Ngqura Port at Coega World-class infrastructure has brought limited returns

(CDE), an independent policy research organisation based in Johannesburg, found in a 2012 report that 3 000 SEZs in 135 countries accounted for a high percentage of foreign direct investment and were a significant source of global manufacturing exports.

But the report also says that businesses and entrepreneurs need to be involved in designing and running SEZs.

“It’s vital that the structures that will govern SEZs have strong representation from small and medium-sized businesses and from potential new investors,” it says.

In another report released around that time the CDE said SA’s IDZ designation process was “loose and open to excessive discretion” by the trade & industry minister. It also found that since the 1990s co-operation and the division of tasks among the public and private sectors had become the preferred model for running successful SEZs.

This means SEZ strategy and policy formulation, legislation, regulation and enforcement and the provision of key public infrastructure be vested with government. But the development and operation of SEZs, including investment in core real estate and services, and the construction, management and marketing of the zones should be vested with the private sector.

“Overall, my sense is that not much has changed and SEZs are not likely to be the game changer the country needs,” says Peter Draper, director of Tutwa Consulting, which analyses policy and regulatory matters affecting business in emerging markets.

“SEZs will always be a second option. The first option is to have a good national trade policy,” he adds

Draper fears SA is creeping towards promaker