1998 SOUTHERN AFRICA ECONOMIC ... - National Treasury

S O U TH A F R I C A
cities of Johannesburg and Pretoria - 80 percent of fo re i g n
affiliates are located in Gauteng.
Spatial Development Initiative s
The Spatial Development Initiative (SDI) programme aims to
encourage private sector invo l vement in the provision of
i n f r a s t r u c t u re in areas where there is a large amount of
u nutilised potential.The programme aims to create corridors of
d evelopment along various transport ro u t e s . D i f fe rent SDIs
h ave varying sectoral focuses - for example, the Kwazulu-Natal
SDI focuses primarily on industry, w h e reas the Wild Coast SDI
is concentrated on the agriculture and tourism sectors. S D I s
h ave also invo l ved a degree of regional cooperation - the
Lubombo SDI and the Maputo Development Corridor have
linkages with neighbouring countries. Details on these can be
found in the Swaziland and Mozambique country pro f i l e s .
As part of the SDI pro j e c t , South Africa is in the process of
launching its own version of Export Processing Zones, c a l l e d
Industrial Development Zones (IDZs). The planned IDZs are
d i f fe rent from EPZs in that they will not re ly heav i ly on low
wages or incentive packages for their success, but instead will
focus more on creating a competitive and efficient env i ro n m e n t
for export pro d u c t i o n .The emphasis will be on a high level of
s k i l l s , re s e a rch and deve l o p m e n t , t e c h n o l o gy and wo r k p l a c e
o r g a n i s a t i o n ,as well as on networks and dow n s t ream linkages.
IDZs are like ly to be developed close to ports or airports in
o rder to minimise transport cost; among the current are a s
being considered for development are the Coega harbour (near
Po rt Elizabeth), S a l d a n h a ,R i c h a rds Bay and the West Bank (East
L o n d o n ) .
South A f r i c a ’s Investments in the SADC Region
I nvestments by South African companies in the SADC re g i o n
totalled USD 82.9m in fiscal 1997/98. I nvestments are to a large
extent concentrated in the retail sector, . Among the largest
i nvestors in the region so far are Standard Bank, South A f r i c a n
B rewe r i e s , and retail chain Shoprite-Checke r s .The mining and
e n e r gy sectors are also favo u red by South African inve s t o r s .
Some recent investments by South African companies in the
SADC region include:
A n go l a
– De Beers invested an amount of USD26.8m in mining activities
in 1997.
B o t sw a n a
– G a b o rone Private Hospital was the recipient of a USD11.5m
i nvestment from A f rox in 1994.
M a u r i t i u s
– Nedbank acquired a 20.1 percent stake in Mauritius’s second
largest commercial bank, the State Bank of Mauritius in 1997.
M o z a m b i q u e
– The Industrial Development Corporation is financing the
p roposed USD1.03bn development of an iron-carbide export
plant at Map u t o
– Alusaf is developing the USD1.59bn Mozal aluminium plant
near Maputo
– Gencor may be developing a USD199m mineral sands pro j e c t
n o rth of Beira, as well as a USD298m titanium-diox i d e
smelter at Nacala.
N a m i b i a
– The iron and steel company ISCOR has invested an amount
of USD6.9m in mining and quarrying activities in Rosh Pinah
in 1996.
Ta n z a n i a
– R a n d gold is invo l ved in the proposed development of an ore
body at Lake V i c t o r i a
– Anglo American have acquired a majority stake in a
USD125m nickel and cobalt project and is expected to inve s t
USD27m in the Kabanga Nickel Company
– Engen have invested USD19.9m in an oil terminal at the port
of Dar es Salaam
– South African Breweries has acquired a 45 percent stake in
Tanzania Breweries and a five - year management contract
( m a r ket share increased from 25 percent to 75 percent in
t wo years and the brewe ry posted its first profit ever in the
second ye a r ) .
Z a m b i a
– Avmin has acquired the mining rights to the Ko n kola Nort h
copper mine, as part of ZCCM’s privatisation
– I nvestec Bank is financing up to USD23.8m of First Quantum
Minerals as Bwana Mkubwa copper pro j e c t
– Shoprite Checke r s , a retail chain, h ave purchased six trading
sector outlets and are planning to invest over USD7.5m in
refurbishing and developing the supermarke t s
– Z a m a n g l o, a subsidiary of A n g l o - A m e r i c a n , and Indol
International BV, a subsidiary of South African Brewe r i e s ,
h ave purchased Zambia Brewe r i e s
Z i m b a b we
– Macmed Health Care invested USD4m in Zimbabwe ’s
pharmaceutical and medical industry in 1997.
P r i v a t i s a t i o n
The Cabinet ap p roved a set of guidelines in September 1995 fo r
the restructuring of state assets, and the first privatisation
i n i t i a t i ve (the sale of six radio stations) was completed in 1996.
The state telecommunications company Te l kom was part i a l ly
privatised in 1997 - winning the bid for a 30 percent stake was
a consortium made up of US company SBC and Te l e ko m
M a l ay s i a .Sun Air was also sold off last ye a r, for USD9.9m, to a
c o n s o rtium of inve s t o r s ,including Rethabile Consort i u m , C o -
o rdinated Network Investments and Comair, and a 20 perc e n t
s t a ke in the A i r p o rts Company was re c e n t ly aw a rded to
A e ro p o rti Di Roma.
A restructuring strategy has been developed for SAFCOL, t h e
state fo re s t ry company, in which the government will maintain a
minority shareholding of the company.Legislation to corporatise
E s kom is due to be presented to Parliament in October 1998.
F u rt h e r m o re, the privatisation of the state’s arms company,
D e n e l , will begin with the public offer of its info r m a t i o n
t e c h n o l o gy wing, Denel Info r m a t i c s .The Transnet Group is busy
u n d e r going re s t r u c t u r i n g ,expected to be completed this year -
up to 25 percent of the equity of the new company will be sold
to a strategic equity part n e r. The state-owned holiday re s o rt
c o m p a ny, Ave n t u r a , should be privatised in the coming few
m o n t h s .
The proceeds of privatisation initiatives will be used to re d u c e
state debt,re c apitalise public enterprises and broaden economic
p a rt i c i p a t i o n .
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