Business

Mpumalanga project to attract R4.1 billion in investment

2019-10-16 23:00

The area, which is close to eSwatini and Mozambique, has the rail and road infrastructure for a special economic zone, and predicted investments will boost GDP and uplift communities

Primary agriculture in Mpumalanga is set to experience exponential growth with the establishment of the Nkomazi special economic zone (SEZ), which will focus on agroprocessing.

In December, the department of trade and industry gave Mpumalanga the designation to establish the SEZ on 673 hectares of land in the impoverished Nkomazi region, which borders eSwatini and Mozambique.

This project is set to attract R4.1 billion in investment, R3.2 billion of which will be foreign direct investment, according to the Mpumalanga Economic Growth Agency (Mega) business strategy for the Nkomazi SEZ.

Mega envisages that the department will approve its business strategy within 12 months, and will then release the SEZ funds.

SEZs are department-driven industrial estates that aim to grow the economy by attracting foreign direct investment and re-industrialising underdeveloped regions.

They offer relaxed industrial regulations and special tax incentives, which include exemption from import duties on raw materials, equipment and intermediate goods.

Special economic zones
Special economic zones

Mega is currently marketing the project to attract investors.

The entity is also establishing its project management unit, and Mpumalanga’ Economic development MEC Pat Ngomane is expected to announce the special export zone’s board members within a week or two.

The Nkomazi SEZ will focus primarily on agriculture, agroprocessing, nutraceutical products and fertiliser production, as well as meat and leather products.

The expectations are that this project will contribute R97.6 billion to the country’s GDP, and generate R3.5 billion in exports and R5.3 billion in primary agricultural products.

According to Mega, 81 765 jobs are expected to be created in agriculture, 8 275 in construction and 9 505 in related industries.

Themba Camane, the agency’s general manager for properties and infrastructure, said that the province’s farmers would be expected to produce more and, if they lacked capacity, they would have to be developed.

“The biggest employment of the SEZ will be on primary agriculture. Small-scale farmers will surely grow into commercial farmers,” Camane said.

“There will be that interest to develop small-scale farmers as there will be demand for high-end products.”

SEZ
Amount of investment SEZ hopes to attract

The entity wants to produce concentrated mango and orange juice, essential oils from oranges, avocados and lavender, vitamin C pills, cold meats, luxury leather goods, and furniture.

Mega is also looking at establishing a sugar mill, and may use sugar cane to tap into the renewable energy sector and create biofuel.

“The profile of the skills that will be created will be high, and we aim to develop opportunities for those who are uneducated to be able to do something of value,” said Camane.

He added that some investors had shown an interest. One investor is keen on a renewable energy plant to supply electricity to tenants in the SEZ.

The SEZ, Camane said, was situated in Nkomazi because it was close to the N4 Maputo Corridor toll road and the Port of Maputo.

The area also has rail connections to export to markets in the Southern African Development Community and the rest of the world.

Camane said that other governments would be involved to ensure the success of the project as investors would need accommodation, schools and other social infrastructure.



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November 10 2019