Special economic zones (SEZs) were once seen as SA’s silver bullet for industrialisation, job creation and regional upliftment. Designed to unlock investment, stimulate exports and spark local economic ecosystems, these zones were meant to serve as springboards for inclusive growth.
Instead, many have become sprawling monuments to bureaucratic excess, poor governance and public sector vanity, guzzling money while delivering very little of what they promised.
Nowhere is this truer than in the Nkomazi, Boegoebaai and Musina-Makhado SEZs, three examples of what happens when a powerful policy tool is left to wither under poor political oversight, weak intergovernmental co-ordination and the parasitic culture of consultancies feeding off taxpayer largesse.
Billions have already been spent, yet few real jobs have been created. Basic enabling infrastructure is either delayed or nonexistent. Projects are stuck in environmental, legal or planning quagmires. And the only ones benefiting consistently are the boards, consultants and entities tasked with managing these zones.
At Nkomazi we were told of “historic milestones” and global anchor tenants like DP World. But a closer look shows that of the R55.4m allocated for the 2025/26 financial year by the Mpumalanga department of economic development and tourism, up to 80% is reportedly earmarked for salaries, board fees and operational costs, not for actual infrastructure or enterprise development. Only a fraction is left for what really matters: delivering jobs and investment. This raises the question, who is this SEZ really serving?
Boegoebaai is no different. Touted as SA’s flagship hydrogen export hub, it was supposed to transform the Richtersveld region and link SA to global green energy value chains. Yet years later the only activity worth reporting seems to be PowerPoint presentations, endless feasibility studies and a rotating cast of consultants fattening up on pre-feasibility funding while the community remains untouched by opportunity.
Meanwhile, the Musina-Makhado SEZ has become the poster child for dysfunction. Originally framed as a R150bn investment opportunity, it has instead become mired in environmental controversy, land acquisition delays and growing public distrust. There is no water to support the proposed heavy industrial zone. The township establishment process remains incomplete and oversight bodies are still struggling to access key planning documents. The situation is so dire that one could argue the SEZ has moved from being a project-in-progress to a project-in-crisis.
It is difficult to determine whether the national government, provincial departments or municipal authorities are truly steering the ship. In many cases, the development agencies charged with managing SEZs, such as local economic development agencies and state-owned companies, appear to operate in silos, with minimal accountability and even less urgency. Their boards are generously remunerated, and consultant fees continue to rise even while infrastructure delivery stalls.
Despite the department of trade, industry and competition maintaining oversight of SEZ policy, implementation is fragmented. There is no national dashboard to monitor performance across all SEZs. There is no clear process to exit or repurpose failed zones. And there is certainly no appetite to publicly acknowledge that certain SEZs may need to be fundamentally restructured or shut down altogether.
This is not to say that the SEZ model is flawed in principle. On the contrary, well-run SEZs can transform economies. Coega in the Eastern Cape and Dube TradePort in KwaZulu-Natal offer partial success stories. But they remain exceptions, not the norm, and even these require renewed urgency to scale impact and deepen linkages with SMMEs and local communities.
The tragedy is that the SEZ framework still holds enormous potential. With the right governance, infrastructure and private-sector alignment, SEZs can be catalysts for localisation, exports and industrial diversification. But that potential is being squandered, not because of the model but because of how we’re managing it.
We have created fiefdoms instead of ecosystems. We have allowed SEZs to become jobs for the boys, not job creators. And we have replaced delivery with bureaucracy, reducing communities to spectators in developments that were meant to serve them.
SA can no longer afford to pour billions into underperforming SEZs without demanding tangible results. The public has every right to ask the following questions:
- What is the return on investment?
- How many permanent jobs have been created per rand spent?
- Who are the real beneficiaries — communities or consultants?
- Where are the reports on measurable progress, and why are they not tabled regularly in parliament?
We need a full audit of all SEZs — financial, governance and impact. Those that are working must be supported to scale. Those that are failing must be restructured or shut down. And the department of trade, industry and competition, working with the Treasury and the presidency, must create a performance-based funding model, where future allocations are tied directly to results.
SEZs were never supposed to be vanity projects or cash cows for a privileged few. They were meant to transform forgotten regions, attract foreign investment and build the industries of the future. If we continue down the current path, SEZs will not be remembered as engines of economic growth but as monuments to another lost opportunity.
In a country desperate for jobs, that is an unforgivable betrayal.
• Boshoff chairs the select committee on economic development and trade in the National Council of Provinces.
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