Operating Model of South Africa's Special Economic Zones

Abstract

South Africa’s SEZs were established to drive industrial development, stimulate economic growth, and attract both domestic and foreign investment (DTIC, 2025). Governed by the SEZ Act of 2016, these zones offer specialized incentives to enhance competitiveness, facilitate skills development, support technology transfer, and expand value-added exports (Phiri, 2020). Despite their potential to strengthen manufacturing sectors and increase foreign trade, concerns remain regarding their long-term sustainability, employment impact, and integration into the broader economy (UNCTAD, 2021). This study critically evaluates the operational model of South Africa’s SEZs, identifying key strengths, limitations, and contextual conditions that influence their success or failure. Using a qualitative research approach and secondary data analysis, the study examines whether SEZ policies contribute effectively to economic growth, job creation, and FDI attraction. Findings highlight that good leadership, strong systems, and strategic oversight are all vital for SEZs to succeed and benefit the wider economy.