President Cyril Ramaphosa says he is encouraged by the decision of the Ford Motor Company to work with government to establish the first Tshwane Automotive Hub at the Special Economic Zone.
The automotive hub, which is part of the expansion of the OR Tambo Special Economic Zone (SEZ), will be developed through a joint partnership between the Department of Trade and Industry, Gauteng Provincial Government and the City of Tshwane.
Broadly, Special Economic Zones are an initiative of government, aimed at repositioning the country in the world economy and have become global tools for social and economic transformation, resulting in exponential growth when deployed.
"This is immensely encouraging, and comes at a time when business, government, labour and civil society must work together to resolve the twin challenges of slow economic growth and unemployment," President Ramaphosa said at the sod turning ceremony of the Tshwane Automotive Hub at the Ford Motor Company in Silverton.
It is estimated that the Hub will create more than 5 000 jobs once fully operational. It is also estimated that the Hub will result in a number of new business opportunities to nearby communities such as Eesterust, Moretele View, Nellmapius and Mamelodi.
President Ramaphosa said there are a number of benefits for bringing business to a SEZ, such as a preferential corporate tax regime, building allowances, employee tax incentives, favourable customs regulations, VAT exemptions and support for capital investment and training.
"This Tshwane Automotive SEZ will positively contribute to our industrial strategy by attracting automotive component manufacturing companies and related services. The development of the Tshwane Automotive SEZ will support the expansion of the incubation centre and contribute more broadly to the development of black industrialists.
"The proposal to establish the Tshwane Automotive SEZ was initiated by the Ford Motor Company to help expand its automotive footprint in South Africa through the attraction of its global suppliers into the country," President Ramaphosa said.
President Ramaphosa said the initiative is proof that partnership between government and the private sector is vital in driving the development agenda of the country.
"This special economic zone further aligns with our new District Development Model, which we call Khawuleza, meaning to hurry up.
"It seeks to address service delivery and economic development challenges through the synchronisation of planning across all spheres of government, working alongside social partners such as business and the community," the President said.
Improving the ease of doing business
Also speaking at the same event, Gauteng Premier David Makhura said for four years, the province had been putting great efforts in reversing de-industrialisation through a ten-pillar programme for Transformation, Modernisation and Re-industrialisation of the Gauteng economy.
"We are pushing ahead in the quest to re-industrialise and modernise the Gauteng economy so that we can make the greatest contribution to Africa's industrialisation, economic integration and structural transformation, in the context of the African Continental Free Trade Area," Makhura said.
Makhura said Special Economic Zones have become the most potent industrial policy instruments for attracting foreign direct investment, increasing employment and growing the manufacturing capacity of nations.
"We are working hard to improve the ease of doing business, and streamline administrative procedures including the time required to set up operations in the country," Makhura said.
Ford Motor Company of Southern Africa CEO Neale Hill said the launch of the Tshwane Automotive SEZ is a milestone achievement following five years of engagement between Ford Motor Company and government, specifically the Department of Trade and Industry.
"It is an exceptionally proud moment for Ford to have partnered with the South African government in the creation and development of the Tshwane Automotive SEZ, as an enabler for economic development for the Gauteng Province, City of Tshwane and the surrounding communities.
"The public-private partnership between all three spheres of government and the private sector is crucial in order to drive growth in the automotive industry, to create more jobs and to boost the economy.
"The government's new region-based model for special economic zones is an important new tool to attract domestic and international investment, which will help businesses to become more competitive on a global scale," Hill said.
The Tshwane Automotive hub is expected to help the country attract new automotive component manufacturers, while also strengthening the City of Tshwane's positioning as an automotive city.
Ford SA will be the anchor tenant of the Hub, crowding in new investments and localisation opportunities for component manufacturers.