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Tshwane Automotive Special Economic Zone

SA’s auto industry is the backbone of the country’s economic growth

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By Mandla Mpangase The automotive industry holds significant potential for shared prosperity through targeted industrial development, according to South Africa’s Deputy President Paul Mashatile. He was delivering the key note address on 14 August 2025 at this year’s Naacam Show currently taking place in Gqeberha, in the Eastern Cape. The automotive sector is one of South Africa’s most strategically important and internationally linked industries, accounting for 22.6% of manufacturing output and 5.2% of the country’s gross domestic product. Although the sector is a success story of industrial policy, it is important to increase employment in the sector. Currently 115 000 people are employed in the sector, with more than 80 000 of those working in component manufacturing. The deputy president noted that the industry is export-oriented, globally competitive, and plays a vital role in regional and national industrial development. In 2024, the component sector exported R62.5 billion of components. A sector under strain “We must never allow the loss of these gains because of external and internal pressures. I say this with concern because the employment levels in the sector have been under strain due to ongoing economic pressures and reduced production volumes.” Naacam, the National Association of Automotive Component and Allied Manufacturers, recorded 12 company closures over the past two years, affecting the livelihoods of 4 000 individuals. “What is of more concern are the recently released figures by Statistics South Africa showing that the country’s unemployment rate has climbed to 33.2% in the second quarter of 2025, an increase from 32.9% in the previous quarter,” Mashatile said. “This latest figure is a clear indication that the nation’s unemployment crisis remains an urgent concern.” More effort is needed to combat unemployment, including improving education and skills to match labour market demands, promoting entrepreneurship and small enterprises, and investing in public employment programmes to generate jobs. TASEZ is currently attending Naacam to share knowledge and monitor the latest developments and trends in the sector. The deputy president noted that the government supports the automotive industry through a combination of investment incentives, improved policy frameworks, and infrastructure development, including: the Automotive Investment Scheme (AIS), which offers non-taxable cash grants to encourage investment in new models and components; tariffs and incentives available to local producers, aimed at boosting employment and strengthenong the automotive value chain; and Automotive Industry Development Centre (AIDC), which plays a crucial role in skills development, enterprise development, and managing incentive programmes. Guiding the sector is the South African Automotive Master Plan 2035 (SAAM), which aims to build a globally competitive and transformed industry. SAAM goals include growing vehicle production to 1% of global output (1.4 million vehicles), increasing local content to 60%, doubling employment to 224,000 employees, and deepening transformation and value addition, with 25% Black-owned involvement at the Tier 2 and Tier 3 component manufacturer level. The Automotive Production Development Programme Phase 2 is the policy programme intended to support and enable the realisation of the objectives of SAAM. “We recognise the industry’s significant role and see it as the backbone of our economic growth, promoting industrial development and encouraging innovation,” Mashatile said. “I am of the view that by increasing investment in research and development, we can use the power of technology to improve efficiency and sustainability, ensuring that our products and services stay competitive in the global market.” New opportunities for growth could be unlocked through nurturing a culture of collaboration and partnership among manufacturers, suppliers, and stakeholders, he added. Support for the African Continental Free Trade Area “This sector, not just in South Africa but in Africa as a whole, has emerged as a critical area of investment, providing substantial prospects for growth and development.” In this context, it was important to acknowledge the significance of the African Continental Free Trade Area (AfCFTA) agreement on economic integration and industrialisation, which is projected to draw additional international investment into the African automotive industry. “The agreement has the potential to significantly boost the automotive industry across the continent by reducing trade barriers, fostering regional value chains, and harmonising regulations. This could lead to increased production, lower costs for consumers, and a more competitive market.” The implementation of the agreement has the potential to lessen the dependency of African countries on developing countries for automotive components and completed vehicles by promoting regional value chains and increasing local production. “Creating a single continental market for goods and services could potentially lead to increased trade, investment, and job creation within Africa.” However, Mashatile added that this does not suggest that South Africa does not need other nations as trading partners. “We believe in diversifying our investments and engaging in trade with several partners.”  Mashatile explained that the Cabinet has adopted a new trade proposal to the United States that aims not just to settle the 30% tariff but also has ramifications for over 130 other trading partners who may reroute products into the South African market. “I must highlight that there will be repercussions felt throughout the entire value chain if we do not reach an amicable trade agreement with the White House. “It is probable that South African suppliers who provide support to domestic original equipment manufacturers that export automobiles or integrated systems to the United States would experience volume cutbacks. This will put pressure on production planning, employment decisions, and investment choices.” The tariffs threaten to disrupt well-established trade flows and weaken the global competitiveness of South Africa’s automotive manufacturing ecosystem. “However, South Africa remains resilient and steadfast in its efforts to grow and protect our economy. We will continue engaging with the USA to identify practical solutions.” Attracting significant investment and driving innovation, could strengthen South Africa’s manufacturing capabilities and global competitiveness. Proactive transformation of the sector “We can increase localisation with existing and potential new original equipment manufacturer entrants to market, achieving a 5% growth in South Africa’s localisation rate, potentially resulting in R30-billion in new local procurement.” In addition, research has indicated that South Africa is well positioned to localise high-value new energy

SMMEs are levers of innovation-led industrialisation that can diversify and decarbonise SA’s economy

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By Mandla Mpangase The 2025 Naacam Show is taking place at a time when the automotive sector is undergoing transformation that is driven by technology and decarbonisation. “We meet as the global economy faces strong headwinds brought about by new shifts towards unilateralism and protectionism,” the Minister of Small Business Development, Stella Ndabeni, said in her address on the second day of the show, 14 August 2025. “We know the US tariffs will impact the market competitiveness of OEMs, including those located in (the Eastern Cape).” This year the Naacam Show is taking place in Gqeberha in the Eastern Cape, displaying the capabilities within South Africa’s leading manufacturing sector. TASEZ too is attending the Naacam Show, sharing information about the special economic zone. Emphasising the tone set the day before by the Minister of Trade, Industry and Competition, Parks Tau, Ndabeni emphasised that failure to position the country strategically and reprioritise aspects of the South African Automotive Master Plan, could see us falling behind. “This is something all of us need to galvanise around,” she said. “We know we need to tweak our model. Rebates on imports have improved the competitiveness of OEMs but has not enabled the development of local supplier capabilities. “We haven’t built the necessary capabilities in design and innovation, and in specialised components.” The Naacam Show, the minister noted, is more than an industry exhibition. It is a platform to benchmark where South Africa stands as a supplier of components, and provides insights into what the government, original equipment manufacturers, and representative bodies like Naacam need to do to position themselves in a rapidly changing industry. “The overall competitiveness of the South African automotive sector depends on the extent to which we can master vertical integration across the value chain,” Minister Ndabeni added. “Shared economic infrastructure like automotive supplier parks and special economic zones have played an enabling role in promoting such integration, as have industry clusters.” Like the Tshwane Special Economic Zone (TASEZ), the Department of Small Business Development is committed to the inclusion of small, medium, and micro enterprises (SMMEs), including the automotive sector. “The reality is: without deep transformation, the sector will not meet the inclusive growth targets set out in the South African Automotive Master Plan 2035 (SAAM 2035,” Ndabeni said. With its focus on developing SMMEs, the Department of Small Business Development, together with the Automotive Industry Development Centre (AIDC) and the International Labour Organisation (ILO), completed a detailed feasibility study for the establishment of a Gauteng-based automotive cluster. “The study confirmed that such a cluster is not only feasible, but strategically necessary to address coordination gaps, improve supplier readiness and deepen SME integration in the value chain, especially the production of high-quality components by SMEs.”  In addition, department, through the Small Enterprise Development and Finance Agency is leveraging strategic partnerships to support SMMEs through: The Automotive Industry Transformation Fund, which will support 20 black-owned SMMEs through funding, training, development initiatives, and market access programmes. Developing a dedicated incubator with TASEZ to deliver joint infrastructure, skills, and market access programmes. AIDC Incubators: We continue to support incubation hubs to build enterprise capacity and readiness. “These partnerships are grounded in co-investment, shared learning and the common goal of expanding opportunities for small businesses in the automotive space.” The Department of Small Business Development also has targeted financial tools to help SMMEs, such as: The Small Enterprise Manufacturing Support Programme – offering cost sharing grants up to R15-million for production upgrades and localisation. The Supplier Development and Asset Assist Programmes – providing grants and equipment to enable small suppliers to meet industry standards. The Small Enterprise Development Agency Technology Programme – funding testing, quality systems, and productivity tools needed for industry alignment. The minister pointed out that in her 2025/2926 budget vote speech she announced that the department would support one million SMMEs. “I announced the establishment of a development fund, capitalised at R2.95-billion over the medium-term expenditure framework (MTEF) targeting new entrants including micro and informal businesses,” Ndabeni said, encouraging micro enterprises in the automotive after-care and services market to apply. Announced at the same time, were the establishment of a commercial fund for more high growth SMMEs capitalised at just under R1-billion over the MTEF, a women’s fund capitalised at R300-million, and a youth fund also capitalised at R300-million. Ndabeni also spoke about South Africa’s Presidency of the G20 this year, noting that the Department of Small Business Development would leverage South Africa’s role to position SMMEs and startups as critical levers of innovation-led industrialisation that diversifies and decarbonises the economy. “This is especially relevant in sectors like automotive manufacturing, where innovation, localisation and inclusive industrialisation go hand in hand. You cannot do one without the other, and we must build a coherent eco-system to enable such integration.” The minister concluded her address emphasising the country’s commitment to ensuring SMMEs are at the forefront of the industry, as innovators and entrepreneurs, as small producers, as solution providers and as global players.

SA’s automotive sector can model African industrial resilience, says Minister

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By Mandla Mpangase The annual Naacam Show takes place at a defining moment for the South African automotive sector, which is facing intersecting challenges that demand collaboration. With these words Minister of Trade, Industry and Competition, Parks Tau, began his assessment of the automotive manufacturing sector in a key note address to the Naacam audience in Gqeberha on 13 August 2025. This year’s show brings together automotive component manufacturers, public and private sector stakeholders, and service providers to foster collaboration, with the aim of galvanising the industry around the goals outlined in the South African Automotive Master Plan 2035. The automotive manufacturing sector is the cornerstone of South Africa’s manufacturing economy, contributing 5.2% to the country’s gross domestic product and 22.6% of the country’s industrial output. Despite these significant numbers, the industry faces several interconnected challenges, the minister noted. “Yet within these challenges lie transformative opportunities to redefine and leverage our global competitiveness.” The minister went on to urge all stakeholders to unify their actions across three pillars: on localisation, innovation, and inclusive transformation. Urgent challenges Although the industry employs 115 000 South Africans directly, with over 80 000 in component manufacturing alone, it faces the stark reality that domestic sales of locally produced vehicles plummeted to 515 850 units in 2024, far below the South Africa Automotive Master Plan 2035 (SAAM) target of 784 509. In addition, Minister Tau noted: “Importantly, 64% of vehicles sold here are imports, eroding local production scales.” Local content remains stagnant at 39%, well short of the 60% target, he said, adding this was at a time when United States tariffs are impacting significantly on the country’s R28.7-billion automotive exports. These pressures have triggered 12 company closures and over 4 000 job losses in two years. The erosion of industrial value of the sector is exemplified by recent suspensions at Mercedes-Benz and other original equipment manufacturers. The path forward: Strategic imperatives “Localisation is not merely policy compliance, it is existential,” Minister Tau said. “A 5% increase in local content would unlock R30-billion in new procurement, dwarfing the R4.4-billion US export market.” However, to achieve this, “we must act collectively to address some of the bottlenecks to growth”. With this in mind, the Department of Trade, Industry and Competition is reviewing the Automotive Production Development Programme (ADPD) as a comprehensive way of responding to the challenges the sector is facing, but also to ensure regular growth in the sector meets the goals of the SAAM. Some of these reforms include the incentive structure and shifting duty credits to reward manufacturing instead of assembly credits. “Our critical minerals and metals strategy will prioritise beneficiating platinum group metals, copper, and manganese for high-value new energy vehicle components like fuel cells and batteries.” Digitisation, decarbonisation, and diversification global competitiveness hinges on embracing disruption “At the dtic, we have been engaged on a path of developing a new industrial policy which focuses on decarbonisation, digitisation, and diversification. “As Naacam notes, carbon has become ‘part of the cost of doing business and increasingly, part of the value too’.” As the globe shifts to new energy vehicles and competition from China, it is crucial South Africa scale new products such as e-axles and thermal systems, and markets, particularly under the Africa Continental Free Trade Agreement. Referring to development around new energy vehicles, the minister reported that amendments of the automotive production and development programme phase 2 legislative framework for the inclusion of electric vehicles and associated components have been completed. In addition, the relevant amendments to the existing Automotive Investment Scheme (AIS) guidelines are being finalised to align with APDP2 amendments and the energy vehicle legislative framework. “The Taxation Laws Amendment Act, gazetted on 24 December 2024, introduces a 150% capital allowance for qualifying investments in energy and hydrogen vehicle production. It covers assets such as buildings, plant, and equipment brought into use between 1 March 2026 and 1 March 2036.” A critical minerals strategy and battery value chain master plan are also being developed. A comprehensive skills gap analysis was completed under the energy vehicles skills workstream. Curricula and certification programmes are now being developed with Tshwane University of Technology, Cape Peninsula University of Technology, Durban University of Technology, and Unisa. A pilot project involving 100 students is expected to be rolled out in Q1 of 2026 once the academic materials are finalised. Transformation: Scale, skills, and equity “We have walked a long journey with the automotive sector on transformation. It therefore goes without saying that inclusion drives growth.” SAAM’s target of 130 new black-owned manufacturers is advancing, with 26 black-owned small, medium, and micro enterprises (SMMEs) exhibiting at the 2025 Naacam Show. However, pace needs to be picked up. “To this end we are hopeful that the industry will support the endeavour of the Transformation Fund that we are pursuing at the dtic with the view to enhance overall transformation through Enterprise and Supplier Development (ESD) funds.” The minister added: “We need to accelerate skills development to ensure that we prepare our labour force for the dramatic changes that artificial intelligence will bring into the sector.” The government is also working hard to eliminate compliance burdens and reduce red tape which inhibits investment into the country’s automotive sector. “Our policy response is accelerating, and we plan on introducing an Omnibus (General Laws Amendment) Bill which looks to fast-track high impact investments and projects within 90 days.” In addition, the government is looking at the impact of imports into the country and the impact they are having on local production. “We want to grow the sector so our first option must not be to wield a stick but rather offer a carrot to these companies to attract more investment into the country, thereby increasing the value-add of particularly our component manufacturers.” Minister Tau also encouraged the industry to accelerate collaboration. “OEMs need to continue to honour local procurement targets and mentor and invest in SMMEs.” Tier 1 Suppliers must drive equity partnerships and Tier 2/3 development.  “Naacam’s partnership with

Women’s Day celebrations at TASEZ

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The Tshwane Automotive Special Economic Zone took some time out of the day on Friday, 8 August 2025 to celebrate and honour the women staff of the special economic zone the day ahead of South Africa’s Women’s Day. As the women started arriving at work, they were greeted by a significant message playing on the screen at the TASEZ head office reception. The familiar TASEZ logo was prominently displayed along with its well-known pay-off line “Africa’s first automotive city”. But that message soon changed. Breaking from tradition, the TASEZ pay-off line morphed into “National Women’s Month – you are the heartbeat”. Then came an unexpected message – an explanation as to why TASEZ had taken the bold step to amend its pay-off line for August: “We decided to change the branding because you have changed us”. The women were also greeted by TASEZ’s Infrastructure Executive, Andile Sangweni. He acknowledged those in the room, noting they were all women of resilience and strength. “I thank each and every one of you for being the strong women you are – not the women of social media, but the women who stand their ground and excel.” He reminded the group of the historic Women’s March on 9 August 1956, when 20 000 women from across the country converged on the Union Buildings, just a few kilometres from where TASEZ is located, to deliver signed petitions against the apartheid pass laws which severely curtailed the movement of black South Africans. “If I had to characterise the women of that time, they were women of courage, they were women of resilience, they were strong women,” Sangweni said, pausing briefly before adding that when he looked around the room he saw the same. Acknowledging that the women often found themselves in an environment that could be difficult for them, in an environment dominated by men, he saw them always striving to do better and achieve. “I thank you for setting the example, I thank you for passing on the torch to the younger generation.” The women of TASEZ have taken to heart the message from United Nations’s secretary general António Guterres when he said: “When women and girls can rise, we all thrive.”

TASEZ Walks the Talk

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Staff of the Tshwane Automotive Special Economic Zone (TASEZ) traded in their steel-toed boots for sneakers this past weekend as they participated in the exciting 702 Walk the Talk on Sunday, 27 July 2025. Full of energy, determination, and a sense of togetherness, the TASEZ team was ready to shine at one of Gauteng’s most well-known community events in the City of Tshwane. TASEZ serves as a centre for creativity and growth in the automotive industry. It is not only a driving force for economic progress but also helps strengthen social ties and improve employee well-being. Joining the annual Walk the Talk event matches the organisation’s goal of empowering individuals, creating connections, and promoting a lively work-life balance. The walk was not just a fitness challenge; it was a celebration of 45 years of Radio 702 and 25 years of the station’s Walk the Talk. It was a celebration of progress, resilience, and the power of people coming together outside the boardroom and production lines. “It was a great experience to see thousands of people walk. The event was well organised, safe, family-friendly, with great entertainment and support along the route,” said Sanele Sibeko, a finance officer at TASEZ. From laughter shared along the historical route from Freedom Park to the Union Buildings to meaningful conversations between strides. TASEZ’s presence echoed its commitments to both its people and the greater community. Whether on production lines or against the scenic backdrop of the City’s urban landscape, TASEZ continues to prove that its organisation is built to move forward, together. “I initially didn’t want to go, but after being convinced, I can say I enjoyed it and would do it again. It was nice knowing people outside of work, networking, getting to know their real personalities,” said Faith Njamba, a TASEZ monitoring and evaluation intern. “I wish they could do it every six months or so,” said Elias Maleka, an intern in the small, medium, and micro enterprises unit. Senior legal manager, Dinky Mathabela, enjoyed the walk from beginning to end. “It’s not my first time there, but I think this year was better, and I believe next year can be greater.”  

Auto industry continues to drive investment, jobs and innovation

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In his weekly newsletter, President Cyril Ramaphosa wrote about the importance of the automotive manufacturing sector in transforming the economic sector, creating jobs, providing much-needed skills development, and driving innovation.  South Africa has a well-established auto manufacturing industry that is more than a century old. It has proven to be one of the most resilient sectors of our economy.  Since the first assembly plants were established in the Eastern Cape in the 1920s, the auto industry has grown to become the largest manufacturing sector in the country. South Africa’s role in global vehicle manufacturing has expanded and grown.  Auto companies like Toyota, Ford, Nissan, Volkswagen, BMW and Mercedes-Benz have plants here in our country that produce vehicles for the local market and for export to many other countries in the world.   A number of these companies continue to expand their investments in our country. The sector currently supports more than 115,000 direct manufacturing jobs and more than 500,000 across the value chain. It contributes approximately 5.3% to GDP.  However, the industry is under growing pressure. The introduction of stricter vehicle emissions regulations in leading export destinations such as the European Union, as well as new tariffs from the United States, are expected to have a significant impact on the sector.  With exports currently accounting for approximately two-thirds of local vehicle production, it is critical that we strengthen the sector to not only overcome current headwinds, but to ensure its long-term sustainability.  Last week, I attended the launch of BMW’s new X3 plug-in hybrid at the company’s Rosslyn plant in Tshwane. South Africa is the exclusive global production site for this model. The shift from internal combustion engines (ICE) towards hybrid and electric vehicles (EVs) in a number of markets means that green mobility is becoming increasingly important for automotive manufacturers. The latest investment by BMW following their pledge at our South Africa Investment Conference in 2023 is a welcome signal to investors that South Africa remains a favourable place to do business. As Government, we are working to ensure there is an enabling regulatory and policy environment to support the growth of this burgeoning industrial activity.  Our five South Africa Investment Conferences, where we invited companies to make investment pledges that are translated into actual investments, is an important platform for companies to declare their investment intention to South Africa and demonstrate that South Africa is an investable market. Government support to the car manufacturing industry through the Automotive Production and Development Programme will position South Africa as a key global manufacturing base for vehicles of the future.  This isn’t just critical to the sustainability of the sector, but to growing the workforce and skills of the future.  BMW, for example, has a training academy that focuses on competencies like EV assembly and robotics. The company is also a founding partner of the Youth Employment Service (YES), which was established between Government and the private sector to create work experience opportunities for young people. This initiative introduces young people into the world of work for a year of experience and training. Often if they meet the standards of the participating company they stand a good chance of being absorbed as employees of the company. BMW’s participation in this programme has supported more than 3,500 young people with training and work placements across all nine provinces.  We have invited more companies to participate in the Youth Employment Service (YES) programme as broadly as BMW has done. We are working to ensure that more production takes place locally, creating more employment. To do this, we must upskill our workforce and facilitate the creation of new companies across the value chain. As such, we welcome initiatives by the sector to support skills development through initiatives such as the Centre of Excellence at the Tshwane Automotive Special Economic Zone. This centre has an artisan training academy, an incubation hub and a science, technology, engineering and mathematics programme for high school learners.  There are also a number of industry-driven training initiatives focusing on technical and artisanal skills, and deepening collaboration between Government departments, vocational colleges and companies to grow a new skills pipeline. Protecting existing jobs in the sector is paramount, particularly in the light of the looming US tariffs. The need to diversify our export base has become all the greater. We are committed to working with the sector to expand its continental footprint, building on the already strong growth of exports to the SADC region and leveraging the trade relationships that exist.  Amid these challenges, South Africa’s auto industry is making the investments needed to build resilience, protect jobs and lead the way into a new era of green mobility. 

SMMEs – engines of economic growth and regional trade

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By Mandla Mpangase Small, medium, and micro enterprises stand poised to become powerful catalysts for regional trade and economic growth. This was one of the key messages of Gauteng MEC for Finance and Economic Development Lebogang Maile to the delegates at the African Continental Free Trade Area (AfCFTA) Conference taking place on 24 July 2025 in Johannesburg. “Micro, small, and medium enterprises (SMMEs) represent the heartbeat of Africa’s economy,” the MEC said. SMMES across Africa create the most employment, drive innovation and provide much-needed goods and services that sustain communities. In South Africa SMMEs account for 80% of the country’s workforce and create an estimated R5-trillion turnover annually. It is estimated that there are three million SMMEs in South Africa, which employ some 13.4 million people. Of those, 2.5 million are micro-enterprises. Of these micro-enterprises, 72% operate in the informal sector. The SMME sector is vitally important to the Tshwane Automotive Special Economic Zone, which, from its inception, committed to building the local township economies of Eersterus, Mamelodi and Nellmapius. During its Phase 1 development, Africa’s first automotive city ring-fenced R1.7-billion of its procurement spend for SMMES and emerging entrepreneurs. As it expands Phase 2 of its development, TASEZ is planning to increase the numbers of SMMEs it supports through infrastructure projects, the creation of job opportunities, and skills training in both business development and in technical training for the automotive manufacturing industry. SMMEs as catalysts Speaking at the AfCFTA Conference, MEC Maile also noted: “In light of the African Continental Free Trade Area – the largest free trade area in the world by the number of participating countries – SMMEs stand poised to become powerful catalysts for regional trade and economic growth.” The responsibility of the Gauteng Provincial Government, and all the stakeholders attending the conference, is not only to explore the pivotal role of SMMEs in shaping Africa’s economic landscape, but to outline their opportunities and challenges under AfCFTA, the MEC added. It was important to identify the strategies needed to harness the full potential of SMMEs for sustainable development. SMMEs in Africa operate across diverse sectors, from agriculture and manufacturing to services and digital innovation. They drive local value addition, foster entrepreneurship, and serve as engines of social mobility, particularly for youth and women. The latest FinScope MSME South Africa 2024 Survey, launched a few months ago, found that in the South African context of high unemployment rates, particularly among the youth, 30% of SMME-owners are 35 years old or younger. “While this may be considered too low, given that 50% of the adult population are youth aged 16-35 years, and that this demographic constitute 60% of the unemployed population, it indicates the important role that the SMME sector can play in turning the tide of youth unemployment in a continent with the world’s youngest population,” MEC Maile said. SMMEs creating jobs SMMEs are vital for job creation, notably absorbing the continent’s rapidly growing workforce. Their size also allows them to adapt quickly to market needs and to experiment with new products and services, facilitating innovation and flexibility. They also play a significant role in poverty reduction on the African continent, the MEC said, adding that by offering livelihoods to millions, they also play a direct role in reducing poverty and enhancing inclusive growth. The AfCFTA promises to reduce tariffs, eliminate barriers to intra-African trade, and stimulate industrialisation and investment. In doing so it will allow the SMMEs to access a much larger market beyond their national borders and creating unprecedented opportunities for growth by tapping into regional value chains, supplying components, services, or finished goods. “This not only promises gross domestic product growth across the African Union but also sets parameters for attracting investment in a depressed and volatile global economy.” A harmonised market environment would make African SMMEs more attractive to investors, both domestic and foreign, like the European Union. “The integration of markets through AfCFTA empowers SMMEs to play a transformative role in regional trade.” They can do this through enhancing of cross border trade, leveraging AfCFTA to expand their reach. “Reduced tariffs and simplified customs procedures lower the cost of doing business across borders, Maile added. This enables SMMEs to diversify their customer base, mitigate risks, and benefit from economies of scale. SMMEs as innovators In addition to this, they can also act as catalysts in driving innovation and competition. “Exposure to a broader market compels SMMEs to innovate and improve their competitiveness. This, in turn, stimulates higher quality standards, greater efficiency, and the adoption of new technologies,” Maile said. The AfCFTA facilitates the creation of regional value chains, where SMMEs can serve as suppliers, assemblers, or distributors. “By collaborating with firms in other African countries, SMMEs can access raw materials, expertise, and markets otherwise beyond their reach.” Such integration boosts industrialisation and intra-African trade, which remains concerningly low. “Intra-African trade still represents a relatively small portion of Africa’s overall global trade. In 2022, a year after the implementation of the AfCFTA, it reached $102-billion but only accounted for 15% of Africa’s total trade. “However, in 2024, intra-African trade reached $208-billion, representing a 7.7% increase compared to the previous year.” This growth could be attributed to the implementation of the AfCFTA and improved trade policies. The final key catalyst of SMMEs in the context of the AfCFTA is the promotion of inclusive economic growth. SMMEs are often owned or led by women and youth. “Their participation in regional trade under AfCFTA ensures that the benefits of integration are broadly shared. This inclusivity promotes equitable development and reduces inequalities within and between countries,” said MEC Maile. He also noted the AfCFTA creates a fertile environment in which SMMEs could survive, providing opportunities to access to new markets, an improved business environment, technology and knowledge transfer, and finance and investment. However, SMMEs also face hurdles that could hinder their ability to capitalise on AfCFTA such as a lack of information, inadequate access to finance, poor infrastructure, capacity constraints, and a complex regulatory environment. “To

Budget vote a commitment to economic justice, inclusion and transformation

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By Mandla Mpangase Sustainable economic growth requires significant investment in economic infrastructure. With that in mind, Gauteng Finance and Economic Development MEC Lebogang Maile identified eight areas that will help drive inclusive growth and job creation in his budget vote speech presented to the Gauteng Legislature today, 16 July 2025. MEC Maile presented a R1.71 -billion budget for the 2025/26 financial year “We are prioritising projects that drive industrial expansion, urban renewal, and township revitalisation, fostering an environment in which businesses can flourish and contribute to local economic development,” Maile said. In keeping with the national directive to drive inclusive growth and job creation, reduce poverty, and build a capable developmental state, the Gauteng Department of Economic Development has developed a comprehensive five-year strategy and an Annual Performance Plan with these three strategic frameworks front as its focus areas. A decade of economic challenges South Africa’s economic engine – the Gauteng province – has faced a decade of ongoing challenges, including a listless economy, rising unemployment, sluggish investor sentiment, and economic sectors that remain untransformed. In the decade 2014 to 2024 Gauteng’s economy grew by an estimated 8%, rising from R1.313-trillion in 2014 to R1.419-trillion 10 years later, an average of just 0.8% yearly. At the same time, however, the population grew by some 25%. The province’s economy also underwent structural changes, with finance growing to contribute 34% to provincial gross domestic product (GDP), up from 29.2% in 2013, while manufacturing dropped to 14.8%, from 17.9% in 2013. This shift is a significant one. “The manufacturing and construction sectors are crucial employers for our low-skilled workforce cohort,” MEC Maile noted. Like manufacturing, construction too is on a downward trend. Unemployment remains the most urgent socio-economic crisis. Quarter 1 of 2025 showed that Gauteng’s unemployment rate stood at 34.7%, with youth unemployment at 48.4%. However, Maile noted, the South African Reserve Bank projects a promising GDP growth of 1.3% for 2025. “Despite several headwinds threatening this forecast, including the risk of electricity constraints, infrastructure challenges, and trade tariffs concerns, there is potential for significant growth in the South African economy,” MEC Maile said. Eight focus areas The Department of Economic Development will focus on eight areas: Revenue enhancement. Strengthening the province’s fiscal capacity is at the heart of the department’s strategy. Economic infrastructure. Sustainable economic growth requires significant investment in economic infrastructure. Support for SMMEs and cooperatives. SMMEs play a vital role in job creation and economic transformation and need to be supported through financial assistance, capacity building, and expanded market access, ensuring their meaningful contribution to economic growth and employment. Structural transformation. This is about transforming historically marginalised sectors, creating opportunities for disadvantaged groups with a strong focus on Broad-based Black Economic Empowerment compliance and promoting inclusive growth. Building a capable state. Ensuring the provincial government has the institutional capacity, technical expertise, and governance systems necessary to drive inclusive economic growth. Revitalising the township economy. The township economy is a critical driver of employment and entrepreneurship yet continues to face systemic barriers such as limited access to finance, infrastructure deficits, and market exclusion. Re-industrialisation. This will enhance competitiveness, deepening localisation, and fostering sustainable manufacturing value chains. Research and development. This commitment will position Gauteng as a leader in innovation and the knowledge economy, driving long-term competitiveness. As part of its ongoing commitment to catalyse inclusive growth and regional industrialisation, the department has outlined key infrastructure development targets for the 2025/26 financial year, which are central to its objective of operationalising special economic zones across Gauteng by 2030. In addition, the department will also advance the Industrial Parks Programme which is designed to stimulate local manufacturing, support small, medium, and micro enterprises (SMMEs), and revitalise economic nodes across the province. Impact on TASEZ TASEZ is being allocated R122.5-million to continue its facilitation and provision of a secure high tech business environment for manufacturers within the automotive sector. The Gauteng Department of Economic Development is a strategic shareholder in TASEZ, along with the Department of Trade, Industry, and Competition, and the City of Tshwane. Gauteng’s funds go towards TASEZ’s internal bulk infrastructure. TASEZ is now in the process of rolling out its Phase 2 development. “During the next phase of our development, we will continue with our focus on supporting SMMEs through procurement spend and training opportunities and we will also be expanding our support to incorporate black industrialists,” TASEZ CEO, Dr Bheka Zulu, said. In addition, the budget vote also set an an ambitious investment target for Africa’s first automotive city – of attracting R1.5-billion. The growth of the SEZs and industrial parks is being led by the Gauteng Growth and Development Agency, with the aim of unlocking investment, driving innovation, and accelerating job creation. The department also plans to support 2 040 SMME beneficiaries across Gauteng during 2025/26. A total of R769.3-million will go to trade and sector development with a specific focus on SMMEs and cooperatives; R289.5 million will be directed towards integrated economic development services; R134.2 million goes to business regulation and governance; R275.4 million will be spent on economic planning, particularly in research and development; and R244.9-million has been allocated to corporate services and financial management. In his conclusion, MEC Maile said: “Economic development is crucial for improving living standards, reducing poverty, and enhancing the overall well-being of our society. “It drives job creation, attracts investment, and fosters innovation, leading to increased tax revenues and improved public services. “Ultimately, economic development strengthens communities and creates a more prosperous and sustainable future. It is for this reason that we must treat the work of this department as a crucial component of building a better Gauteng.” And in keeping with its own vision of being the benchmark for SEZs in South Africa, while contributing to the growth of the automotive sector, being a major creator of new businesses and a contributor to employment, transformation, and socio-economic development, TASEZ has taken the budget vote message to heart. “As a global role player, TASEZ is a catalyst for economic growth

Manufacturing could transform the economy and create jobs

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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

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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.