industrialisation Archives

TASEZ makes an impact beyond SA’s borders

By Mandla Mpangase In a first for a South African special economic zone, the Tshwane Automotive Special Economic Zone (TASEZ) welcomed the heads of mission from the Southern African Development Community (SADC) to share information and talk about unlocking opportunities for economic growth in the region. On Monday, 1 July 2025 the TASEZ team, headed by CEO Dr Bheka Zulu, rolled out the red carpet for the distinguished SADC delegation – ambassadors, high commissioners, and chargé d’affaires – along with representatives from the Department of International Relations and Cooperation and the Department of Trade, Industry and Competition, and Brand South Africa and Trade and Investment KwaZulu-Natal. This gathering was not just a simple meeting – it was a deliberate step toward weaving stronger ties between neighbours, aligning with the goals of SADC, the Southern Africa Customs Union, and the African Continental Free Trade Area. TASEZ gave the delegation a front-row seat to South Africa’s important automotive manufacturing industry and the exciting opportunities for partnerships and investments that could uplift not just South Africa, but the entire SADC region. Welcoming the SADC delegation to Africa’s first automotive city, Dr Zulu provided a telling context for their visit: TASEZ has a footprint beyond South Africa. “We are part of the 244 plus SEZs that exist in the African continent, and we’re part of the 5 000 plus that exist globally.” Driving industrial growth SEZs are seen as economic and infrastructural drivers. TASEZ was set up to enhance a significant investment from the Ford Motor Company – bringing component manufacturers closer to the Ford factory in Silverton, ensuring a streamlined just-in-time and just-in-sequence provision of essential parts for the Ford Ranger. Critical to the success of TASEZ was the joint strategic partnership between all three tiers of government via the Department of Trade, Industry and Competition, the Gauteng Department of Economic Development, and the City of Tshwane along with catalytic partnerships with the private sector. Over the five years TASEZ has been in development, is has seen 8 000 direct jobs and 15 000 indirect jobs created in the value chain. In addition, the SEZ has provided R1.7-billion towards small, medium, and micro enterprise (SMME) projects. “We’ve been a catalyst for about R30-billion investment to date,” Dr Zulu. He noted that none of this would have happened if it were not for the facilitation of the diplomats. Dr Zulu emphasised the lessons learnt by TASEZ during its development, offering to share the hard-earned knowledge with SADC. “We have a test case, a real case that has worked in the short time of five years … TASEZ has been a game-changer in an industry that contributes 5.3% to the country’s gross domestic product (GDP). “The contribution of TASEZ with its partners within for Ford, we are looking at having contributed 1% to the GDP,” Dr Zulu noted. Cross-border partnerships However, regional integration was important to the SEZ. “We cannot grow alone as a country; we need to grow with our brothers and sisters within the south and the continent.” Manufacturing development in Africa is viewed as an opportunity to lessen dependence on commodities and engage in economic diversification as way to boost competitiveness in the region. Despite this, the continent still accounts for a very low share of global manufacturing and global manufacturing exports. Recent research indicates that economic development requires structural change from low to high productivity activities and that the industrial sector is a key engine of growth in the development process, most particularly the growth of manufacturing development. Diplomatic missions play a crucial role in facilitating investment flows and promoting economic cooperation between countries. They serve as an important conduit for information sharing, networking, and advocacy on behalf of their countries. The goals of the joint meeting were: SADC’s Vision 2050 Andrew Maswanganyi, from the Department of International Relations and Cooperation’s Directorate: Economic Integration and Infrastructure, pointed out that regional integration was about “the small things we do”. He noted that SADC’s Vision 2050 was an important strategy looking to create a region where its people have food security, are healthy and educated. SADC’s Vision 2050 aims to create a peaceful, inclusive, and competitive region that is middle-to high-income industrialised, where all citizens enjoy sustainable economic well-being, justice, and freedom. It is built on the three pillars of industrial development and market integration, infrastructure development, and peace, security, and good governance. The meeting at TASEZ was “an opportunity for South Africa and its sister countries to cement strong bonds of friendship”, Maswanganyi said. The chairperson of the SADC group, Zimbabwe’s ambassador David Hamadziripi voiced appreciation of the opportunity witness first-hand what is being done in South Africa in its push for industrialisation. The visit by the delegation “not only deepens our understanding of South Africa’s industrial strategy but also speaks to the spirit of regional cooperation in shared development”, Hamadziripi said. Some of SADC’s member states were grappling with the imperative of industrialisation, job creation and inclusive economic transformation. SEZ’s as catalysts for growth “This special economic zone is a testament to how targeted investment, infrastructure development and strategic collaboration between government, the private sector and local communities can create a dynamic industrial hub with strong linkages to both domestic and global value chains.” TASEZ offers important lessons on how SADC can leverage special economic zones to drive manufacturing innovation and trade competitiveness, while also building infrastructure, promoting SMMEs, building critical skills and creating opportunities for young people. “Special economic zones can serve as a model or as model platforms for collaboration with the potential to align such initiatives with cross-border supply chains, promote investment partnerships and share these practices across our member states.” Hamadziripi added: “We are also cognisant that industrialisation can be driven by a combination of factors, including policy coherence, skills development, innovation and infrastructure investment.” The visit to TASEZ was not just about observing, but also about learning and exploring how SADC can replicate and adapt these lessons to their respective countries. The automotive sector has

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

News / By Jenny Tennant

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. This article was first published in News 24 Business: South Africa’s SEZs are working – let’s strengthen the model, not abandon it 18 June 2025

‘Vision with action can change the world’

News / By Jenny Tennant

It is fitting, in a month where the world remembers former president Nelson Mandela, that the Minister of Trade, Industry and Competition, Parks Tau, opened his budget vote address with a quote from Madiba: “Action without vision is only passing time. Vision without action is merely day-dreaming. But vision with action can change the world.” These words reverberate within the Tshwane Automotive Special Economic Zone’s core, sitting at the heart of the special economic zone’s (SEZ) ethos. Speaking in Parliament on 16 July 2024, Minister Tau noted that the words also echo the country’s aspirations to build a dynamic, industrial and globally competitive South Africa that is transformed, inclusive and equitable. This is “anchored on industrialisation, transformation, job creation and building a capable and developmental state”. The minister emphasised the importance of manufacturing-led growth. “Manufacturing creates jobs in upstream and downstream sectors,” Tau explained, adding that these jobs were typically permanent and paid decent wages, with workers able to access to skills development and career path opportunities. Instruments such as the South African Automotive Masterplan are crucial; with their focus on supporting localisation, increasing investment, and creating and retaining jobs. “We have industrial capabilities as a country,” he added. The Department of Trade, Industry and Competition (the dtic) would, in identified industries, work closely with relevant state-owned entities and industry to support local manufacturing of key products and to create jobs. Growing the export markets Of importance to TASEZ, is the fact that the minister identified the need to expand and improve exports. South Africa’s automotive sector already exports the bulk of the vehicles manufactured here. In May 2024, naamsa noted that “record high vehicle exports ensured that the automotive industry outperformed the rest of the manufacturing sector” last year. “The export value of vehicles and automotive components increased by R43.5-billion, or 19,1%, from the R227.3-billion in 2022 to a record R270.8-billion in 2023, comprising 14,7% of total South African exports.” Naamsa noted the export performance included “record exports to all major regions, including the European Union, Africa, the Southern African Development Community, and North America”. Minister Tau pointed out that South Africa’s location at the tip of “the second-fastest growing region in the world”. To reduce a dependence on a small domestic market, “the dtic will implement new export measures, coupled with expanding the current measures and improving their effectiveness” and will work towards expanding its export footprint through BRICS+ (Brazil, Russia, India, China,Iran, Egypt, Ethiopia and the United Arab Emirates), the African Continental Free Trade Area (AfCFTA), the African Growth and Opportunity Act (AGOA) partnership with the United States, and the Economic Partnership Agreement with the EU. Turning to SEZs, the minister reminded parliament that the reason the country had set up SEZs was “to expand economic activity to under-developed parts of South Africa. There are many benefits to this including, creating jobs closer to where our people live and thereby reducing the cost burden poor people carry.” There was no logical or economic rationale for forcing people to live far from their families in increasingly crowded living spaces. “Spatial equity is therefore, a non-negotiable.” Referring to the 11 SEZs established so far, the minister noted: “These SEZs have generated investments amounting to R19.6-billion. In addition, these SEZs provide an on-going revenue stream to national government through ongoing corporate, PAYE and VAT payments. These contributions to tax revenue across over 100 firms located in SEZs far outweigh the initial establishment costs.” Like TASEZ, which is located between Eerstrust, Mamelod and Nelmapius, South Africa’s industrial parks are often located in or adjacent to townships. And these industrial parks provide jobs and incomes to people from the neighbouring townships. “We, therefore, encourage private-sector participation in the industrial parks, in order to assist to improve operations and facilities, and encourage private sector investment.”

Tshwane SEZ shows the way on how to successfully attract investment and create employment

News / By Jenny Tennant

The Tshwane Automotive Special Economic Zone (TASEZ) has set the benchmark for the development of South Africa’s new special economic zones. Special economic zones (SEZs) are key to making South Africa an attractive option for foreign direct investments. SEZs are important instruments in advancing the country’s strategic objectives of industrialisation, regional development, the promotion of exports and job creation. Africa’s first automotive city, based in the City of Tshwane, was an exemplary case in how to develop and set up an SEZ to hit the road running. From being gazette in January 2020 to seeing the first cars come off the production line in November 2022, TASEZ achieved all of this in just two short years – and during the Covid 19 pandemic. The TASEZ case study was central to discussions that took place in a workshop held in Pretoria on Thursday, 11 April 2024, that looked at how SEZs can be implemented speedily. Piloting a new method “We are conscious of the responsibility we have been given in piloting this new model for the development of SEZs,” says TASEZ CEO Dr Bheka Zulu. “It could not have been done without the strong strategic partnerships between our investors and all three tiers of government.” The TASEZ model has now set the benchmark for the establishment of new SEZs. Representatives from the country’s new SEZs joined the teams from the Department of Trade, Industry and Competition (the dtic) responsible for SEZ development, the Industrial Development Corporation’s (IDC’s) SEZ unit, and TASEZ. TASEZ chair and executive director of the Industrial Zones Programme at the IDC, Lionel October, said: “We are here today to begin to standardise and formulate SEZ set up procedures.” The dtic’s Shaun Moses set the scene for the discussion, outlining the policy and strategies driving the development of SEZs. He highlighted the underlying economic challenges South Africa had to tackle: This led to the government identifying a number of objectives to change the economic landscape: combining growth with transformation; boosting local production; growing exports and expanding trade within Africa; increasing investment; establishing a reliable and low-cost energy system while greening the economy; and growing employment. This, Moses pointed out, would be achieved through promoting jobs and higher incomes via industrialisation; building an inclusive economy; and making sure public policies make an impact. Factors for success It was against this background that TASEZ became the pilot project for a new approach to setting up SEZs. There were a number of critical factors that ensured the project’s success: “The scale of the TASEZ project demanded a well-coordinated, systematic and objective approach in responding to the socio-economic performance targets, job creation and SMME opportunities.” Crucially, it was the agile project management approach that ensured TASEZ’s success. Key factors to this success were: One of the proposals to speed up the development of new SEZs, put forward by the technical advisor of the Industrial Zones Programme at the IDC, Dr Siyabonga Simayi, was the creation of multi-sites, or the extension of the boundaries of existing SEZs, to incorporate the development of new SEZs. This would see the development of a zone with more than one site, or the development on land that did not share a border with the existing SEZ. The licence of an existing Industrial Development Zone could be used to facilitate the creation of new SEZs, cutting down on read tape and allowing for a speedier and more agile process, Dr Simayi told the workshop. This would see a single licensee, operator and entity, with one management team and board; single operating systems and processes, and a single budget with one audit process. The workshop concluded by agreeing that there was a need to develop clear guidelines and operating procedures to implement successful SEZs within two years. As Stieneke Jensma, the chief operations officer of the Industrial Zones Programme at the IDC, noted in summing up the day: “TASEZ has done it – we know it’s doable.”