Mpumalanga Trade and Investment Profile 2024-25 by Global Africa Network Media

THE PLACE OF THE RISING SUN

MPUMALANGA TRADE & INVESTMENT PROFILE

WHY INVEST IN MPUMALANGA?

• 68% of land area in the province is used by agriculture

• Mpumalanga’s three biggest sectors are manufacturing, mining and agriculture

Mpumalanga’s diverse and resource-rich economy makes it one of the most attractive trade and investment destinations in South East Africa.

A large, growing domestic market and excellent access, supported by worldclass infrastructure, to the East African and Indian Ocean markets through Maputo Port makes Mpumalanga an ideal investment location for export-driven manufacturing and production.

Mpumalanga is one of South Africa’s most productive and important agricultural regions and through strategic investments in the Mpumalanga International Fresh Produce Market (MIFPM) and the Nkomazi Special Economic Zone (NSEZ) the province is set to become a major force in food production and distribution.

Mpumalanga’s sophisticated and well-segmented tourism and hospitality sector in a post-Covid world is ripe for investment and expansion.

Mpumalanga’s STRATEGIC LOCATION makes it a valuable transport and logistics hub

A province in eastern South Africa, bordering the nations of Swaziland and Mozambique

• Maputo Development Corridor enhances logistics

• Preferential access to lucrative EU market

• Proximity to South Africa’s economic heartland

• Access to regional SADC market: 360-million population

• Access to deepwater Port of Maputo

MPUMALANGA’S ECONOMY

UNIQUE SELLING PROPOSITION

•Abundant resources: minerals and agricultural produce

• Established manufacturing infrastructure: smelters, petrochemicals, food processing, paper, sugar

• Strategic location, access to regional and global markets

• Tourism hotspots: the iconic Kruger National Park, world-class reserves, adventure tourism and new UNESCO World Heritage Site

• Mpumalanga International Fresh Produce Market (MIFPM)

• Nkomazi Special Economic Zone (NSEZ)

• The new University of Mpumalanga

• Support for Green Economy research and investment

Capital City Mbombela (Nelspruit)

Capital City

Mbombela (Nelspruit)

Population 4.7-million people

Population

4.5-million people

Main major towns Ermelo eMalahleni Middelburg Secunda

Main major towns

Ermelo

eMalahleni

Middelburg

Secunda

The provincial economy of Mpumalanga is exceptionally diverse. Established industries in the province include Mining, Stainless Steel, Petrochemicals, Pulp and Paper, Ferro-Alloys, Energy Generation, Tourism, Agriculture and Agro-Processing.

Companies in these sectors include global giants in their industries such as Sasol (energy and chemicals), Sappi (paper, packaging, pulp and forests), Samancor Chrome (ferrochrome), Sibanye-Stillwater and Glencore (mining).

The province’s commercial farmers are among the most efficient in the world, exporting huge quantities of everything from citrus to macadamia nuts. Columbus Stainless is the only stainless-steel manufacturer on the continent.

GOVERNANCE

The province has three district municipalities and 17 local municipalities. Several agencies which promote the regional economy report to the Mpumalanga Provincial Government. Large parts of the province comprises extensive rural villages that form part of areas run by traditional authorities.

TRANSPORT

Two airports at Hoedspruit and Mbombela (Kruger Mpumalanga International Airport, KMIA) plus many airfields. Extensive freight rail network, busiest in South Africa. N4 highway (Maputo Corridor) is an east-west spine of a highly-developed road system.

Kruger Mpumalanga International Airport (KMIA) in Mbombela plus many airfields such as Middelburg. Extensive freight rail network, busiest in South Africa. N4 highway (Maputo Corridor) is an east-west spine of a highly developed road system.

Mpumalanga

Gert Sibanda Ehlanzeni

Nkangala Airport Kruger Mpumalanga International Airport

Mpumalanga

Gert

Sibanda Ehlanzeni

ABOUT MEGA

The Mpumalanga Economic Growth Agency (MEGA) is the official Economic Development Agency for the Mpumalanga Provincial Government.

MEGA’s primary mandate is to foster the sustainable growth and development of Mpumalanga’s economy through its operational activities of Trade and Investment Promotion, Development Funding, Equity Investments, and Property and Infrastructure Development. The Agency remains accountable to the Mpumalanga Department of Economic Development and Tourism (DEDT). MEGA is the foreign investor’s or trader’s first point of contact for doing successful business in Mpumalanga Province. Through the Trade and Investment Promotion Division, the Agency provides a variety of services to potential investors and trading partners.

PLANNING THE WAY FORWARD

MEGA SERVICES

MEGA staff will go out of their way to make the process of investing in Mpumalanga or starting a business in the province easy. MEGA is focussed on customer needs and provides innovative solutions with a high level of service. Services include:

• Foreign Trade Promotion

• Investment Promotion

• Funding

• Property Management and Infrastructure Development

National government has articulated a Nine-Point Plan which seeks to prioritise projects that will tackle key economic issues. MEGA is aligned with the plan, which include issues relevant to growing the provincial economy:

• revitalise agriculture and the agro-processing chain

• advancing mineral beneficiation

• implementing the Industrial Policy Action Plan (IPAP) effectively

• unlocking the potential of SMMEs, cooperatives and township and rural enterprises

• resolving the energy challenge

• stabilising the labour market

• upscaling private investment

• investment in science and technology, water and sanitation, transport and broadband connectivity

MAPUTO DEVELOPMENT CORRIDOR

The Maputo Development Corridor is South Africa’s leading Spatial Development Initiative (SDI), linking Mpumalanga Province, Gauteng Province and the Nkomazi Special Economic Zone with the deepwater Port of Maputo in Mozambique. This efficient corridor provides investors and exporters with good access to the export markets of South East Africa, the Indian Ocean Rim and Far East Asia. The Maputo Development Corridor comprises road,

SOUTH AFRICA

rail, Special Economic Zone, border posts, port and terminal facilities. The corridor runs through the most highly industrialised and productive regions of Southern Africa. The Corridor has been extensively upgraded to international standards and links the industrial heartland of South Africa to its nearest port in Maputo, Mozambique, which is one of the fastest-growing countries in South East Africa.

KEY SECTORS AGRICULTURE

Agriculture in Mpumalanga is responsible for 3% of the province’s gross value added by region (GVA-R) and can be divided into the following categories (see map, right).

AGRICULTURE

SUMMER CEREALS & LEGUMES

MAIZE Maize meal

SOYA Meal, Edible oil

CANOLA Edible oil

SUNFLOWER Edible oil

TROPICAL & SUBTROPICAL FRUIT

CANE SUGAR Sugar / confectionery

CITRUS Juice & concentrate

MANGOES Dried, frozen, juice & concentrates

LITCHIS Dried, frozen, juice & concentrates

AVOCADOES Avocado oil

GUAVA Dried, frozen, juice & concentrates

MACADAMIA NUTS

Processed & confectionery

Mpumalanga Province is one of South Africa’s most productive and important agricultural regions and plays a key role in the export profile of South Africa, primarily in fruit and nuts. The province’s economic diversity extends into the agriculture sector where the natural topography of the province divides this sector between the Highveld and Lowveld Regions.

The Highveld Region in the west of the province is at an elevation of between 4 000 and 6 000 feet above sea level. This allows for the large-scale and commercial production of cereals and legumes like maize, soya, canola and sunflower.

The subtropical region of the Mpumalanga Lowveld plays a key role in the agricultural export profile of the province, primarily in fruit and nuts.

Mpumalanga Province is one of the world’s largest producers and exporters of citrus fruit. Duty-free exports of South African citrus to the USA under the African Growth and Opportunity Act (AGOA) reached a value of $122.7-million in 2023 and are expected to continue their strong annual growth as the USA is still considered a premium market.

KEY SECTORS FORESTRY

HIGHVELD : Summer cereals and legumes: maize, soya, canola, sunflower. Animal products: bovine meat, swine, sheep and poultry.

LOWVELD: Subtropical and citrus fruits, nuts and cane sugar.

Mpumalanga Province is the world’s largest producer and exporter of macadamia nuts. The province earned $232-million in exports in 2023, $32-million of this to the US. There have been major new investments in processing facilities in Mpumalanga.

Mpumalanga’s rich agricultural produce is utilised by companies such as McCain, Nestlé and PepsiCo.

9:1

Forestry is a key driver for the development of Mpumalanga’s rural economy and a major provider of job opportunities. About 40% of SA’s sustainable forests are located in Mpumalanga Province.

The industry comprises logging, saw-milling, wood products, wood board, pulp and paper as well as specialised cellulose. Specialised cellulose is a sought-after natural, renewable fibre with a wide range of uses in the textile, consumer goods, foodstuff and pharmaceutical industries and is produced in large quantities at Sappi Ngodwana.

R9.5 billion

Amount invested in the foresty industry

PG Bison has recently invested R560-million in a new front-end dryer for its particle board plant in Mkhondo (Piet Retief). The company is also building a new medium-density fibreboard (MDF) plant at its Mpumalanga plant.

SAFCOL/Komatiland is the state forestry company with commercial and non-commercial operations covering a land area of 187 320ha.

Sonae Arauco is an established investor and a local BEE company, the FX Group, has established a greenfield particle board plant in Lothair in the Gert Sibande District.

Mpumalanga’s ratio of commercial farmers to small-scale farmers

KEY SECTORS MINING, MINERALS AND ENERGY

Mining is the province’s largest single sector, providing employment to 5.2% of the province’s workforce and making up 20% of gross value added by region (GVA-R).

Mpumalanga is the third-largest coal-exporting region in the world with 83% of South Africa’s coal production and 50% of national coal reserves. Coal is the lifeblood of the provincial economy, fuelling 11 Eskom power plants, which produce 80% of South Africa’s electricity. Coal is Mpumalanga’s single largest export product, shipping mainly to India and Japan.

of South Africa’s coal production

Other minerals: Gold mining takes place in Evander, Pilgrim’s Rest and Barberton. Gold is the second-largest export from the province. Platinum and chrome ore mining are located in the Steelpoort and Burgersfort areas in the north of the province and make up part of the Bushveld Igneous Complex.

The mining services and technology industry is an important subsector in Mpumalanga. With over a century of commercial mining operations in the province, homegrown technologies are now exported around the globe.

National utility Eskom will spend R3.3-billion on the revival of the Matla coal mine. Exxaro Resources will manage the project and do the mining while major companies such as DRA, Worley, Sandvik and WBHO will also be involved.

Other companies engaged in expansion of life-of-mine projects are Pan African Resources and Evander (Elikhulu tailings), Exxaro Resources (Leeuwpan) and South32, which is spending about R4.3-billion at Klipspruit.

Platinum is an important mineral for the modern economy. Two Rivers is a joint venture between Implats (46%) and African Rainbow Minerals which is located on the southern part of the eastern limb of the Bushveld Igneous Complex, 35km south-west of Burgersfort in Mpumalanga.

Lydenburg is home to the Lion ferrochrome smelter that is a joint venture between Glencore and Merafe Resources.

KEY SECTORS GREEN ECONOMY AND JET

Mpumalanga has historically been at the heart of the South African energy and industrial complex and is still heavily reliant on the mining and burning of fossil fuels.

The Mpumalanga Provincial Government has been proactive in exploring opportunities in the Green Economy and pursuing a just transition to a low-carbon economy which secures the future and livelihoods of workers and their communities.

• Building technologies: greener and more energy-efficient

• Transport and logistics: greener and more energy-efficient

• Established the Mpumalanga Green Energy Cluster Agency

50% of South Africa’s national coal reserves

Achieving such a just transition would require an integration of economic opportunities in sectors outside of energy and mining.

A Just Energy Transition (JET) to a Green Economy presents th following opportunities:

• Renewable energy: solar, biomass, natural products

• Gas and associated industries

• Sustainable smart agriculture: environmentally friendly agriculture and agricultural processing

• Circular Green Economy: waste recycling, water reclamation, land rehabilitation

• Soft infrastructure: reskilling and institutional capacity-building for a carbon-neutral future

• Hard infrastructure: investment and expertise are needed in urban planning, water and waste management

Specific opportunities include:

•There are plans for the decommissioning of 11 000MW of Eskom’s coal-fired capacity by 2030. Opportunities are presented by repurposing land.

• The vast new fields of natural gas found off the coast of Mozambique could have a big impact on the Mpumalanga economy.

• A Renewable Energy Development Zone (REDZ) is planned for eMalahleni / Witbank where coal jobs are at risk.

Mpumalanga has ESKOM POWER plants

KEY SECTORS MANUFACTURING

Three primary pillars of the manufacturing sector in Mpumalanga account for more than 60% of the output of the manufacturing sector, which overall makes up 15% of gross value added, regional (GVA-R).

MAIN EXPORTS

STAINLESS STEEL

Cutlery

Catering equipment

Surgical instruments

Automotive components

STEEL White & grey goods

Pipes & tubes

Wire

PETROCHEMICALS

Plastic products

Recycling plastics

Artificial rubber products

Paint & vanish

Inks & dyes

FOOD PROCESSING

Maize meal

Machinery

Frozen & dehydrated

VEGETABLES Preserves, pickles & condiments

Nuts

PAPER Recycling

SUGAR Confectionery

MINING Machinery & services

RENEWABLE ENERGY

Solar & biofuel

Biomass

Fuel, petroleum and chemical products are manufactured at the Sasol Secunda plant in Secunda, Gert Sibande District. It is one of the world’s largest synthetic fuels facilities, producing 60-million litres of liquid fuel a day. Products produced include petroleum, paraffin, jet fuel, creosote, bitumen and waxes.

The ferro-alloy and stainless-steel industries are based in the Nkangala District. Columbus Stainless in Middelburg is Africa’s only producer of stainless-steel flat products. Samancor Chrome (Ferrometals), the world’s second-largest ferrochrome producer, has two plants in Mpumalanga.

Agro-processing is mainly based in the Lowveld Region and consists of manufacturing forestry products (pulp, paper and cellulose), sugar at the Selati RCL Foods plants in Nkomazi and processing subtropical fruit and nuts.

The province’s flourishing macadamia nut industry has a number of large processing facilities based around the provincial capital, Mbombela. Subtropical fruits like mango, banana, papaya and citrus are processed into juice concentrate or dried for export.

There is a geographical divide in the manufacturing sector. Fuel, petroleum and chemical production occurs in the southern Highveld Region clustered around Sasol’s plants.

The northern Highveld area, including Middelburg and eMalahleni (Witbank), is home to ferro-alloy, steel and stainless-steel concerns. Creative thinking kicked in when Highveld Steel’s troubles reached a tipping point. The 1 000ha property in eMalahleni has been re-purposed as a multi-purpose site for industry and commerce. Called the Highveld Industrial Park, the project promotes a wide range of manufacturing enterprises.

In the Lowveld, agricultural and forestry products are processed while Sappi’s giant mill is close to the company’s forests south-west of the provincial capital, Mbombela.

KEY SECTORS

TOURISM

The Tourism Industry in the Mpumalanga Province is one of the most strategic sectors and has the potential

to grow the economy and contribute to job creation. The importance of tourism to the economy of Mpumalanga cannot be overstated.

1.1

International tourists in 2023

Despite the lacklustre global economic growth and the decline in disposable income, foreign and domestic tourists have been steadily visiting Mpumalanga’s shores. Over 1.1-million international tourists visited Mpumalanga in 2023 with international tourists spending R3-billion in the province. The casino industry million

Income

has enjoyed great growth and shows signs of further potential for additional investment. Mpumalanga boasts world-class parks and reserves, astonishing botanical gardens, rivers and lakes. Safaris are a major drawcard, and the Kruger National Park is the jewel in South Africa’s tourism crown which brings in R2-billion annually. Tourism subsectors such as business travel (including conference facilities), adventure, heritage and cultural tourism all hold huge growth potential.

from Kruger National Park

INVESTMENT OPPORTUNITIES TOURISM

Selected Strategic High Impact Projects:

BOURKE’S LUCK POTHOLES HOTEL

This natural water wonder is a major tourism attraction in the Mpumalanga Lowveld. This project presents an investment opportunity for a five-star hotel and a top-quality restaurant.

Feasibility study: completed

Environmental Impact Assessment (EIA): commenced Model: Joint Venture (JV), Build-Operate-Transfer (BOT)

GOD’S WINDOW SKY WALK

The project to build a “Sky Walk” – an income-generating tourism attraction off the edge of the 700m God’s Window cliffs – giving 360-degree panoramic views out and down through a glass floor.

Feasibility study: completed EIA: commenced

Investors: secured Model: JV, BOT

3.6 BILLION

Age of volcanic and sedimentary rock at Barberton Makhonjwa Mountains, a UNESCO World Heritage Site.

BLYDE RIVER CANYON CABLE CAR PROJECT

The Blyde River Canyon is the largest and deepest green canyon in the world and offers a spectacular opportunity to build a cable car transporting tourists from the top of the canyon to the peninsula below.

Feasibility study: completed EIA: commenced Model: JV, BOT

500+

Bird species recorded in the Kruger National Park, including the Kori Bustard, Martial Eagle, Southern Ground Hornbill and Lappetfaced Vulture

Nature reserves are run by the Mpumalanga Tourism and Parks Agency and Kruger National Park is run by SANParks

INVESTMENT OPPORTUNITIES PRODUCE MARKET

Selected Strategic High Impact Projects: Mpumalanga International Fresh Produce Market

MEGA is establishing a R1.2-billion fresh produce market facility located in Mbombela, the Mpumalanga International Fresh Produce Market (MIFPM). To date the province has invested an estimated R540-million in the project.

Mpumalanga is one of South Africa’s most productive and important agriculture regions. It is home to predominantly tropical and subtropical crops and vegetables owing to its conducive climate. The tropical and subtropical crops consist of avocado, banana, citrus, ginger, granadilla, guava, litchi, macadamia nut, mango, papaya and pineapple.

The vegetables produced include potatoes, tomatoes, pumpkins, sweet corn, onions, sweet potatoes, beetroot, carrots, green peas, cauliflower, cabbages and green beans.

Site: The site is in Mbombela on a 248ha plot less than 10km from the Central Business District. It is situated within the Maputo Development Corridor (MDC), linking Mpumalanga, Gauteng Province and the Nkomazi Special Economic Zone with the deepwater Port of Maputo in Mozambique.

The market: The market will give local farmers access to local, regional and international fresh produce markets and will aid in ensuring food security for the region.

The infrastructure of the MIFPM will attract international as well as the large domestic food retailers as a key processing and distribution

point. It will also secure Mpumalanga’s position in the regional export market in fresh produce.

The market will offer:

• Open trading halls for fruit and vegetables

• A meat, fish and flower market

• Complementary cold storage, ripening facilities and pallet handling

• Processing facilities

• An export hall

• Bulk-breaking facilities for retail outlets

• Links with statutory organisations such as customs, PPEBC and EuroGap

• Transport and logistics enterprises

• Shared collation and pack house facilities for SMMEs

• Commercial services including banks and restaurants

• A food bank for NGOs

Feasibility study: completed EIA: completed

Bulk infrastructure: completed Top structures: underway Model: JV, BOT Value: R1-billion

INVESTMENT OPPORTUNITIES NKOMAZI SEZ

Selected Strategic High Impact Projects: Nkomazi Special Economic Zone

The Nkomazi Special Economic Zone has been officially designated and MEGA has been appointed to establish the entity.

SEZs are geographically designated areas set aside for specifically targeted economic activities that are supported through special tax incentives. An SEZ aims to be an economic development tool to promote rapid economic growth by using various support measures to attract targeted foreign and domestic investments and technology. The main goal is to support the implementation of South Africa’s industrial development programme.

Strategically positioned in the border town of Komatipoort, the SEZ offers a multi-sector base of operations along the Maputo Development Corridor which provides exporters with good access through Maputo Port to the export markets of South East Africa, the Indian Ocean Rim and Far East Asia.

The Nkomazi SEZ will target investment from the agriculture, agro-processing, nutraceuticals and fertiliser production sectors, as having a strong focus on logistics and trade services.

The NSEZ offers the investor a unique and incentivised base of operations on the Maputo Development Corridor running through the most highly industrialised and productive regions of Southern Africa.

The Maputo Corridor is bound to develop even more as the Maputo harbour improves its handling and scheduling

capacity. In the event that a second rail line to Maputo to complement the current rail link is developed, the shipment of mining products

FOREIGN TRADE

MTIP photo credits. Cover: Top three: Ryan Baker/Pexels; Forestry South Africa; Sasol: bottom four: SA Tourism/Flickr; University of Mpumalanga; Mpumalanga Tourism and Parks Agency (MTPA); Enza Construction. Body: cutting wood (Ludwig Sevenster); chimney at night (Sasol); tourism opportunities (MTPA); market variety (Jacopo Maiarelli on Unsplash); furnace (Anglo American); macadamias (SCTIE); timber (Ludwig Sevenster); coal (Thungela Resources); citrus exports (Citrus Growers Association); truck (Nelson Gono on Unsplash); port (TNPA); fruit pickers (Chris Kirchoff/ Brand SA); red peppers (Omotayo Tajudeen on Unsplash). Outside back cover: Sasol.

THE PERFECT LAUNCH PAD FOR AFRICA

The African Continental Free Trade Area could revolutionise African trade: Mpumalanga is the perfect launch pad for manufacturers and exporters.

CREDIT: TRALAC

The African Continental Free Trade Area (AfCFTA) has been agreed on by almost all African nations and holds the potential to change the nature and size of trading on the continent in profound ways.

Mpumalanga Province, as a strategically positioned region with a dynamic manufacturing sector and excellent logistics and infrastructure, provides the perfect launch pad for investors looking to take advantage opportunities that will be created by the AfCFTA agreement.

The burgeoning African middle-class is a global trend that economists are carefully watching. As more sophisticated infrastructure is rolled out across Africa, having a base with good connections to ports and with good air, road and rail connectivity will be vital. Mpumalanga has all of that, and more.

The operational phase of the AfCFTA was launched during the 12th Extraordinary Session of the Assembly of the Union on the AfCFTA in Niamey, Niger, on 7 July 2019. Start of trading became officially legal under the AfCFTA Agreement as of 1 January 2021.

On 7 October 2022, the AfCFTA Secretariat launched the AfCFTA Guided Trade Initiative in Accra to allow for commercially meaningful trade under the agreement to commence for eight participating countries: Cameroon, Egypt, Ghana, Kenya, Mauritius, Rwanda, Tanzania and Tunisia, representing the five regions of Africa. This initiative was used to pilot the operational, institutional, legal and trade policy environment under the AfCFTA.

As at August 2023, 47 of the 54 signatories (87%) had deposited their instruments of AfCFTA ratification (ordered by date): Ghana, Kenya, Rwanda, Niger, Chad, Eswatini, Guinea, Côte d’Ivoire, Mali, Namibia, South Africa, Congo, Djibouti, Mauritania, Uganda, Senegal, Togo, Egypt, Ethiopia, Gambia, Sahrawi Arab Democratic Republic, Sierra Leone, Zimbabwe, Burkina Faso, São Tomé & Príncipe, Equatorial Guinea, Gabon, Mauritius, Central African Republic, Angola, Lesotho, Tunisia, Cameroon, Nigeria, Malawi, Zambia, Algeria, Burundi, Seychelles, Tanzania, Cabo Verde, Democratic Republic of the Congo, Morocco, Guinea-Bissau, Botswana, Comoros and Mozambique.

In January 2023 South African President Cyril Ramaphosa officiated over the first official trade shipment under the agreement, out of the Port of Durban.

Af CFTA FAST FACTS

Africa’s exports could increase by $560-billion and some experts predict that continental business and consumer spending could reach $6.7-trillion by 2030.

$450 BILLION

AfCFTA could boost regional income by 7% or $450-billion (Source: the World Bank)

ABOUT SADC

South Africa is a member of one of Africa’s oldest regional organisations, the 16-member Southern African Development Community, (SADC). This enables duty-free trade within a growing market of more than 360-million people. All goods shipped under SADC Certificate of Origin receive duty-free status.

Duty-free trade

AfCFTA could lift -million people out of poverty, according to the World Bank

AfCFTA could boost wages by up to * World Bank estimate 30

10%

within a GROWING MARKET of more than360 million people

• FACILITATING INTERNATIONAL TRADE

• PROMOTING FOREIGN INVESTMENT

• EMPOWERING BUSINESS SUCCESS