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Sector-specific industrial zones are set to transform Limpopo’s economy

The location of the Musina-Makhado SEZ, with links to Zimbabwe, Botswana and Mozambique, promotes the Trans-Limpopo Spatial Development Initiative.

In July 2016 the national cabinet approved the Musina-Makhado Special Economic Zone (SEZ). Located in the far north of Limpopo in the Vhembe region, Musina-Makhado is strategically located near the border of Zimbabwe and on the Great North Road which links South Africa to the broader Southern African region.

The location of the Musina-Makhado SEZ, with links to Zimbabwe, Botswana and Mozambique, promotes the Trans-Limpopo Spatial Development Initiative. Logistics will be one of the key focus areas of the SEZ. Soon after the announcement of the designation of the SEZ, the National Department of Trade and Industry (the dti) said that a consortium of Chinese investors, Sino, has agreed to put R40-billion into the Musina-Makhado SEZ where they will operate the mineral beneficiation operations.

The initiative has already attracted investors in the form of the Eco-Industrial Solutions (EIS), the private sector investor behind the Limpopo Eco-Industrial Park (LEIP). LEIP aims to be an integrated industrial development comprising five major industrial components that sets new standards in sustainability. Set on 6 400 ha of land, the LEIP will include a nature reserve, two residential estates and schools. The Limpopo Economic Development Agency (LEDA) is working with EIS to establish a petrochemical cluster within the Musina-Makhado SEZ.

LEDA is the key driver of the provincial government’s drive to boost the economy through investment. LEDA is an agency of the Limpopo Department of Economic Development, Environment and Tourism (LEDET). LEDA’s brief is to contribute to accelerated industrialisation in Limpopo by stimulating and diversifying the industrial base of the regional economy.

The focus is on high-impact projects that will spark growth in a variety of sectors and create employment opportunities. Two key areas of focus relate to Special Economic Zones and Corridor Development and to land, property and infrastructure development (including business parks and industrial parks).

As these targeted areas grow, the infrastructure and associated industries will act as a magnet for other businesses and industries in the same sector, together with service industries. A Musina-Makhado Skills Development Plan has been approved by the provincial government.

A second application for an SEZ at Tubatse is pending. Tubatse is in the Sekhukhune District Municipality and hosts a number of mining operations. The SEZ in Tubatse will focus on the beneficiation of platinum group metals (PGM) and mining-related manufacturing. The province of Bashkortostan in Russia has also expressed an interest in the SEZs of Limpopo.

Phase one of the SEZ project would see a 280 ha site developed to accommodate a mining suppliers park, light manufacturing, heavy manufacturing, logistics, a solar energy cluster and a PGM beneficiation cluster.

Limpopo Development Plan

The SEZ and industrial parks being promoted in the province fall within a broader framework. The Limpopo Development Plan (LDP) targets three broad areas for improvement and development: socio-economic, infrastructural and institutional. Every department of the Limpopo Provincial Government has targets within the LDP which are translated into actionable programmes to be implemented within time-frames.

The plan is supported by strategies relating to a spatial investment framework in public and private sector infrastructure, an integrated public transport policy and policies on land development.

Key elements of the Limpopo Development Plan are: industrialization (beneficiation of mining and agricultural products and produce); mining (local suppliers, improved training and access to sector value chains for entrepreneurs); infrastructure development; agri-processing; SMME promotion and ICT and the knowledge economy (establish a WAN footprint).

Mining is currently the most important part of the provincial economy. Recent platinum mining developments on the eastern limb of the Bushveld Complex have increased this effect but global commodity prices have been uncertain in recent years. One of the goals of the LDP is to see more beneficiation from the mining sector, which will support the goal of further industrializing the province’s economy. Related to this is an emphasis on the manufacturing that needs to grow, and this is where the SEZs’ role becomes critical.

While the Limpopo Development Plan is aligned with the broader National Development Plan, there are also several national Strategic Infrastructure Projects (SIPs) which affect Limpopo.

Three in particular are expected to make a big impact, namely SIP 1 (Unlocking the Northern Mineral Belt with Waterberg as the Catalyst), SIP 6 (Integrated Municipal Infrastructure Project) and SIP 7 (Integrated Urban Space and Public Transport Programme).

Other national SIPs of relevance relate to green energy, agri-logistics and rural infrastructure, regional integration and water and sanitation infrastructure.

Article source: Special Feature in the 2019/20 edition of Limpopo Business, the guide to business and investment in Limpopo Province.

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