Port Elizabeth - At a time in South Africa when business operations are struggling to keep and maintain a healthy balance sheet due to the tough economic environment, the Coega Development Corporation has posted impressive performance figures for the 2016/17 financial year.
Coega, which is the operator of the Coega special economic zone (SEZ) in Port Elizabeth, has reported a double-digit growth in new investment in the year under review, resulting in it being lauded as the “best investment destination in Africa”.
Its financial performance report released this week shows that revenue generated amounts to R532.77 million against a budget of R451.2 million. The corporation also bagged 16 new investments worth R11.69 billion, describing the performance as “beyond expectation”.
“Coega for the first time in 17 years hit half a billion rand in revenue generated. Investors increased from 36 to 40 within a year – a milestone given the tough current economic environment in South Africa,” says Coega chief financial officer Lionel Billings.
During the year under review, Coega spent R776 million on small, medium and micro enterprises (SMMEs), of which R17 million went to 11 SMMEs based in Nelson Mandela Bay. It created 16 500 jobs and 5 886 benefited from its training and skills development programme.
“Of particular interest, in line with Coega’s vision of being a catalyst for championing of socioeconomic development in the Eastern Cape, and South Africa as a whole, is the number of jobs created during the financial year under review,” said Coega’s head of marketing, Ayanda Vilakazi.
“The cumulative jobs created since Coega’s inception 17 years ago increased from 94 732 to 102 794. This includes the 16 500 jobs created this financial year.”
Billings said training and skills development were vital components of Coega’s strategic planning programme, adding that this has the potential to reduce losing skills to other provinces and to contribute to the development of the Eastern Cape economy.
“These results,” said Billings, “show that Coega continues to be a pillar of hope in the Eastern Cape, and through its projects countrywide, the impact has reached more than 6 million people.”
He said stakeholders had also played a significant role in the achievement of such results, and that they assisted Coega to move closer to achieving its 2020 Sustainable Growth Strategy.
Vilakazi said a recent study by Muffin Consulting had revealed that:
. 84% of companies that invested at the Coega SEZ reported an increase in profitability;
. 85% of investors have increased their workforce since opening at the SEZ;
. 62% of investors have expanded their operations; and
. 90% of operational investors at the SEZ have described it and its logistics park, where Volkswagen SA is located, as “the ideal location for industries wishing to grow”.
The Chinese vice-president, Li Yuanchao, on a recent visit to the Coega SEZ, said: “I have been to many developing countries and SEZs in the world – the Coega SEZ is by far the best of them all.”
The Tunisian ambassador to South Africa, Narjes Dridi, leading that country’s business delegation in April this year, said: “Our objective is to learn and have a sense of appreciation of all opportunities that relate to the Coega SEZ.”
The provision of incentives also plays a major role in attracting new investors to the Coega SEZ.
These include exemption of import duties on raw materials, semi-finished goods and capital equipment, such as machinery.
In addition, no VAT is charged on goods imported; capital equipment; land supplied for either sale, letting or any other agreement entered into; electricity and water supplied; services rendered; or consulting services.
Vilakazi said: “The good performance can be attributed to good governance and sheer determination, as well as strategic and visionary direction and leadership provided by the Coega board, together with the executive management.”
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