Instead of incentive, Treasury delivers a slap to the face of investors
With a U-turn on automotive special economic zones, the ragged red carpet is pulled out from under them
On the eve of President Cyril Ramaphosa’s investment conference in November he attended the glitzy launch in Tshwane of a new automotive special economic zone (SEZ) that was developed next to the Ford vehicle factory. The event was another illustration of the government’s determination to raise $100bn in new investment over five years – and they are already comfortably ahead of target.
So, what went wrong in the budget in February?
The Treasury announced in the Budget Review tabled by finance minister Tito Mboweni that only the initial batch of six SEZs will qualify for the package of investment incentives, which are a vital tool in attracting new capital investment. Investors in all newer SEZs, including Tshwane, will not be eligible for SEZ incentives. These include the one adjacent to OR Tambo International Airport, which received a major agro-processing investment after the 2018 presidential investment conference and was expanded by the department of trade, industry and competition in 2019 to attract investors in the manufacture of hydrogen energy fuel battery components. ..