Coega says it's making significant progress to boost Eastern Cape economy
RNEWS / 07 JUNE 2019 - 15.22 / STAFF REPORTER
Port Elizabeth - The Coega Development Corporation (CDC), which operates the Coega Special Economic Zone just outside Port Elizabeth, says it is making significant progress to improve the Eastern Cape economy.
“Whilst the recently released stats on the contraction of the SA economy by 3.2% highlights a challenging economic environment. The CDC’s, resolve to positively contribute to the Eastern Cape (EC) economy spells signs of continued growth and improvement.
Image: JOB CREATION: some of the operational investors located at the Coega Special Economic Zone who have Created a multitude of jobs. (below right) Coega walking away with the investor of the year at the Premier Business Awards earlier this year.
"The CDC’s performance during the 2017/18 financial year resulted in an approximately R3.9 billion contribution to the EC GDP. Latest results shows contribution to fiscal revenue: R1.6 bn in national taxes; R1.38 bn in balance of payments; and R2.2 bn impact on households,” says Dr. Ayanda Vilakazi, CDC unit head marketing, brand & communications.
“According to the independent Muffin Report, which examined the impact of the Coega SEZ on local markets, production chains, exports, and employment & wages, most of the 45 operational investors in the SEZ and Nelson Mandela Bay Logistics Park, created more than 100 fulltime jobs on average and 69% of investors reported that their workforce increased over the last five years.
"86% of investors revealed plans to expand their businesses in the near future, while some of them are either on their second or third expansion, such as Coega Dairy."
Women constituted 44% of the workforce at Coega SEZ – a gender balance that is positively contrary to the norm in industrial companies. Previously Disadvantaged Individuals (PDI’s) represented more than half of all the staff employed by 85% of the companies, while 68% of the workforce was between the ages of 18 and 45.
This seemed to indicate that investors in the SEZ are actively implementing SA’s employment equity legislation. It also bodes well for socio economic transformation in a city and province with a relatively young population. Just over 50% of investors said they sourced 78% of their inputs (goods directly linked to production) from Nelson Mandela Bay Municipality and Eastern Cape.
The Muffin Report concludes that the Coega SEZ plays a crucial socio and economic roles in achieving the industrial policy objectives of South Africa as well as the development of the region.
Focusing on CDC’s key performance indicators, in the 2017/18 FY, the Coega SEZ created a total of 17, 943 jobs (9,733 construction jobs and a further 8,210 operational jobs). This led to the CDC exceeding the 112 974 jobs already created since its inception, 20 years ago.
The CDC’s investment pipeline remains positive, which means that there will be ongoing efforts to convert potential investors into signed and confirmed investment projects for the Coega SEZ, thus reinforcement President Ramaphosa’s drive to attract $100 billion within 5 years.
'Coega SEZ is well on its way in cementing its place as a hub for job creation'
In the unaudited 2018/19 FY, the Coega SEZ is well on its way in cementing its place as a hub for job creation. The SEZ has already secured more than 8,000 additional construction jobs and 7,815 operational jobs. These jobs figures, more than any other, demonstrate the significant impact the CDC is making on the EC’s economy, bringing much needed socio-economic relief to many EC communities.
These investments understood correctly translate to families moving a step closer out of poverty by acquiring employment through projects at Coega in various areas.
“In the 2017/18 FY, the CDC secured 14 new investors with a combined investment value of R860 million, while the unaudited 2018/19 FY performance results indicate a staggering 16 new investors signed with a combined investment value of R2.6 billion, exceeding a target of R693 million.
"Currently, as at 31 March 2019, the Coega SEZ has 45 operational investors worth a combined investment value of R 7, 979 billion,” adds Dr. Vilakazi.
The growth trajectory of the organization’s investment in the past four FY’s has yielded a hat-trick of double digit investments dating back to the FY 2015/16 with 17 new investors, FY 2016/17 with 16 new investors, FY 2017/18 with 14 new investors and recently 2018/19 with 16 new investors, bringing the total number of investors over the past four years to 63 with an investment value pledged of R42, 1 billion.
In order to reduce the EC’s economy’s reliance on the automotive sector, the CDC is aggressively pursuing new investments in the petrochemicals, BPO, food processing and aquaculture sectors. Further global growth industries such as pharmaceutical, energy generation and water (security, supply and distribution) projects are also part of the CDC investor recruitment agenda.
Notwithstanding the absence of OPEX funding, which has had a negative impact on the CDC; the organisation has continued to contribute to the growth of small businesses by awarding over 36% of all procurement spent to Small Micro Medium Enterprise’s (SMME). Of particular significance is the SMME procurement spend, which soared to R707 million in FY2017/18.
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER