Energy strategy boosts Musina-Makhado Special Economic Zone

Investments in infrastructure and national government’s confirmation of SEZ status for the MMSEZ are good indicators of progress for this catalytic project.

Energy is at the heart of the MMSEZ plan and is vital to being able to achieve the goal of adding values to raw materials, including minerals, within the zone. The plan to build a coal-powered power station has been phased out. The MMSEZ has signed an agreement with a Chinese company for the first phase of a project that will supply 1 000MW of solar power to support the SEZ’s metallurgical complex. A pre-feasibility study for the project has been done. A project-based EIA application will begin after a site has been chosen and confirmed.

The two local municipalities in the area have been allocated R147-million by provincial government for infrastructure upgrades, including electricity.

Major investments in infrastructure are being provided by the Provincial Government of Limpopo through the Limpopo Department of Economic Development, Environment and Tourism (LEDET).

MMSEZ CEO Lehlogonolo Masoga.

The launch of a Renewable Energy Strategy by Musina-Makhado Special Economic Zone (MMSEZ), in partnership with the United States Agency for International Development, has been announced by the Limpopo Premier, Chupu Stanley Mathabatha.

This is another sign of the progress being made towards the realisation of this massive catalytic project, which is set to transform the northern part of Limpopo Province, the province as a whole and the region.

The strategy will act as a blueprint to guide investments in the SEZ’s energy cluster while also promoting sustainable development and localisation. The partnership with USAID will contribute to mitigating the impact of the national energy crisis and serve to promote local business.

Of R600-billion pledged to develop infrastructure for the North Site of the MMSEZ over the mediumterm expenditure framework (MTEF), some R39million was spent up to 2022 on engineering work and in the 2022/23 financial year, a further allocation of R200-million was made for items such as security, water and electricity infrastructure.

A plan to grow the economy

The Musina-Makhado Special Economic Zone is an initiative of the Limpopo Provincial Government. The MMSEZ state-owned company (MMSEZ SOC) has been established as the implementing agent of the project and is a subsidiary of the Limpopo Economic Development Agency (LEDA), which reports to the LEDET.

Approval and support for the concept and location of the SEZ has been obtained from national government through the Department of Trade, Industry and Competition (dtic) and forms part of broad national plans to diversify and grow the national economy. Private sector participation will be key to the success of the SEZ in driving growth in the region. Sectors represented in the SEZ will include energy and metallurgy, agro-processing, logistics and general manufacturing. The MMSEZ has appointed a private operator for the Energy and Metallurgical Complex (EMSEZ).

LEDET estimates that the project pipeline of the MMSEZ is worth R150-billion with the potential of creating over 21 700 job opportunities.

A lasting legacy

The MMSEZ CEO, Lehlogonolo Masoga, can look back on a productive term of office in which the building blocks for the zone have been firmly laid.

He makes it clear that it is not about producing short-term gains. “The leadership of the MMSEZ is resolute about harvesting the capital flow into the Musina-Makhado Corridor to use it as a catalyst for growth and development, not only for the benefit of the two towns but Limpopo in general,” says Masoga.

Bringing Limpopo’s economy decisively into the digital age is part of how Mosoga sees the MMSEZ’s mission: “It is our strong conviction that through the plans that we have developed we must guide development in the corridor into one direction – Smart City.”

The list of infrastructure sectors in which improvements will be brought by the SEZ is impressive: roads, electricity, sewer, water, rail line, houses, retail stores, hotels, airport, broadband infrastructure and a new dam.

Masoga is careful to place the zone in its national and international context: “The MMSEZ Smart City Framework will have a lasting impact on Limpopo with a corridor of smartness from Polokwane to Beitbridge. Within this corridor there will be nodes that impact on settlements and economic activity. In addition, this corridor will extend and form part of the Gauteng City Region footprint in a real and dynamic way and extend to Zimbabwe, thereby contributing to an integrated and prosperous Africa.”

The Musina-Makhado SEZ is located in the vicinity of the Beitbridge Border Post which is one of the busiest ports of entry to South Africa and a gateway to countries in the Southern African Development Community (SADC).

The SADC Industrialisation Strategy and the Africa Continental Free Trade Area (AfCFTA) will boost regional and inter-regional trade volumes, giving the MMSEZ’s prime location further importance.

The MMSEZ has the potential to become an inland intermodal terminal, facilitated by its anchoring position along the north-south corridor, and directly connecting to the country’s major ports through both the N1 highway and the Johannesburg-Musina railway line, for the transshipment of sea cargo and manufactured goods. With many companies and countries wanting to decentralise and diversify their distribution hubs, there is an opportunity for the MMSEZ North Site as a potential regional inland port.

National policy

The MMSEZ is part of the national Special Economic Zone Programme which has as its chief objectives the growth and development of local economies and the improvement of connections between regions.

As Maoto Molefane, Acting Deputy Director General of the Department of Trade, Industry and Competition (dtic) explains, “One of the strategic objectives of the dtic is to transform and build an inclusive economy through targeted spatial industrial development instruments such as SEZs and Industrial Parks, improving the investment climate and level of fixed investment in the economy, and increasing value-added exports.

“The Special Economic Zone Programme helps the dtic to achieve this. It is one of the key development mechanisms of the dtic’s National Industrial Policy. The purpose of the SEZ programme is to attract Foreign Direct Investments and build a solid manufacturing base into globally integrated value chains which will provide an environment where the economy can provide more sustainable jobs and reduced levels of poverty and inequality.

The dtic has a policy which approves SEZ applications based on supporting a particular region’s comparative advantages. In the case of MMSEZ, the area is already a mining hub and sits at a logistics and transport crossroads which acts as bridge from South Africa into the SADC region. Says Molefane, “SEZs are used to accelerate industrialisation through coordinated planning and the development of state-of-the-art infrastructure.”

Having several SEZs around the country addresses the historical imbalance in development which has the potential to undermine efforts to industrialise the country. As Molefane explains, putting SEZs in areas with potential for development will help to “unlock the latent economic potential of different districts” such as northern Limpopo.

Partnerships in skills

The local Technical Vocational and Educational and Training college, Vhembe TVET College, is investing in establishing a campus in Musina to complement the development of the SEZ.

A satellite campus was originally established but through a partnership between the MMSEZ SOC and Vhembe TVET the engineering campus will relocate to a site within the SEZ site. De Beers will support the graduates with on-the-job training. The SEZ will thus be supporting the skills profile of the district and combining skills development and industrial development. Additional investments in student accommodation and retail outlets to support the student population will further enhance the diverse offering within the SEZ.

Having a tertiary college located within the SEZ will form an important first building block towards creating a Smart City in Musina.

CEO Masoga is excited about the potential of this collaboration. He notes: “The beauty of the MMSEZ-VTVET partnership lies in the fusing of skills development and industrial platforms within the same Zone. We are pleased with the support provided to this pioneering initiative by both the provincial and national government. This initiative will also form part of the foundation and a seed for the development of a new smart city in Musina.” ■