamlined regulations and transparent governance attract investment and foster entrepreneurship.” Skills are needed Another message from Maile hit home for TASEZ: making the building of human capital a key priority. TASEZ has launched its training academy to provide business-related skills to small, medium, and micro enterprises (SMMEs) as well as technical skills to workers who will be dealing with a changed automotive manufacturing sector that is focused on new energy vehicles. “Education and vocational training tailored to industry needs will ensure a skilled and adaptable workforce,” Maile told the Manufacturing Indaba. In addition, regional integration is one of the most critical priorities if the continent is to realise its manufacturing potential. “Strengthening trade ties and harmonising regulations across borders is crucial,” the MEC said. “Regional integration significantly boosts manufacturing economic development by expanding markets, fostering specialisation, and promoting innovation and efficiency. It allows countries to overcome limitations of smaller domestic markets, creating larger customer bases and facilitating economies of scale in manufacturing.” Integration also encourages specialisation within regional value chains, leading to increased efficiency and competitiveness. In his conclusion, the MEC reminded the audience: “The choices made today will

Gauteng MEC for economic development to table budget vote

News / By Jenny Tennant

By Mandla Mpangase Gauteng’s MEC for economic development, Lebogang Maile, is gearing up to deliver the Department of Economic Development’s budget vote in the Gauteng Legislature on Wednesday, 16 July 2025. The budget vote is a critical tool that shapes the economic landscape of the province, creating investment opportunities, allowing for robust and diverse business development, as well as transforming the economic sectors to include emerging entrepreneurs, small, medium and micro enterprises (SMMEs), and township-based businesses. It is a critical tool in ensuring that the services are delivered to Gauteng’s residents. With its focus on strengthening the impact of the province’s special economic zones (SEZs) and the automotive manufacturing sector, the Tshwane Special Economic Zone (TASEZ) is looking forward to hearing what MEC Maile has planned. As the country’s flagship SEZ, TASEZ is eager to play its part in growing the province’s economy and promote infrastructure development. TASEZ is the first hybrid model created though the strategic partnership of all three tiers of government 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 in 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 was spent on SMMEs in and around the City of Tshwane between 2021 and 2024. This was a result of a social compact between TASEZ and its surrounding communities. Gauteng, the economic heartland of the country, sets the pace for South Africa’s growth so what is said in the MEC’s speech should be of importance to all: young students need to know what opportunities may lie ahead, businesses will want to understand the government’s priorities and where companies can support transformation, residents want reassurance that the province they live in provides security economically and socially. It must be a giant step in achieving the vision set out in the country’s National Development Plan: to eliminate poverty and reduce inequality by 2030. As the NDP notes, this can only be achieved if South Africa draws on the energies of its people, grows an inclusive economy, builds capabilities, enhances the capacity of the state, and promotes leadership and partnerships throughout society. By understanding the provincial budget, all South Africans can gain insight into how public resources are used and can better advocate for policies that will benefit their communities. It is not just about numbers; it is about the services, opportunities – and costs that shape everyday life.

Empowering youth to drive the future of automotive manufacturing

News / By Jenny Tennant

By Dr Bheka Zulu: CEO of TASEZ Young people have the power to reshape South Africa’s automotive manufacturing sector; they are driven, they are innovative, and they are prepared to adapt – much like the young people who united against their circumstance in 1976. This 16 June, as we remember the bravery of the young generation who rose up against oppression and fought for their right to education and opportunity, their fight must continue – this time against poverty and barriers that block economic opportunities. Currently, South Africa faces a youth unemployment rate of 62.4% among individuals aged 15-24 years. Today, it is our responsibility to ensure that the promise of economic empowerment and industrial transformation reaches every young South African. Across the globe, industries are evolving, and automotive manufacturing is no exception. We are witnessing a profound shift, driven by technology, sustainability, and the growing need for innovation. Yet, the question we need to ask is who will lead this transformation? The power of the youth Young minds bring fresh perspectives, creative problem-solving, and a deep understanding of emerging technologies. With access to the right skills, opportunities, and platforms, they will be the pioneers of change, ensuring that South Africa remains competitive in the global automotive landscape. With the staggering unemployment figure, we must invest in skills development programmes that equip young people with advanced technical expertise, digital proficiency, and leadership abilities. These initiatives should align with global trends such as electric vehicle production, automation, and artificial intelligence in manufacturing. Through strategic partnerships between government, private industry, and educational institutions, we can create training programs that meet the demands of modern automotive production. Programs like apprenticeships, vocational training, and STEM education are not just investments in individuals; they are investments in the future of our economy. Small, medium, and micro enterprises While established corporations dominate the automotive sector, the backbone of any thriving economy lies in its small, medium, and micro enterprises (SMMEs). These businesses foster agility, creativity, and adaptability—traits essential for industry transformation. SMMEs contribute approximately 34% to South Africa’s GDP and employ over 60% of the workforce. By empowering young entrepreneurs with access to funding, mentorship, and market opportunities, we can ensure that innovation flourishes within the automotive sector. SMMEs are the lifeblood of the country’s economy, and they are central to TASEZ’s mission of inclusive growth. In Phase 1 of its development, TASEZ invested R1.7-billion in 229 SMMEs from communities like Mamelodi, Eersterust, and Nellmapius. This investment, representing 43% of TASEZ’s construction budget, exceeded the national target of 30%. Of this, 6.2% went to women-owned businesses, 18% to youth-owned businesses, and 2% to businesses owned by people with disabilities. These SMMEs supported 5 071 construction jobs, with 60% going to youth and 18% to women, and 3 311 permanent jobs, with 65.47% for youth and 32% for women. As TASEZ moves into Phase 2, it anticipates that a further R1.1-billion will be spent on SMMEs and over 6 000 jobs will be created. TASEZ and its youth initiatives The Tshwane Automotive Special Economic Zone (TASEZ) is committed to creating an ecosystem where young innovators and business owners can thrive. We are committed to harnessing the energy, creativity, and potential of young South Africans to revolutionise the automotive industry. The automotive manufacturing sector, which contributes 5.3% to South Africa’s GDP, faces challenges like global competition and technological disruption, yet it holds immense potential for growth. We recognise the importance of integrating SMMEs into the automotive supply chain. By ensuring that locally owned businesses have access to procurement contracts, technical training, and growth opportunities, we are not only strengthening our economy but also creating sustainable jobs for young people. The TASEZ Training Academy, established in 2024, works closely with training institutions, Sector Education Training Authorities (SETAs), and industry, TASEZ is working hard to enable emerging entrepreneurs to develop cutting-edge solutions that will define the future of mobility. Emerging entrepreneurs need support on multiple levels, access to markets and finance, skills development and mentorship in business, and industry networking opportunities and information. The TASEZ Training Academy tries to support young South Africans on all these levels. With the industry rapidly evolving and moving towards new energy vehicles, mechatronics, and robotics, the TASEZ Training Academy has prioritised skills development for the industry’s future. In 2024, the academy celebrated the training of 526 young people from local communities in safety, health, environment, and quality skills critical to the automotive value chain. Working with various SETAs, the TASEZ Academy has set aside funding for 40 engineering degrees, 20 master’s degrees, and 10 PhDs to cultivate local intellectual property and nurture black engineers. These efforts align with the National Development Plan’s goal of producing 30 000 artisans annually by 2030, ensuring our youth are equipped to lead in a digitised, green economy. New energy vehicles As the global automotive industry is shifting towards sustainability, and South Africa must keep pace. In 2023, electric vehicle sales in South Africa surged by nearly 83% compared to the previous year. This growth presents an opportunity for young professionals to lead the charge in new energy production, battery technology, and sustainable mobility solutions. By investing in skills training for new energy vehicle manufacturing and maintenance, we can ensure that South Africa remains competitive in the global automotive market. Building a new future To the youth of South Africa, the time is now to embrace technology, invest in skills, explore entrepreneurship, and become the architects of an automotive industry that is world-class, sustainable, and inclusive. To the industry leaders and decision-makers, the time is now to work together to ensure youth-led initiatives receive the support they need – the time is now to a sector that does not just produce vehicles but empowers communities and transforms lives.

TASEZ launched Phase 2 ahead of hosting SOPA 2025

News / By Jenny Tennant

By Mandla Mpangase Africa’s first automotive city, the Tshwane Automotive Special Economic Zone (TASEZ) marked a significant milestone with a sod-turning ceremony, unveiling Phase 2 of its development, prior to hosting the 2025 State of the Province Address. This event, held on 23 February 2025, underscored TASEZ’s role in Gauteng’s economic growth and job creation strategy. On a small, cleared patch of land, three yellow earth-moving excavators raised their buckets in salute at the arrival of Gauteng Premier Panyaza Lesufi. The premier joined the shareholders and executives of TASEZ to ceremonially turn the soil to signify the start of development. Lesufi was joined by the TASEZ chairperson Lionel October, and CEO Dr Bheka Zulu. Others in attendance at the event included: TASEZ board members Susan Mangole and Vuyo Zitumane; the CFO Rebecca Hlabatau; the Speaker of the Gauteng Provincial Legislature Morakane Mosupyoe along with the Deputy Speaker Nomvuyo Mhlakaza-Manamela; Gauteng Provincial Legislature Chair of Chairs Rev Dulton Adams; the City of Tshwane’s Deputy Mayor Eugene Modise; President of the Ford Motor Company of Southern Africa Neale Hill; and Ford’s Corporate Transformation Manager for South Africa Esther Buthelezi. The small gathering belied the significance of the moment: the youngest of South Africa’s special economic zones was growing up. Zitumane told the gathering that Phase 2 of TASEZ is set to attract R6.1-billion in private sector investment, a crucial injection into the province’s economy, and will create more than 6 000 jobs in construction and permanent employment. In addition, like in Phase 1, Phase 2 will see an investment by TASEZ into small, medium and micro enterprises of R1.1-billion. Most importantly, Phase 2 also sees the creation of a centre of excellence for the automotive manufacturing sector, with the TASEZ Training Academy providing skills for the future, including for the emergence of new energy vehicles. Lesufi emphasised the transformative impact of these developments: “This is real economic transformation in action, where factories rise, businesses grow, and communities thrive.” TASEZ is solidifying its position as a key driver of Gauteng’s economic vision. The zone’s focus on automotive manufacturing and innovation aligns with the province’s broader strategy to boost economic growth and address unemployment. With Phase 2 underway, TASEZ is poised to further enhance its contributions to the city’s, the province’s and the country’s economy, solidifying its status as a vital economic hub.

TASEZ – it’s time for the lions to tell their story

News / By Jenny Tennant

By Mandla Mpangase By hosting the opening of the Gauteng Provincial Legislature and the State of the Province Address at the Tshwane Special Automotive Zone on 24 February 2025, the provincial government – one of TASEZ’s shareholders – acknowledged how far the special economic zone has come in opening up the economy. Premier Panyaza Lesufi took the opportunity to talk about the impact TASEZ has had in its short existence as he began his speech. “Five years ago, where we are now, there was nothing but empty ground. Today, as we hold this State of the Province Address in this facility, we can show how we are moving forward, helping drive South Africa – the future of manufacturing starts here.” TASEZ – Africa’s first automotive city – sees the production of more than 700 cars every day, 200 000 annually thanks to the component manufacturers based in the special economic zone, next to Ford’s Silverton plant. The premier referenced the proverb “until the lions have their historians, tales of the hunt shall always glorify the hunter” pointing out that today, the lions are telling their story. “We are ready to tell our story,” he said, adding that the venue of the State of the Province Address stood as testament to the things that are being done in South Africa. “We have 8 000 people who were unemployed three years ago, that have jobs today.” Gauteng was proud to be the home of Africa’s first automotive city. Lesufi pointed out that TASEZ grew out of a multi-tiered partnership between the Gauteng Province, the national Department of Trade, Industry and Competition, and the City of Tshwane – and of course, the drive from the investment made by the Ford Motor Company of Southern Africa in expanding its plant. Phase 1 of TASEZ saw a total investment of R26-billion, with more than 8 000 jobs created in construction and permanently. “This innovation has also brought opportunities for 229 small businesses to work within the zone. They benefitted from R1.7-billion set aside for procurement packages from small, medium and micro enterprises (SMMEs).” Attention was paid to women, youth and people with disabilities in particular. “This special economic zone is a demonstration of what can be done by other special economic zones to create opportunities.” Premier Lesufi told the legislature that earlier in the day he had attended a sod-turning ceremony to mark the start of TASEZ’s Phase 2 development. Phase 2, the premier noted, will expand the SEZ and attract an investment of R6.1-billion from private sector investment, and R3.9-billion from government partnerships. This phase will see the creation of 6 150 jobs, and, like Phase 1, SMME procurement spend has been ringfenced to the amount of R1.1-billion. “We don’t want to simply build cars, we want to transfer these skills to our young people,” Lesufi said. “We are proud that Phase 2 is going to include an academy to train the young people for the future.” Reflecting on the fact that TASEZ was chosen to host the 2025 State of the Province Address, CEO Dr Bheka Zulu said: “History has been rewritten here, not with a pen, but with the presence of the people.” TASEZ is the first SEZ to host such a significant event. “Scores of people from all walks of life came to be part of this event,” Dr Zulu added. “For us, that is a significant indication that we are an organisation of choice.” The lions have told their story.

Collaboration and partnerships key to development

News / By Jenny Tennant

By Mandla Mpangase The Tshwane Automotive Special Economic Zone (TASEZ) has signed a Memorandum of Understanding with the Gauteng Provincial Legislature ahead of hosting the official opening of the legislature and the 2025 State of the Province Address next week. TASEZ CEO Dr Bheka Zulu and the Gauteng Provincial Legislature Acting Secretary Linda Mwale ceremonially signed the document during a media briefing at the Gauteng Provincial Legislature offices on 20 February 2025. Prior to the signing, members of the media were told of the strong partnership between the Legislature and TASEZ. The legislature’s Chair of Chairs, Bishop Dulton Adams said that holding the official opening of the legislature and State of the Province Address at TASEZ was of particular importance. “This is not just a venue. It is a symbol of economic transformation, industrialisation and investment driven growth.” The official opening of the legislature and the delivery of the State of the Province Address takes place in the TASEZ hub on 24 February 2025. TASEZ, he said, boosts Gauteng’s automotive industry, driving investment in economic growth, creating jobs and developing skills, and positioning Gauteng within the African and global trade environment. “This is a milestone moment for TASEZ,” the CEO told the media. Dr Zulu explained that TASEZ, known as Africa’s first automotive city, was a new kid on the block in terms of South Africa’s special economic zones (SEZs), but it was punching above its weight. The SEZ was supported by all three tiers of government: the Gauteng Province; national government, through the Department of Trade, Industry and Competition; and local government, through the City of Tshwane. “All these shareholders contribute to us, as an organisation, changing the landscape of SEZs and the automotive sector.” TASEZ, in the capital city of Tshwane, sits in the logistics crossroads of the country, reaching east and west, north and south, with access to the neighbouring states as well as globally through rail and port connections to the Durban Port. The SEZ is also supporting the creation of a rail link to Gqeberha, in the Eastern Cape. “What makes us unique and special is that our core focus is in the automotive sector, and that’s where we’ve made changes,” Dr Zulu said. The automotive industry an important contributor to the country’s economy. In 2024 the industry’s entire value chain contributed 5.3% to the GDP. The industry also employees more than 500 000 people across its value chain. “TASEZ has been able to design a world class automotive manufacturing hub providing a conducive environment for investors, where they can harness their potential of economic growth,” the CEO added. “With the global shift towards sustainable practices of a greener future, TASEZ has embraced a number of green energy solutions centred on solar power.” This was part of the SEZ’s cleaner strategy. “One of the reasons for this,” Dr Zulu said, “is that 65% of the products manufactured in TASEZ are for export.” These products reach more than 100 countries around the world, including Europe, where the continent has set 2035 as the deadline for a net zero carbon footprint. Dr Zulu also pointed out that the industry was moving towards new energy vehicles, which will require new skills and a new way of doing business. He took the media through the economic impacts TASEZ had made during it Phase 1 development: TASEZ spent R1.7-billion on construction procurement from small, medium and micro enterprises (SMMEs) – 43% of the total construction budget, well above the national target of 30%.Some 229 SMMEs benefitted, with 6.2% of the procurement spend going to women-owned businesses, 18% to youth-owned businesses, and 2% to people with disabilities.The SMME beneficiaries are based in the local communities of Eersterust, Mamelodi and Nellmapius. Some 5 500 jobs were created in construction, with 18% of the jobs going to women, 60% to youth, and 0.86% to people with disabilities. The SEZ created 3 311 permanent jobs, with 32% going to women, 65.47% to youth, and 0.83% to people with disabilities. Ford, the anchor tenant of TASEZ, has managed to expand its production by 40 000 units a year, up from 160 000 to 200 000. “What this means,” Dr Zulu said, “is we produce a car every minute. By the end of today, more than 720 cars will have been manufactured.” As TASEZ beings to unroll its Phase 2 development is has set up a center of excellence “because there is a growing need to upskill, reskill and prepare us, and our communities, for the advancement of technology”. TASEZ has raised additional funding specifically for skills development. “That’s how serious we are in terms of transforming and innovating this country – we can’t grow without our people. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.

TASEZ to host 2025 State of the Province Address

News / By Jenny Tennant

By Mandla Mpangase Africa’s first automotive city, the Tshwane Automotive Special Economic Zone (TASEZ) is hosting the official opening of the Gauteng Provincial Legislature and the State of the Province Address – the first special economic zone to do so. TASEZ being the venue for this year’s address is a powerful statement; it acknowledges the role the SEZ’s commitment to economic diversification and innovation. The SEZ, with its focus on the automotive industry and related sectors, represents a key driver of economic growth in Gauteng and hosting the event at TASEZ draws attention to the importance of the automotive manufacturing and technology sectors. Addressing a pre-State of the Province Address luncheon on 20 February 2025 the Speaker of the Provincial Legislation, Morakane Mosupyoe, explained why TASEZ had been selected to host this mammoth event. This special economic zone (SEZ) set up in the City of Tshwane was strategically positioned to support the expansion of the Ford Motor Company’s plan in Silverton assembly plant. “When the initial agreement was signed, I was MEC for economic development, so I was part of the team that was negotiating with Ford,” Mosupyoe said. “We had serious competition from Thailand by the way, so we fought for that investment to brought here, and ultimately we got it going.” Ford brought a R15-billion investment to the country to expand its South African manufacturing operations – one of the largest-ever investments in the local automotive industry. With that came further investments from component manufacturers, who were all based in the TASEZ hub, alongside the Ford assembly plant. The impact on the provincial and local economy was noticeable, with new jobs and business opportunities opening up for small, medium and micro enterprises – particularly within the communities surrounding the SEZ. With the first phase of TASEZ now complete – it was set up in a record 18 months, during a global economic crisis and a pandemic, the SEZ is now looking to the future. Premier Panyaza Lesufi decided that because TASEZ is going into its second phase, Gauteng should take the State Of The Province Address to the hub to highlight the work that has been going on there, the Speaker said. “I’m sure the premier will talk to the jobs that were created, as well as the many other impacts that came from the relationship.” Gauteng Province is one of the three strategic state partnerships that support TASEZ, with the other two being the Department of Trade, Industry and Competition, and the City of Tshwane. “We need to appreciate in these relationships boost the automotive manufacturing industry,” Mosupyoe said. TASEZ and its partners, including all its tenants, drive investment and economic growth, create jobs and it develop skills, she added. It positions South Africa as a gateway to Africa and global trade, speaks to infrastructure and economic development. The much-anticipated address takes place on Monday, 24 February 2025, under the theme “Harnessing Parliamentary Diplomacy for the Realisation of Global Solidarity, Equality and Sustainability”. The address is used by the premier to reflect on the provincial government’s achievements and challenges of the past year. It also serves as a platform to outline the province’s key priorities and plans for the year ahead. The State of the Province Address provides a crucial platform for the premier to communicate with the people of Gauteng, allowing for transparency and accountability as the provincial government outlines its key policy objectives and deliverables for this year. No doubt important topics such as economic growth, job creation, infrastructure development, and social service delivery will all fall under the spotlight.

TASEZ has much to celebrate as 2024 and Phase 1 draw to a close

News / By Jenny Tennant

By Mandla Mpangase As 2024 draws to a close the Tshwane Automotive Special Economic Zone has much to celebrate, according to board chair Lionel October. “This is a project that is a shining example of the three government shareholders doing everything that was asked of them,” he adds. “When we asked the City of Tshwane for land, they gave us land. When we asked the Department of Trade, Industry and Competition to provide support for the Special Economic Zone’s top structures they did so to the tune of over R2-billion. The Gauteng government also played their role in providing bulk infrastructure, also at a cost of almost R2-billion.” Their drive and determination saw TASEZ rise from the dusty highveld in 2020 to becoming a fully-functioning, technologically innovative automotive manufacturing hub within two years. “The development happened in a record time,” October points out. During the construction phase 5 000 jobs were created, with 40% going to small, medium and micro enterprises in the neighbouring townships of Eersterust, Mamelodi and Nellmapius – “another record achievement”. In addition, a further 3 200 permanent jobs were created. TASEZ focuses on its priorities of job creation through aggressive infrastructure development, growing small, medium and micro enterprises, inclusion and accelerating economic reforms to unlock investment and growth. “People ask why government places such an emphasis on the automotive industry,” the chair notes, adding that it is an industry that requires highly skilled workers, and with that comes better wages. The South African automotive sector is one of the most visible sectors in receiving foreign investments and contributes significantly to the growth of the economy. It is an industry that generates millions both nationally and for the City of Tshwane. The automotive manufacturing industry contributes 4.3% to the annual gross domestic product and provides direct employment for 110 000 people. But it also goes beyond the initial investments provided by the original equipment and component manufactures, but the ongoing generation of money that grows the local economy. In addition, the automotive manufacturing industry represents the medium technology sector, removing workers from a low wage, unskilled future to the middle income. However, there is now a pressing need to up the ante with the development of new energy vehicles and the rapid progress of technology. “We need to transition into a high technology, high income economy.” And TASEZ is well placed to perform that role, with the establishment of a training academy as part of its Phase 2 developments. “We will have our own campus where we hope to train between one thousand to two thousand young people each year. “Furthermore, we will be working with the Industrial Development Corporation to create a stream of black industrialists in the automotive manufacturing industry,” October says. TASEZ is also exploring investment opportunities related to the manufacturing of NEVs. “It is important that we do so,” October adds. “We have about 10 to 15 years left for petrol vehicles, and we at TASEZ need to be at the centre of the new developments. “The fact that Gauteng is a major automotive market gives us a competitive advantage.”

Business engineering key developmental milestone for SA auto manufacturing sector

News / By Jenny Tennant

By Mandla Mpangase Africa’s first automotive city, the Tshwane Automotive Special Economic Zone (TASEZ), is set to play a leading business engineering role in training a sklled workforce for a new automotive environment that will embrace new energy vehicles (NEVs) and cutting-edge technologies. A number of countries, including South Africa, have announced pledges to achieve net zero emissions over the coming decades. South Africa has set itself the task of zero net emissions by 2050, bringing global energy-related carbon dioxide emissions to net zero by that time to give the planet an even chance of limiting the global temperature rise to 1.5 °C. Many of the country’s automotive export markets have set stringent targets over the next decade and the original equipment manufacturers (OEMs) are gearing up for the change. Research by Deloitte, Automotive Pathways to Decarbonisation, notes that “by 2050, automakers are expected to reduce CO₂ emissions by 90%”. It goes on to note that “to reach these aggressive targets, however, the entire value chain will need to be decarbonised”. TASEZ has also set itself the bold mission of being a key contributor to creating new businesses, ensuring stable affordable energy supplies, and enabling robust economic growth. Pathway for SEZs TASEZ has proactively set out a cost-effective and economically productive pathway for special economic zones (SEZs) in Africa that will yield results for a clean, dynamic and resilient energy economy, dominated by renewables like solar, waste to energy, and hydrogen instead of fossil fuels. These initiatives will enhance productivity and competitiveness for the automotive manufacturing sector, contributing to South Africa’s socio-economic development through creating jobs and transforming the industrial landscape of the SEZs, says TASEZ CEO Dr Bheka Zulu. Deloitte suggests OEMS and component producers adopt circular business models and transition clean energy in both production plants and usage by prioritising sustainability when extracting and processing basic materials, producing vehicles and their parts, and decommissioning vehicles at their end-of-life. “The sector will need to eliminate traditional sector boundaries, involve suppliers and customers in the solution, and foster strong cross-sectoral collaboration.” This is where TASEZ is well-equipped to play a significant transformative role as an SEZ. Its strength is in building strong strategic partnerships, supporting current and potential automotive manufacturing tenants in creating green facilities that incorporate the latest technologies, and helping to train a workforce familiar with future trends within the industry. Based in Silverton, Pretoria, TASEZ sits adjacent to the Ford Motor Company of Southern Africa and provides infrastructure, just in time, just in sequencing, and bespoke services to a range of component investors. A relatively new entrant into the automotive manufacturing space, TASEZ gained traction when Ford announced it would be investing US$1-billion in upgrading its facilities in South Africa to increase its production from 160 000 vehicles a year to 200 000. The Ford Frame plant and 10 other component manufacturers began moving into the TASEZ space in 2020 to make this a reality – against a very tight deadline of some 18 months. The first Ford Next Generation Ranger came off the production line in November 2022. TASEZ strategic goals With that specific target met, TASEZ could expand its focus more broadly to the strategic goals of helping grow the economy and transform the South African automotive industry, as spelt out in the South African Automotive Master Plan; creating awareness and support for the development and growth of the automotive SEZ; attracting automotive and related industries and tenants into the SEZ; and supporting socio-economic empowerment within the surrounding communities. As a new development, focus was also on creating a zone that embraced the United Nations Sustainable Development Goals in helping end poverty, supporting green energy, and the transfer of skills to those previously excluded from the economic sectors. Phase 1 saw TASEZ creating 5 071 construction jobs (with 18% going to women, 60% going to youth, and 0.86% going to people with disabilities), 3 244 permanent jobs within the automotive manufacturing sector (with women representing 32%, youth 65.47%, and people with disabilities 0.83%), and 10 000 supply chain jobs. In addition, TASEZ provided small, medium and micro enterprises (SMMEs) with R1.7-billion in contracts. “South Africa sets a great store on the SMME sector as a driver of economic development and growth,” Dr Zulu notes. The National Development Plan 2030 (NDP) has set a target of 24 million people in employment by 2030, which 21.6 million would be in SMMEs. TASEZ’s Phase 1 development saw 3 244 permanent jobs in the automotive manufacturing sector created, with a further 5 071 jobs in construction. SMME procurement spend totalled R1.7-billion. New developmental phase As TASEZ begins to develop Phase 2, it is worth noting the importance of SEZs to South Africa’s industrialisation: SEZs are intended to attract foreign and local direct investment through offering various incentives; to enhance the country’s export capacity by providing a conducive environment to produce competitively priced goods; and to generate employment opportunities, particularly where there is high unemployment. TASEZ is well aware of the ever-evolving landscape of the automotive manufacturing industry, with NEVs just around the corner, the necessity to embrace Fourth Industrial Revolution skills in manufacturing, and a keen awareness of the need to ensure that everything is done sustainably, with a built-in resilience. Phase 2 sees TASEZ focusing on becoming a Centre of Excellence for current and future skills programmes, entrepreneurial incubation programmes and high-tech education programmes based on the needs of both the automotive manufacturing industry and the surrounding communities. TASEZ Training Academy “Youth development is a key component of our business case,” says Dr Zulu. Achieving net zero by 2050 cannot be achieved without the sustained support, behavioural changes and participation from citizens, particularly in advanced economies,” he adds. “The TASEZ Training Academy will develop high-tech youth empowering initiatives such as Carbon Capture, Utilisation and Storage (CCUS) programmes which will contributes to the transition to net zero in multiple ways. These will include tackling emissions from existing energy assets, providing solutions in some of the sectors where emissions are hardest to reduce, thereby

SA determined to drive towards new energy vehicles

News / By Jenny Tennant

By Mandla Mpangase Consideration must be given to providing incentives for manufacturers as well as tax rebates or subsidies for consumers to accelerate the uptake of electric vehicles in South Africa. This statement by President Cyril Ramaphosa in his key note address at the South African Auto Week 2024 was greeted by much applause by the industry role players. Speaking at the high-level event in Cape Town on Thursday 17 October 2024, the president recounted the recent economic diplomacy efforts of government globally, including in New York, London and Beijing. “Our experience confirms a greater interest in South Africa’s prospects.” South Africa’s auto industry makes a significant contribution to the country’s gross domestic product, which currently sits at 5.3%, a fifth of the value add within local manufacturing comes from vehicle and component production. The auto industry accounts for around 15% of the country’s total exports. “[The industry] continues to blaze a trail in strategic economic markets on our continent, in North America, in Europe, as well as Indonesia.” It is also a major employer, collectively employing half a million people directly and indirectly across the value chain. Importantly, “the sector continues to actively support transformation”. The transformation targets have been set out in the South African Automotive Master Plan 2035. The plan sets out a number of targets: “The Automotive Industry Transformation Fund has supported a number of beneficiaries. It has facilitated market access for black-owned and female-owned firms to the value of R4-billion and supported thousands of jobs across the industry.” This year is a milestone for the automotive industry, marking 100 years of vehicle manufacturing in South Africa since the first Model T Ford rolled the assembly line of the Ford plant in Port Elizabeth (now Gqeberha). Industry leaders have shown great confidence in South Africa. Today the automotive manufacturing footprint has expanded exponentially, with international auto companies now major investors in the South African economy. “They have consistently featured prominently at the annual South African Investment Conference, which was inaugurated in 2018,” the president said, adding that “over the past few years, these companies have invested an average of some R8-billion rand a year.” Component suppliers have also invested a considerable amount into the South African economy – about R4-billion a year. However, the industry faces many challenges, including the transition towards decarbonisation, with a move to cleaner, more sustainable fuels and stringent regulations. “Even as the journey to net zero poses a challenge for the auto industry there is, at the same time, immense opportunity. The local automotive sector needs to position itself to take advantage for the demand of electric vehicles (EVs), new energy vehicles (NEVs) and sustainable fuels.” President Ramaphosa noted that this was a government priority. “The automotive industry has a critical role to play in achieving South Africa’s climate targets. We’re committed to working with the private sector to promote the production of NEVs and the development of the necessary infrastructure to support them.” This includes the beneficiation of critical minerals for the production of NEVs and their associated value chains, as well as the production of batteries and green hydrogen fuel cells for EVs. “We are working to finalise comprehensive NEV policy guidelines that include alternative technologies such as hybrids and plug in hybrids, so consideration must be given to incentives for manufacturers as well as tax rebates or subsidies for consumers to accelerate the uptake of EVs.” The president noted that this was not just about creating a greener future, but also about ensuring South Africa remains competitive in the global market. “This is a major industrialisation opportunity for our country and the region as well, particularly within the context of the African Continental Free Trade Area. This will position South Africa as a forward-thinking green economy.”