What if South Africa had a Special Economic Zone that was Actually Special?

The current report is intended is intended as a clear statement of what SEZs could offer South Africa in the country’s ongoing, but tragically delayed, quest to achieve faster employment growth. We make the case for SEZs again, because our argument has been enriched and sharpened, but also because South Africa’s debate about SEZs has changed, with new voices – including many in or close to the upper reaches of the ruling party – increasingly expressing interest in implementing an SEZ of the kind we describe below: one that is focused on attracting firms engaged in the production of labour-intensive goods and services intended for export. The most important of these new voices include the African National Congress, the High Level Panel, chaired by former President Kgalema Motlanthe, and the National Treasury. In addition, influential voices such as Joel Netshitenzhe, Executive Director of MISTRA and ANC NEC member, international SEZ expert Claude Baissac, and former CEO of Goldman Sachs for Sub-Saharan Africa Colin Coleman have all also identified themselves with recommendations for the establishment of such a zone. To be clear, not all of these proposals are identical, and there are important differentiators between our proposals and some of the others on the table. It is, nevertheless, encouraging that there are more voices calling for the use of SEZs, and we will have something to say about some of these proposals in the pages that follow. The final reason for this report is that, while South Africa has a number of SEZs, these are not likely to achieve what we think is necessary: the creation of a significant number of low-skill jobs in export-oriented activities. The need for this has never been clearer.