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

Mining in South Africa began with the discovery of a diamond along the banks of the Orange River – close to Hopetown in what is now the Northern Cape Province. This finding led to the discovery of the kimberlite pipe and the subsequent surge of large-scale diamond mining operations in the central part of the country. By the 1880s, the town of Kimberley was producing around 95% of the world’s diamond supply. Around the same time, prospectors discovered the existence of gold-bearing reef belts in Johannesburg, intensifying the surge of Western investors and migration of workforce from other parts of the country into these mining areas.

Over the years, more minerals and metals have been discovered across the country with diamond, gold, platinum, and coal dominating the commercial mining operations. The mining sector has in multiple ways, shaped the economic, political, and social landscape of the country. It has contributed immensely towards economic growth, skills, and infrastructure development. The sector has also enabled industrialisation, inducing the formation of secondary and tertiary industries thus creating forward and backward linkages. Backward linkages refer to the supply of goods and services into the mining sector, and forward linkages refer to the processing of the natural resources and their use to produce other finished goods.

Today, the mining sector remains a major contributor to South Africa’s economy.  In 2022, it contributed R494b to the country’s GDP.  This equates to a 7,53% contribution to the economy.  The sector also employs 475 561 individuals (source: Mineral Council South Africa, 2022 figures).

Future projections show that the South African mining sector still has the potential to contribute towards transformation of the country. This article investigates two areas that can serve as the next frontier of the South African mining industry.

The 4^th Industrial revolution (4IR)

The 4^th Industrial Revolution has become a buzzword in global development.  Simply put, 4IR alludes to the introduction of disruptive technologies and trends that change the way people live and work.

Within the context of mining (especially in South Africa), there has been some contestation in embracing technologies that introduce new ways of working.  This is based on the fear of job losses resultant from technologies that could reduce human capital requirements. 

To counter this effect, it has been suggested that the reskilling and upskilling of affected mine workers into other roles within the mining value chain will help mitigate the potential negative impact of rolling out new technologies, resulting in the long run, in the overall positive transformation of the sector.

In addition, 4IR opens a wide range of market offtake opportunities for minerals to be used in products that can aid the creation of new industries and product lines.  For example, 3D printing – a 4IR technology supports the use of minerals in new automotive designs as well as medical products, creating opportunities for enhanced output in these traditional industries. 

The Green Economy

With the recent pressure to reduce greenhouse gas emissions, countries, and industries all over the world have put in place measures to mitigate against carbon emissions. Key to the transition towards a greener society, is the deployment of green technology particularly in the energy arena.

South Africa holds a comparative advantage in this since it is the world’s leading primary producer of Platinum Group Metals (PGMs).  PGMs have a strategic role in creation of the hydrogen economy: they are used in the production of electrolysers needed to produce green hydrogen. Presently valued at over US$150b with a compound annual growth rate of 9,3%, the green hydrogen generation market is seen as the new frontier for alternative energy solutions; green hydrogen is also at the centre of a global drive to meet climate change targets set at COP Conferences. 

The dawning of a new era

It is evident that the mining sector still holds an important role in the industrialisation of South Africa as well as globally. The Country hosts some of the largest mineral reserves in the world, and thus provides further opportunity for growth.

This sector is at the centre of the OR Tambo Special Economic Zone’s Phase 1 development.  The SEZ supports the growth of beneficiated minerals from South Africa, with a focus on lightweight, high-margin, export-oriented products such as jewellery, diamonds, fuel cells and 3D products.

For more information on the investment opportunities available at the SEZ, visit: www.ortambosez.co.za

South Africa will be hosting the 15th BRICS summit, from the 21st to the 23rd of August 2023, under the theme “BRICS and Africa: Partnership for Mutually Accelerated Growth, Sustainability, and Multi-literalism”.

With a focus on increasing trade between the BRICS nations and rest of the world, a common notion is that Special Economic Zones (SEZs) are positioned to enhance value-added activities to further enhance trade. This article unpacks South Africa’s trade performance within BRICS and how SEZs could be utilised to advance linkages between local and international supply chains.

The evolution of BRICS

Initially conceptualised in 2001 by a Goldman Sachs economist as a grouping of the BRIC (Brazil, Russia, India, and China) alliance, the consortium was officially established in 2009. South Africa joined the alliance in 2011, adding further geographical diversity by being the first and currently the only African Country in the group. A common thread between these nations is that they are fast-growing economies with large populations, and they have vast natural resources at their disposal.

China and India are the most populous countries in the Group, with China also being the world’s second largest economy. Russia is the 11th largest economy globally and is concurrently, the second largest economy within BRICS. It is also the largest oil exporter in the Group.

Similarly, Brazil is the largest Latin-American economy and is a major exporter of raw materials and agricultural products. For its part, South Africa is the third largest economy in Africa and is endowed with a variety of minerals.

This diversity has been key to the growth of BRICS, making it a major global economic player over the years.

BRICS Economic Factsheet

The BRICS countries account for 41,5% of the world’s population and 29,3% of the world’s land mass. In 2020, BRICS contributed an estimated 26% of the global economy and accounted for 16% of the total trade.

South African Trade with BRICS

China and India are South Africa’s major trade partners owing to the diversity of the commodities and products between these nations as compared to Russia and Brazil.

FIGURE 1: SA’s trade with BRICS nations, source: SARS Statistics.

South Africa exports and imports 14% and 30% respectively with the BRICS alliance. The country’s export basket to BRICS is dominated by commodities and raw materials, whereas imports are mainly machinery, pharmaceutical products, and other manufactured goods. The table below gives details of South African exports and Imports to the other BRICS countries:

Country	Exports	Imports
China	Machinery (46%) Products of Iron & Steel (11%) Textiles (8%) Chemicals (8%) Plastic Products (5%)	Mineral products (70%) Products of Iron & Steel (14%) Precious metals (5%) Vegetables (2%) Textiles (2%)
India	Mineral Products (71.35%) Wood pulp & paper (10.47%) Products Iron & Steel (4.76 %) Chemicals (3.72%) Precious Metal (3.08 %)	Mineral Products (24.54%) Vehicles aircraft & vessels (22.11%) Chemicals (19.75 %) Machinery (11.57 %) Products Iron & Steel (4.14 %)
Brazil	Iron & Steel, Chemicals and Mineral products.	Live Animals, Equipment components and Products of Iron & Steel.
Russia	Vegetables and mineral product.	Products of Iron & Steel, Chemicals, Mineral products, and Vegetables.

BRICS Initiatives and Current Bilateral arrangements between South Africa and other BRICS Nations

The BRICS Economic Strategy (2025) defines a development path of BRICS and sets a framework for cooperation amongst its members.  In support of this cooperation, the Strategy has identified priority areas for partnership between the members; these include trade, investment and finance, the digital economy as well as sustainable development through the roll out of energy, infrastructure and human resource development.  In this regard, the BRICS Economic Strategy aims to promote and facilitate market access and linkages as well as trade and investment through a variety of channels such as the New Development Bank in respect of the financing of projects and the BRICS Business Council and BRICS Women’s Alliance in respect of market access linkages or engagements. 

In addition to the BRICS Economic Strategy, the following agreements are also applicable for South Africa’s benefit:

It is a mutual understanding between different spheres of economic development within South Africa and BRICS that the country should prioritize diversifying its manufacturing capabilities in various sectors such as automotive, pharmaceutical, and medical devices, agro-processing, aerospace, capital equipment and mineral beneficiation, to name a few.  

Within the South African context, Government has adopted the Special Economic Zone programme, which aims to offer world-class customised solutions and incentives to support the growth of South Africa’s manufacturing industry.  The use of the SEZ concept as a tool to promote industrial expansion and production is not new to the BRIC countries; in fact, it has been successfully employed in both China and India to promote industrialisation and economic development.  Seen as key drivers in advancing manufacturing through economic infrastructure development and access to special incentives, SEZs can potentially unlock intra-BRICS linkages between regional and international supply chains – given the diversity of the countries and the platform provided through the BRICS Group to enhance economic development and trade.

Investment Opportunities at the OR Tambo SEZ

The OR Tambo SEZ, located at the OR Tambo International Airport in Gauteng has positioned itself to respond to the common interest of BRICS in enhancing sustainable economic growth: by providing a platform that allows for manufacturing of various goods and their export to the BRIC nations.

The SEZ is a multi-site development, with two of the land parcels located near the airport, and the third land parcel located adjacent to a platinum refinery. Competitively located within reach of skills and workforce, logistics capabilities, access to natural resources as well as research and development institutions, investment opportunities in various sectors that utilise air freight as a mode of transport are available; these include mineral beneficiated products such as jewellery and polished diamonds; fuel cells and related components such as electrolysers, pharmaceutical and medical device products, electronics as well as fresh food products.

In addition to its competitive location, investors interested in the SEZ also have the support of government in setting up competitive manufacturing operations. This is done through the provision of competitive rental and lease arrangements as well as any other support that may be required for an investor to set up operations in South Africa. Working together with other arms of government, the OR Tambo SEZ can assist in the reduction of red tape an investor may face in setting up in a new market.

For more information on the SEZ and the investment opportunities available, visit: www.ortambosez.co.za

The OR Tambo International Airport SEZ is one of 11 SEZs presently gazetted in terms of the South African Special Economic Zone Act.

Approved as designated areas set aside for targeted economic activities, the purpose of the South African SEZ programme includes the attraction of foreign as well as domestic investment, the promotion and establishment of industrial activities in select sectors or industries, innovation uptake, enhanced regional development as well as the production and export of products from South Africa to global markets. It is in respect of the latter that South African SEZs can explore opportunities available through Preferential Trade Agreements (PTA) for the enhanced export of goods manufactured locally for the international market.

Once such PTA or programme is the African Growth and Opportunity Act (AGOA).

With the recent US – Africa Business Summit held in Botswana from 11-14 July 2023 at which private and public sector stakeholders from U.S and African countries engaged and provided insights on trade related issues, this paper unpacks the Africa Growth and Opportunity Act, its trade performance and applicability to the OR Tambo International Airport SEZ.

The African Growth and Opportunity Act

The African Growth and Opportunity Act (AGOA) was initially enacted in 2000, and has since been extended twice, with the latest extension coming to an end in 2025. The Act provides competitive market access to eligible sub-Saharan African countries: through the provision of duty-free trade of designated goods into the US market. County eligibility is determined by the country’s commitment towards upholding the rule of law, eliminating barriers to trade with the US and protection of human rights. On the other hand, eligible goods should either be fully extracted or sufficiently manufactured in an AGOA eligible country and imported directly to the US.

Beneficiaries of AGOA and it’s trade performance

Since the enactment of AGOA, 36 sub-Saharan countries have benefited from the programme (as of 2023, only 35 countries are eligible), with close to 6000 products making it into the eligible goods list. In 2022, total AGOA exports amounted to a value of $30 billion. Presently, the top exporting countries under AGOA are South Africa, Nigeria, Ghana, Cote d’Ivoire, and Angola.

South African Trade relations with the U.S

South African has strong trade with the US, owing to its established capabilities to locally manufacture value-added products, when compared with other sub-Saharan countries. Between 2016-2021, South Africa exported R651.3 billion worth of goods and services to the United States, with exports under AGOA (including the General System of Preference or GSP) accounting for nearly 25%.

A closer look at the statistics however reveals that whilst overall trade between South Africa and the USA increased between 2010 and 2022, exports under AGOA declined slightly between the 2010- 2022 decade with a more noticeable decline under the GSP regime during the same time frame. These decreases, specifically notable between 2020 and 2022 were mainly due to the constraints in trade and manufacturing caused by the COVID-19 pandemic, which had a dire impact on the global supply chain.

Top Products Exported to the USA

The minerals and metals sector is the top exporter by value into the U.S market; however only 7% (mainly jewellery) is exported under AGOA (figure 3). The Automotive, Agricultural and Chemical industries also contribute a significant percentage in terms of total AGOA exports. The strong trade in the precious metals market mainly lies in SA’s endowment in mineral resource.

Gauteng’s Trade with the US Market

Specific to Gauteng city region, the province represents approximately 30% of goods and services into the U.S, making it the largest trading province with the US and, South Africa’s largest recipient beneficiary to AGOA. Below is a tabular representation of the overall top products originating from Gauteng for trade to the US:

Unpacking SA’s SEZ policy and potential benefits from AGOA

To respond to the opportunity of enhancing export-led growth, South Africa has enacted the Special Economic Zone Act which simply put, allows for manufacturers within geographically demarcated zones or areas to access special tax incentives as provided by the Act.

The mushrooming of SEZs across South Africa and the rest of the sub-Saharan Africa region provides a platform for eligible countries to maximise the benefits of preferential trade programs such as AGOA: by attracting investment to boast manufacturing activities for export to huge consumer markets.

The above notwithstanding, it should be noted that whilst PTAs such as AGOA allow for developing markets to export to advanced economies such as the US, there is a need to ensure that the incentives offered do not promote trade at the cost of policy autonomy by the offering country or for that matter, an un-even regional heterogeneity outcome that can impact the broader development of the African continent.

The OR Tambo International Airport SEZ Offering

The OR Tambo International Airport SEZ provides a competitive edge in the form of its geographical location, in lieu of its placement at the largest and busiest airport in sub-Saharan Africa. In considering AGOA and the benefits of enhancing products manufactured in South Africa for the US market, this SEZ is well placed to drive exports to the world’s foremost consumer market.

Presently, there are one or two passenger flights flying out of OR Tambo International directly to the US daily. Furthermore, connection flights exist through other destinations such as the UAE or even the EU, further enhancing air freight export from the OR Tambo International airfreight hub and SEZ to the largest economy globally.

A statistical analysis reveals that major products exported to the USA through OR Tambo include Rhodium, Palladium, Platinum and other precious metal ores and concentrates.

With a focus on high value, low mass products that utilise air freight as a mode of transport, OR Tambo SEZ is well positioned to facilitate the production and export of products that form part of the AGOA regime (e.g., jewellery, agriculture products or automotive components).

Specific to jewellery, a bold development already underway at the OR Tambo SEZ is construction of a globally competitive Jewellery Manufacturing Park. This development clusters and plays host to a variety of players in the jewellery and precious metal fabrication industry, with a view of firstly, enhancing the operational competitiveness of investors in the Zone and secondly facilitating their access to key incentives that reduce production costs. These incentives include the standard SEZ incentives such as VAT relief, import duty customs relief and the Employment Tax Incentive.

Through all the above, it is envisioned that products beneficiated at the Zone with an export focus will increase. With the completion of its Phase 1 development, plans are already underway to expand the SEZ with a view of accommodating more investments in the manufacturing of, inter alia, capital equipment, pharmaceuticals, medical devices, and automotive components for the global market.

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

Email: info@gidz.co.za