Manufacturing in South Africa has been seen as a key driver for economic growth and job creation. As one of the country’s most significant sectors, manufacturing contributes substantially to the national economy, with the sector accounting for around 13.1% of South Africa’s GDP in recent years (Worldbank). This sector also provides jobs for millions of South Africans—approximately 1.7 million people were employed in manufacturing as of 2022, according to Stats SA.

Despite these contributions, South Africa’s manufacturing industry is facing growing pressures to modernize and adopt more sustainable practices, especially with increasing global demand for environmentally responsible production.

Green manufacturing focuses on reducing waste, conserving energy, and using sustainable materials, offering an opportunity for South Africa to modernize its manufacturing sector while contributing to global sustainability goals. However, the question remains: Is South Africa ready to fully embrace green manufacturing practices, especially in view of the following considerations:

Barriers to Embracing Green Manufacturing in South Africa

While there is growing momentum for green manufacturing globally, a study by Du ploy et.al (2022) has identified various barriers that hinder widespread adoption of such practises within the South African context. These challenges must be addressed for South Africa to transition to a more sustainable industrial future.

1. Financial Constraints and High Initial Costs

One of the biggest barriers to embracing green manufacturing in South Africa is the high initial cost of sustainable technologies. Green manufacturing often requires significant capital investment in energy-efficient machinery, renewable energy systems, and waste management solutions. For many manufacturers, especially small and medium-sized enterprises , these upfront costs are a challenge to acquire.

Even though green technologies can lead to long-term cost savings through energy reductions and waste minimization, the lack of affordable financing options makes it difficult for many businesses.

2. Technological Uncertainty and Limited Access to Expertise

Another significant challenge is technological uncertainty. Green manufacturing requires the integration of advanced technologies that may be unfamiliar to South African manufacturers. Many companies are reluctant to invest in sustainable technologies due to concerns about the uncertainty surrounding their long-term effectiveness and return on investment. For instance, while renewable energy systems like solar power can reduce operational costs, they come with high installation costs and risks related to maintenance, making manufacturers hesitant to adopt them.

Additionally, there is a skills gap in South Africa, where many manufacturers lack the technical expertise to implement and maintain green technologies. The shortage of trained professionals in areas like energy efficiency, waste management, and environmental impact assessments presents a significant barrier to the adoption of green practices across the industrial sector.

3. Regulatory and Policy Uncertainty

The regulatory environment plays a critical role in encouraging or discouraging green manufacturing. South Africa’s policy landscape around sustainability has evolved, but policy inconsistency and uncertainty remain significant barriers. For companies to invest in green technologies, they need clear and stable policies that provide long-term incentives and support. Uncertainty in government regulations—such as changes to tax incentives or the unpredictability of carbon pricing—may prevent businesses from fully committing to sustainable practices.

4. Supply Chain Limitations

Green manufacturing is not just about what happens inside a factory but also what happens in the supply chain. In South Africa, supply chain challenges make it difficult for companies to implement sustainable practices. For example, many suppliers may not have the capacity to provide eco-friendly raw materials or may not be aligned with sustainability goals. This is particularly true in sectors like mining, where the environmental impact is often significant.

Is South Africa Ready for Green Manufacturing?

Despite these significant barriers, South Africa is gradually moving towards embracing green manufacturing practices. The country has set ambitious goals for sustainable development, as outlined in the National Development Plan (NDP) and its commitment to the Paris Climate Agreement. In the private sector, large multinational companies (MNCs), particularly those in consumer goods and automotive sectors, have already started to implement green supply chain practices and energy-efficient technologies.

Moreover, South Africa’s renewable energy sector is growing, with increasing investments in solar and wind energy, which are expected to play a key role in greening the manufacturing industry.

Conclusion

South Africa is not yet fully ready to embrace green manufacturing practices on a large scale, but the potential is there particularly within the SEZ programme.

The OR Tambo SEZ is making notable strides in supporting green manufacturing practices, particularly with it’s expansion phase. The development of Precinct 2 and the Springs Precinct is designed with sustainability in mind, with both precincts exploring alternative energy solutions, sustainable waste management, and efficient water usage systems. These initiatives align with South Africa’s broader goals for green industrialization and sustainable economic growth.

Moreover, the SEZ incentives offered to companies located in these zones provide a unique advantage by significantly reducing operational costs. These incentives enable businesses to reinvest their savings into areas like green technologies. As a result, companies operating within the OR Tambo SEZ are better positioned to allocate resources towards adopting sustainable production lines, energy-efficient equipment, and other environmentally friendly technologies. This creates a powerful lever for promoting sustainable industrial growth while maintaining economic competitiveness, making the SEZ a key enabler for the adoption of green manufacturing practices in South Africa.

For more information on the OR Tambo SEZ please visit www.ortambosez.co.za.

References

1. Stats SA. (2022). Manufacturing Industry Data. Statistics South Africa.
2. Du Plooy, Suné, Neethling, Kobus, Nel, Andries, & Nel, Jacobus Daniel. (2022). Drivers of and barriers to green manufacturing in South Africa. Journal of Contemporary Management , 19(1), 1-39. https://dx.doi.org/10.35683/jcm20141.147
3. The World Bank. (2022). South Africa GDP: Manufacturing. World Bank Group.
4. South African Institute of Chartered Accountants (SAICA). (2021). The Skills Gap in Manufacturing. SAICA Research.
5. The Manufacturing Circle. (2021). Annual Report on Manufacturing in South Africa.
6. Department of Mineral Resources and Energy (DMRE). (2022). Green Mining Initiative Report. DMRE, South Africa.

In September 2024, President Cyril Ramaphosa, led a State Visit to China. The visit was aimed at strengthening the long-standing partnership between South Africa and China and coincided with the Forum on China-Africa Cooperation (FOCAC) 2024 Summit.

Established in 2000 and consisting of 53 African countries, FOCAC is a key platform for fostering collaboration and cooperation between African countries and China in areas such as trade, investment, infrastructure, and development. It also extends to address global issues such as the reform of international governance, peace, and security, all of which is done through a consultative process that aims to promote cooperation between China and Africa.

Specific to 2024, the FOCAC Summit resulted in the signing of several bilateral agreements covering areas such as industrialization, trade, technology, and agricultural modernization.

Manufacturing and Industrialization

One of the core themes of FOCAC 2024 was industrialization, a key priority for African nations as they seek to transform their economies from resource-dependent to value-added industries. Through FOCAC, China has been a crucial partner in supporting Africa’s industrialization agenda, providing investment, technology, and infrastructure to facilitate the growth of sectors such as manufacturing, energy, and agriculture.

China’s investments in Africa’s industrial sector align with the goals of the African Union’s Agenda 2063, which emphasizes inclusive economic growth and industrial transformation as drivers of development.

In the last two decades, China’s FDI into Africa has increased, peaking at $5b in 2022. This amount, which represents about 4.4% of the Continent’s FDI has mainly been focused on manufacturing – a key driver to Africa’s industrialization agenda (Institute for Global Dialogue,2023)

South Africa has benefitted from this FDI, with the country being a major recipient of Chinese investment. It is, however, understood that this FDI has mainly been in the primary sectors of natural resources.  FOCAC 2024 highlighted the importance of changing this with more finished goods being exported to China.

Balancing South Africa-China’s Trade

Whilst trade between China and Africa has grown significantly (increasing from $11.67 billion in 2000 to $257.67 billion by 2022), it is understood and agreed that the imbalance in trade must be addressed.

Specific to South Africa, during 2022, the country exported $23.4 billion worth of products to China, while China’s exports to South Africa amounted to $23.5 billion. The primary exports from South Africa to China were natural resources, including gold, which accounted for $8.85 billion, followed by diamonds at $3.36 billion and platinum at $1.83 billion. In contrast, China’s exports to South Africa were predominantly manufactured goods, featuring broadcasting equipment valued at $1.78 billion, computers at $1.04 billion, and electric batteries at $777 million (South African Revenue Service, 2023).

According to a joint statement released by the governments of South Africa and China during FOCAC 2024, the two countries agreed to elevate their partnership into a comprehensive strategic cooperative relationship focused on balancing trade, a key input into industrialization, technological innovation, and sustainable growth. In respect of the latter, South Africa’s investment opportunities in the renewable energy, green hydrogen as well as energy storage, all of which have been identified as sunrise sectors with the potential to massively contribute to South Africa’s GDP and job creation capabilities were highlighted as areas of investment by the South African government.

This is because of China’s proven track record in these areas; presently China is the largest producer and consumer of hydrogen.  It is also at the forefront of electric vehicles and battery production with its electric vehicles already making headway in Europe. This fast-evolving sector provides an opportunity not just for South Africa, but the Continent as a whole, given the natural endowments found in Africa and their essential input into the production of fuel cell and electric vehicles as well as green hydrogen. In order for this opportunity to be realized and more importantly, for the opportunity to translate into the growth prospects envisaged for the Continent and the country, a market such as China is key in supporting South Africa’s ambition to realize its green technology capabilities. Without a doubt, forums such as the FOCAC are of benefit to South Africa in accessing the Chinese market, not just from an investment perspective but from a consumption market as well.

Re-drawing and Leveling the Playing Field: -2025-2027 FOCAC Plan

The 2024 FOCAC Plan was shortened from six years to three years. This is in support of the desire to accelerate modernization and industrialization in Africa as well as the objective to reduce the trade imbalance between China and the Continent.

To also ensure effective implementation of the desired co-operation between China and Africa, 10 key measures or areas of co-operation have been defined. All of the areas are beneficial and can if implemented effectively, contribute to the Continent’s sustainable growth.

Amongst others, the 2025-2027 FOCAC Plan aims to create research centers across Africa to enhance training of African Leaders. The Plan has also set its goals on eliminating tariffs for products from least developed countries, helping African countries to expand their agricultural exports and digital trade platforms. The establishment of industrial parks across 5 regions in Africa is also a target, as is infrastructure development, health care improvement, rural revitalization, security, and green development. To support all of this, China has pledged some $49b in financial support to be accessed in different ways, including credit lines or development assistance.

Positioning South Africa to benefit from FOCAC

During the State Visit undertaken alongside the 2024 FOCAC Summit, President Cyril Ramaphosa called for a narrowing of the trade deficit with China. For South Africa to enhance its trade arrangements with China as well as its access to set-aside FDI, it is argued that the country’s SEZ programme be integrated into priority trade and development areas identified for the country.

Leveraging the SEZ programme will ensure that a comparative advantage for FDI coming through from China can access the SEZ incentive framework, leading to increased investment.

The OR Tambo International Airport SEZ is well positioned to play a central role in this, in lieu of its competitive location next to Africa’s largest and busiest Airport and its development trajectory wherein it has already identified and packaged for investment uptake, opportunities in sectors such as the pharmaceutical and medical sectors as well as the green economy.

The SEZ also has infrastructure development opportunities that support regional development where the SEZ is located, ensuring modernization of the OR Tambo International Airport Economic Node and its continued position as a world-class business location with accessibility and connectivity to different parts of the world.

For more information on the OR Tambo SEZ and its investment opportunities, visit our website: www.ortambosez.co.za

REFERENCES

1. Government of South Africa. (2024). Joint Statement on the State Visit of President Cyril Ramaphosa to China.
2. South African Revenue Service. (2023). Trade Statistics Report: South Africa and China.
3. Forum on China-Africa Cooperation (FOCAC). (2024). Summary of FOCAC 2024 Outcomes.
4. Wang, Y. (2023). “China-Africa Trade Relations: Current Trends and Future Prospects.” Journal of International Trade, 12(3), 45-67.
5. Institute for Global Dialogue. (2023). “Economic Ties Between South Africa and China: A Comprehensive Analysis.”

As we celebrate Women’s Month, it is vital to acknowledge the significant role women play in trade and investment across South Africa and Africa at large. Women are at the heart of Africa’s economic engine, making substantial contributions to both the informal and formal sectors. Empowering women in these areas is not only a matter of fairness but also crucial for economic growth and development.

The Economic Power of South African Women

Women make up over 51% of South Africa’s population, and their economic activities are a cornerstone of the country’s development. South Africa leads the continent in female entrepreneurship, with women comprising a significant portion of entrepreneurs. Women also drive a substantial share of Informal Cross-Border Trade and play a key role in many Small and Medium Enterprises (SMEs) in the country. Their entrepreneurial activities not only provide livelihoods for their families but also stimulate broader economic development.

According to a PIC Study, women-owned businesses make up 21.9% of total businesses, slightly below the global average of 22.5% but demonstrating significant potential. Despite their contributions, women-owned businesses in South Africa face significant challenges, especially in accessing finance, resulting in a considerable credit gap.

The AfCFTA Protocol on Women and Youth in Trade

The Africa Continental Free Trade Area (AfCFTA) Protocol on Women and Youth in Trade is a pivotal step toward enhancing the participation of women and youth in trade. It aims to ensure their economic empowerment and inclusion in Africa’s economic landscape. The protocol outlines several key initiatives:

1. Increased Participation: Removing barriers to enable women and youth to engage more fully in trade.
2. Capacity Building: Providing training, business education, and digital literacy programs.
3. Access to Finance: Facilitating better access to financial products and services tailored to women entrepreneurs.
4. Policy & Legal Reforms: Creating inclusive policies and eliminating discriminatory practices.
5. Support for SMEs: Enhancing resources and support structures for women- and youth-owned SMEs.
6. Promotion of Gender Equality: Ensuring equal opportunities and combating discrimination.
7. Regional & International Collaboration: Building partnerships to share best practices and resources.

To this end, these initiatives are essential for transforming the trade environment for women, enabling them to not only participate but thrive in the competitive market landscape.

The Role of OR Tambo SEZ in Empowering Women in Business

The OR Tambo Special Economic Zone (OR Tambo SEZ) is a critical initiative in South Africa, designed to foster industrial and economic growth, with a focus on manufacturing and logistics. This SEZ plays a pivotal role in supporting women entrepreneurs by providing a platform for trade, investment, and industrialization. Through the OR Tambo SEZ, women-owned businesses can access essential infrastructure, secure incentives, and connect with local and international markets. The SEZ’s initiatives are aligned with the goals of the AfCFTA Protocol on Women and Youth in Trade, aiming to break down barriers and ensure that women have the resources and opportunities to succeed.

Case Study: Isabella Jewellers & Refiners

Isabella Jewellers & Refiners is a prime example of women-led success in the trade and investment sector. As South Africa’s leading precious metals refinery and jewellery manufacturer, Isabella is based in Gauteng and supports other jewellery manufacturers by supplying  gold, platinum, silver, and gold alloys, as well as jewellery according to their specifications. Isabella is a Level 1 BEE contributor and a 100% Black Women-Owned Enterprise.

Through their innovative approach and dedication to high-quality service, Isabella exemplifies how women-led businesses can drive economic development while promoting sustainable practices. Their success story underscores the potential for women entrepreneurs to make a significant impact when provided with the right tools and opportunities.

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Women’s Month serves as a reminder of the critical role women play in economic development and the importance of supporting their participation in trade and investment. Women entrepreneurs not only drive economic growth but also contribute to social development by reinvesting in their families and communities. By addressing the barriers women face and creating supportive environments, we can unlock the full potential of women’s entrepreneurship, leading to a more prosperous and equitable future for all.

As we look to the future, let us commit to empowering women in trade and investment, ensuring that they are not only participants but leaders in shaping South Africa’s and Africa’s economic destiny. Together, we can build a continent that thrives on the talents and contributions of all its people.

For more information on the OR Tambo SEZ and its efforts to enhance women empowerment and broader trade and investment, visit: www.ortambosez.co.za

As we honour Nelson Mandela’s legacy this July, it’s important to reflect on the principles that defined his vision for South Africa – economic inclusivity and socio-economic development. The OR Tambo Special Economic Zone (SEZ) is actively pursuing these ideals through its development approach.

Economic Inclusivity: Empowering Emerging Enterprises

Nelson Mandela believed in creating a society where everyone, regardless of their background, race and gender have equal opportunities. By promoting policies that ensure equal access to education, healthcare, and economic resources, Mandela’s principles were aimed at bridging economic divides and inequality and ultimately, creating a more inclusive economy where everyone has the chance to succeed.

This principle of economic inclusivity forms part of the OR Tambo SEZ’s enterprise development approach through which economic opportunities for emerging enterprises are facilitated by purposeful market access arrangements. 

An example of this is the goldsmith Jewellery Excellence Masterclass (“JEM”) program being implemented in collaboration with an investor at the SEZ.  Through this world-class quality and skills enhancement initiative, jewellery manufactured by emerging enterprises forming part of the programme is provided with an off-take in international markets, further contributing to the nurturing of local talent into global players.

The program, now in its second cohort since 2023, has already produced success stories like Isabel Bothma, a winner of the 2024 Woolworths Youth Makers Competition. Isabel, who started her business in 2019, gained valuable expertise in designing and marketing contemporary jewellery through the JEM program. Success stories such as Isabel’s are at the centre of the OR Tambo SEZ’s economic inclusivity efforts, through which it works with key stakeholders and market players to facilitate market access for young and upcoming businesses who historically may not have had a chance to participate in some of these industries.

Socio-Economic Development: Creating Opportunities for All

In the spirit of Mandela’s vision, it is argued that Special Economic Zones (SEZs) in South Africa have a role to play in advancing socio-economic growth and inclusivity: by providing a platform that communities can access for jobs and economic opportunities.  The OR Tambo SEZ has made a concerted effort to ensure that its build program focuses on local hiring and sub-contracting, allowing the benefits of development to reach the marginalized residents of Ekurhuleni.

Whilst there is a particular focus on the build programme, the OR Tambo SEZ’s socio-economic efforts are multi-faceted; they not only seek to create temporary jobs or economic opportunities during construction, they also seek to provide a platform for skills enhancement  within the local community, thereby promoting social equity.

By undertaking its development with some of these principles underpinned to its development approach, the OR Tambo SEZ aims to respond to legacy issues that continue to constrain South Africa whilst concurrently, promoting economic growth, social justice and empowerment. As a team, we believe that these are efforts that Madiba would support!

For more information on the OR Tambo SEZ, visit: www.ortambosez.co.za

Thought Piece: OR TAMBO SEZ: Supporting Youth Empowerment

In the quest for a sustainable future, our journey is intertwined with the pursuit of critical minerals. Picture yourself in a world where clean energy powers our homes, where electric vehicles silently navigate down the streets, and where renewable technologies flourish. This is not a mere dream, but a tangible reality that some countries are beginning to recognise, and where others intend to be. The relevance of critical minerals in the green and sustainable economy cannot be overstated. They serve as the building blocks of renewable technologies, acting as catalysts for innovation and sustainability.

The composition of this essential list varies from nation to nation, mirroring their unique priorities, strategies, and needs. In South Africa, the Department of Minerals and Energy (DMRE) emerges as a focal point for listing these critical minerals. However, the compilation of such a list in South Africa remains a work in progress.  The table gives a general summary of these minerals and the role they play in the green economy.

Source:  The Minerals Council of South Africa

The omission of the global share of reserves for some minerals listed on the table above is not intentional, but rather indicative of the lack of verified statistics and information due to limited exploration of those minerals. Highlighting a concerning statistic, the Minerals Council underscores that South Africa’s share of global exploration activity for critical minerals stands below 1%. This emphasizes the urgent need for increased investment and focus on exploration efforts. By encouraging exploration activities, South Africa can secure access to critical mineral resources and catalyse downstream industries such as manufacturing.

Leveraging these resources domestically can drive local value addition and significantly contribute to the country’s economic growth and competitiveness in the global market. In a country characterized by a high unemployment rate, recognising the value chain perspective is crucial, particularly in understanding the economic opportunities presented at each stage, from exploration through to processing and manufacturing.

This aligns well with South Africa’s Mineral Beneficiation strategy, which aims to enhance value addition in downstream industries. By embracing this strategy, South Africa not only mitigates the risk of merely exporting raw materials but also positions itself to participate actively in processing and manufacturing green technologies and solutions.

Similarly, local adoption of these technologies is vital for advancing the country’s efforts to meet its carbon emission targets. This also cultivates a domestic market for embracing such technologies, thereby spurring investment in localising supply chains. South Africa has developed several roadmaps, including the PGM roadmap, the new vehicle roadmap, and the Green Hydrogen roadmap, all of which contribute to the growth of the green economy and outline various steps, strategies and instruments aimed at realising the green economy.

The OR Tambo Special Economic Zone (SEZ) fosters an environment conducive to industries aiming to produce goods meeting international standards. From both incentivization and infrastructure standpoints, the OR Tambo SEZ notably supports the manufacturing of green technologies, encompassing a spectrum from electronics in the renewable space to fuel cells and electrolysers, alongside other components crucial to the green economy.

Moreover, the OR Tambo Special Economic Zone (SEZ) stands out for its strategic advantage in addressing the critical skills gap within the industry. Situated in close proximity to leading academic institutions renowned for their expertise in training students specifically for these sectors, the SEZ offers access to a skilled workforce. Additionally, its access to research institutions actively involved in driving advancements in green technology manufacturing ensures a dynamic ecosystem conducive to fostering innovation and expertise. This strategic positioning underscores the SEZ’s commitment to facilitating the growth and success of industries producing goods of international standards.

While the journey may appear extended, it remains within reach, guided by the concerted efforts of diverse stakeholders committed to a greener and sustainable future. For more information on opportunities available in the green economy sector visit www.gidz.co.za.

As an economic development tool, the South African Special Economic Zone programme can play a fundamental role in the Country’s economic future, given its desired focus to drive and grow manufacturing-led industrialization. The benefits of manufacturing notwithstanding, global concerns on the environmental effects of traditional manufacturing practices are growing; in tandem with emerging business practices that seek to support sustainable and low-carbon manufacturing solutions.

One of the ideas being employed in pursuit of more efficient and sustainable production practices is the Circular Economy (“CE”), a concept that, although relatively new, is gaining a lot of attention from the academic community as well as the public and private sector.

Globally, CE is acknowledged as one of the approaches that will help the United Nations Sustainable Development Goals (SDG) be achieved, with numerous governments promoting the adoption of CE policies and principles in order to fulfil their SDG commitments. 

Underpinned by the concepts of reduce, reuse, and recycle, CE aims to reduce waste and pollution by optimizing the resources in a manufacturing process. 

Specific to the OR Tambo International Airport SEZ, the CE approach is at the center of its industrial development approach.  The OR Tambo SEZ does this by pursuing a cluster approach to its manufacturing activities.  Through this, manufacturing value chains that take into account a specific industry’s inputs, materials, processes, and products are located at the Zone, based on three CE principles or considerations:

• Their input into the industry’s manufacturing cluster, with a view of reducing, eliminating or even minimizing the movement of inputs from one location to another; resulting in a neutral impact to the environment.
• Where feasible, the re-utilization of inputs forming part of the production process by other participants in an industry’s value chain operating from the Zone.
• The recycling of common inputs central to any production process e.g., water, waste or even energy.

Whilst there are numerous CE solutions that can be applied in the development of an industrial park or SEZ, the OR Tambo SEZ’s focus is primarily on the above. To this end, its objective is on ensuring that as far as possible, sustainable development and operational practices are pursued and entrenched in the SEZ.

Despite this bold objective, it is impossible to deny that more work must be done to develop an innovative and efficient system that will support a viable CE model at the OR Tambo SEZ. Due to scarcity factors (such as land) necessary to facilitate on-site water treatment, waste management or even a full on off-grid energy solution, the OR Tambo SEZ is presently exploring creative ways through which it can further address CE issues at its Phase 1 operational precinct. 

It is also engaging with market players on the next phases of development; with a view of ensuring that ORTIA Precinct 2 (a 29ha land parcel located next to Precinct 1 and in proximity to OR Tambo International Airport) and the Springs Precinct (a 13ha land parcel located next to a major platinum refinery) are designed as sustainable manufacturing eco-parks. 

For more information visit www.ortambosez.co.za

Africa is a resource-rich continent with substantial untapped opportunities. This is because the Continent has historically been regarded as a primary resource economy that derives its economic status from agricultural and mining activities, minimizing its GDP capabilities.

To drive industrialisation, growth and job creation, African countries have recognized the importance of increasing value-added activities, while also promoting intra-African trade in high-value products such as medicines.

This article briefly explores Africa’s potential in the pharmaceutical and medical products market. The African Pharmaceutical and Medical Products Market.

The African Pharmaceutical and Medical Products Market

Africa is the world’s second most populated Continent, accounting for just under 18% of the global population. In spite of this, the Continent is accountable for at least 25% of the world’s disease burden.

With more than its fair share of communicable and non-communicable diseases, the World Economic Forum estimates that the total demand for pharmaceuticals in Africa is around $18 billion per year. 61% of that demand is serviced through imported products (mainly from China and India).

Concurrently, only about 36% of the demand is serviced from products manufactured within the borders of the individual African countries, leaving only 3% being allocated for intra-Africa trade.

Africa’s manufacturing capabilities

Around 40% of Africa’s medical manufacturing capabilities are confined to packaging and labelling, with the remaining 40% limited to filling and finishing (Who Owns Whom, 2023).

In recognition of this and the demand available for various health products on the Continent, there is a drive to ramp up Africa’s production capabilities as well as strengthen value chains in the supply of medical products.

Africa’s Medical Production Ambitions

More recently, African countries have recognized the need to diversify their value chains in order to grow their economies and create job opportunities.

This realization was compounded at the outbreak of the COVID-19 pandemic when the Continent had to rely heavily on international supply chains for a variety of critical supplies.

This constraint prompted the African region to take steps to improve its medical manufacturing capabilities, with the African Union setting a goal for at least 60% of vaccines used on the continent to be manufactured in Africa by 2040 (this against a backdrop of just 1% of the total vaccine demand in Africa presently being produced on the Continent).

It is envisaged that this target will be supported by the single market resultant from the African Continent Free Trade Area Agreement (AfCFTA), same that with a population of 1,4b provides a market for the production and trade of medical products such as vaccines.

Furthermore, the AfCFTA is an effective tool to drive value-add activities: by providing economies of scale for local manufacturing, enhancing collaboration, lowering costs, and increasing competitiveness.

OR Tambo SEZ: An ideal location for pharmaceutical and medical products manufacturing

Underpinned by factors such as a skilled labour force, established infrastructure and a world-class banking and financial services sector, South Africa has long been a location of choice for Multinationals looking to locate in Africa. The country also has an established supply chain, and supportive infrastructural capabilities to foster medical manufacturing expansion.

For instance, research by the African Society for Laboratory Medicine found that while Africa has less than 500 internationally accredited laboratories, 90% of these are based in South Africa.

As part of its industrial focus, the OR Tambo International Airport Special Economic Zone has identified the pharma and medical products sector as one that is suited for location at its Zone.

This is because the Zone’s cold storage infrastructure and distribution capabilities – located next to sub-Saharan Africa’s busiest and major airport provide a reliable mechanism to maintain the integrity of the medical products from the production base to air freight for export.

In addition, the size of the OR Tambo SEZ Precinct 2 development makes provision for a medical cluster, further enhancing production efficiencies and reducing the cost of production. Equally important, the Zone is located in proximity to institutions of higher learning as well as research institutions, providing a basis for ongoing quality improvement and new product development.

All the above, coupled with South Africa’s locational considerations as well as the province of Gauteng’s competitive positioning serving as a gateway to sub-Saharan Africa make the OR Tambo SEZ an ideal location for the production, export, and trade of pharmaceutical and medical products.

For more information on the pharmaceutical and medical cluster being developed at OR Tambo International Airport SEZ, visit: www.ortambosez.co.za

Transport connectivity and its role in economic development 

The month of October has been declared as Transport Month in South Africa. A key input into economic activity, transport has a direct interface to any country’s GDP. This is because it is essential to the movement of goods and people, thus playing a central role in economic productivity. 

Specific to the OR Tambo International Airport SEZ, transport and logistics are at the centre of the SEZ’s offering. Located at the doorstep of sub-Saharan Africa’s largest and busiest airport, the value proposition of the OR Tambo International Airport SEZ is centred around the transport and logistical capabilities of OR Tambo International. The SEZ is also supported by the extensive land transport network available on the eastern corridor of the Gauteng City region. This makes it the ideal location for the production and export of goods from South Africa to regional and global markets. 

Transport and its key role in the success of an SEZ 

Whilst it is understood that any SEZ must be designed to encourage manufacturing output, an SEZ’s access to transport and logistics is central to its success. This is because a well-functioning transport system reduces the cost of moving goods and people around, thus increasing productivity, economic linkages, output and performance. 

The below unpacks the transport offering of the OR Tambo International Airport SEZ, same that is a key input in the SEZ’s offering. 

Unpacking OR Tambo International Airport SEZ’s transport Offering. 

Quality Infrastructure 

A good transport system must consider the quality and reliability of the infrastructure to enable the movement of goods and services. Located at and in proximity to OR Tambo International Airport, the transport offering of OR Tambo SEZ is mainly centred around OR Tambo International. 

With all the features of a global air hub (with long runways, terminals, baggage handling, lounges, food service areas and more) and measuring over 80 000m², OR Tambo International has two terminals and two runways that can service the movement of 220 000 aircrafts. The Airport also has the capacity to handle up to 28 million passengers annually. 

The quality of the Airport’s infrastructure has resulted in it being ranked among the top Airports globally. 

Extensive Connectivity Network 

OR Tambo International has an extensive route network that services 5 continents with over 42 international, regional and domestic airlines flying in and out of the Airport. Additional connections are being pursued as part of Gauteng Air Access, an initiative that aims to prioritise direct links to all major economic destinations, thereby reducing travel time and giving businesses access to a wider marketplace. 

THE CONNECTIVITY BENEFITS OF LOCATING AT OR TAMBO INTERNATIONAL AIRPORT SEZ

Operational efficiency and service standards 

Operational efficiency is central to an Airport’s service offering. In terms of the International Air Transport Association’s (IATA) Level of Service concept, the industry benchmark for optimum passenger terminal facilities includes check-in time, security, passport control, boarding gates and baggage handling, amongst others. The Airport Council International’s (ACI) Guide to Airport Performance Measures also considers six categories, namely: safety and security, service quality, cost-effectiveness, environmental factors, financial considerations and the core aspects of passengers, aircraft movements, air freight and non-stop connections. 

In order to measure an Airport’s operational efficiency and service, an Airport operator can procure an independent assessment of its service and operations. By far one of the largest globally, Skytrax is a leading assessor of airline and airport service quality that on an annual basis, assesses customer services and facilities in over 500 airports as part of its World Airport Awards. 

At the 2023 Skytrax World Airport Award ceremony, OR Tambo International was ranked the 3rd best Airport in Africa, after Cape Town International and King Shaka International Airport. The Airport has also been ranked as a 3 star, meaning it is achieving a fair quality performance in facilities, performance, and service standards. 

Cargo capabilities 

Another measurement of an airport is its air cargo capabilities. This is because air cargo has grown at a faster rate than passenger demand (IATA, 2013). In this space, OR Tambo International remains the largest air cargo hub in South Africa, accounting for 87.9% of all inbound air cargo traffic and 76.4% of all outbound air cargo (ACSA, 2022). This equates to 400,000 tonnes of cargo processed at OR Tambo International annually. 

To support the growing air cargo demand, plans are already underway to expand OR Tambo International’s air cargo offering. 

The Offering to Investors 

Investors generally require different types of transport services, based on the urgency of their goods, and the suitability of transport to handle those goods. 

In response to its competitive location and the service capabilities of OR Tambo International, the OR Tambo International Airport SEZ is the best location for companies that manufacture high-value, low-mass products that move via air freight. 

For more information, visit: www.ortambosez.co.za