Coega SEZ a beacon for the future of FDI in Southern Africa

A report issued by Ernst & Young – Africa’s competitiveness in attracting Foreign Direct Investment – concludes that Africa’s FDI seems more evenly spread than ever before.

The report says that East, West, North and Southern Africa hold an almost equal share of the continent’s FDI projects.

With a focus on seven hundred and eighteen (718) FDI projects in Africa for the year 2017, the report highlights an increase of 6% compared to 2016. This is because of an increase in FDI aided by a continuing shift from extractive to sustainable investment.

The long-term approach taken regarding investment in Africa has exploited the temporary nature of low growth rates. This has further encouraged companies seeking to benefit from the sluggish growth environment by investing while currencies are weak and thus, gain a cost advantage.

Moreover, given the positive growth outlook until 2020, investors are willing to invest more. Aligned with prospects of positive growth in FDI projects in Sub-Saharan Africa, is the Coega Special Economic Zone (SEZ) with its continuing efforts to ensure that South Africa remains a beneficiary of sustainable economic growth initiatives.

The Coega SEZ is currently poised with 43 operational investors and boasts an investment portfolio in excess of R7-billion with R5.9 billion accounted for by Foreign Direct Investors. “Demonstrating the concentration of FDI activity in Coega SEZ, projects currently under construction total a combined value of over R12 billion,” says Dr Ayanda Vilakazi, CDC unit head brand, marketing & communications.

“The CDC’s vast array of sectors makes it easy for potential investors to make the SEZ their home. Currently, the SEZ’s new projects under construction include steel/metals – Osho Cement (R600 million investment), pharmaceuticals – Akacia Medical (R100 million) and automotive – HELLA (R53 million),” adds Dr Vilakazi.

Consequently, Coega SEZ is at the forefront of new investment. It is home to some of the major FDI projects in Africa, including the R11-billion BAIC investment (China) and complemented by two existing operational flagship projects: the 342 MW Dedisa Power Peaking Plant (France) a R3.5 billion investment and First Automotive Works’ (FAW) R600-million investment.