The South African government is hoping its new Special Economic Zones (SEZs) Bill and policy will create the framework for the development of new industrial nodes outside of the traditional industrial heartlands of Gauteng, the Western Cape and KwaZulu-Natal, while improving the performance of the existing Industrial Development Zones (IDZs). Trade and Industry Minister Dr Rob Davies (pictured) says the draft legislative framework has been crafted in an effort to “broaden” the scope and composition of dedicated industrial areas and to support industrial decentralisation, where the economic development case could be proven. Under the proposed law, municipal and provincial authorities, or even public–private partnerships, are empowered to approach government with plans to develop SEZs, where such concentration of industrial infrastructure could improve prospects for investment, growth and job creation over a sustainable period. The proposed law also aims to improve the funding, governance and operational performance of the four existing IDZs, as well any future SEZs. In fact, an SEZ board has been proposed to oversee zone designation and permitting, as well as to manage a dedicated fund that will be established to create a funding pool for the new SEZs, as well as support some of the possible future incentives. No value was attributed to the fund, which will probably be capitalised through the Budget. [ADD PIC OF ROB DAVIES]

IT SERVICES SPEND TO EXCEED R40bn IN 2012 – The information technology (IT) services market in South Africa has seen healthy uptake, growing some 8% year-on-year in 2010, to contribute more than a third of the total IT spending in the country, market research and advisory company International Data Corporation (IDC) says. The company expects the IT services market to exceed $5-billion, or R40-billion, in 2012. “After the freeze in IT budgets that came about as a result of the global economic crisis, 2010 saw a rebound in IT services spending. “The growth in IT services spending was driven by a recovering economy, increased business confidence, expanding bandwidth availability, and various infrastructure investments made in the country in 2010,” says IDC South Africa IT services research analyst Suzanne Nolan. In a recent research report, IDC states that IT outsourcing constitutes about 40% of the South African IT services market, which represents the largest market share of all IT services foundation markets, followed by systems integration and installation and support services. “This growth was mainly driven by discrete managed services rather than by traditional information system outsourcing contracts. “The healthy growth in outsourcing services signifies a level of sophistication and maturity within the IT services segment,” Nolan adds. Further, IDC states that services, such as network and desktop outsourcing and infrastructure hosting, saw increased uptake in 2010, fuelled by the incremental supply of data centre space and increased customer awareness of the managed services model.

SA NEEDS TRANSPARENT, PREDICTABLE POLICIES – SACCI – The South African Chamber of Commerce and Industry (Sacci) has expressed concern about South Africa’s credit rating outlook, which was lowered from stable to negative. Fitch Ratings downgraded South Africa’s long-term foreign credit rating outlook citing limited progress with issues such as chronic unemployment. The outlook downgrade comes a year after South Africa achieved its stable outlook. “South Africa needs to increase the rate of investment, savings and job creation. It is also paramount that economic policies be transparent, predictable, consistent with future debt sustainability and supportive of business growth,” says Sacci CEO Neren Rau. He adds that strong rigidities in the labour market contributed to jobless growth, increasing pressure on social spending and grants. This is despite the National Treasury’s aim of changing the country’s composition of expenditure away from consumption. While Fitch sees the threat of nationalisation as “remote”, it states that the debate has upset investor confidence and warns that steps to nationalise mining assets could have “immediate and negative consequences” for the country’s rating.

Africa & the world

INTERNET GROWTH STRONG IN AFRICA – Internet use in Africa has seen unprecedented growth over the last decade, coming in at 2 000%, well over the global average of 480%, owing largely to significant information technology (IT) developments in Africa in recent years, reports market research company Frost & Sullivan information and communication technology (ICT) business unit leader for Africa Birgitta Cederstrom. This is despite Internet penetration on the African continent being relatively low compared to the developed world, with an estimated 120-million users. Cederstrom says that the more mature markets in Africa, such as South Africa, Ghana, Nigeria and Egypt, are experiencing the most growth. “With the new undersea cables and terrestrial fibre roll-out, as well as the satellite influx across Africa, we expect to see close to double-digits in terms of growth in the more mature markets over the next two to three years,” she adds. She attributes the growth to IT infrastructure developments, such as cable systems in East Africa that have boosted the region’s Internet use. Undersea fibre-optic cable network operator Seacom recently announced that in 2012, it will upgrade its East African submarine cable and increase capacity to meet rising demand from the African continent. Cederstrom says that, over the next two years, initiatives that will connect West Africa will rise in numbers, increasing the international bandwidth by triple digits. [ADD PIC OF AFRICA]

CHINA OUTBOUND DEALS TO GROW DOUBLE DIGITS IN 2012 – PwC – China’s overseas acquisitions, which reached a record in 2011, will continue double-digit growth this year as increasingly sophisticated Chinese buyers seek bargains amid the global downturn, says consultancy PricewaterhouseCoopers (PwC). China’s outbound investments have grown steadily in the aftermath of the 2007/8 global financial crisis, with most deals targeting resource-rich regions, but there has been a surge of Chinese interest since last year in Europe in the industrial and consumer sectors, a trend that PwC says would likely continue. “The eurozone debt crisis has definitely created opportunities for Chinese companies, giving them easier access to the European market,” Gabriel Wong, head of PwC China Corporate Finance told Reuters in an interview. “I believe it’s just a start.” Europe emerged as a key destination for Chinese acquisitions in 2011, with the number of deals in the region surging 76% to 44, many in the industrial and consumer sectors, according to Thomson Reuters data. Last year also saw record China outbound activity, with the number of deals up 10% at 207 with combined value rising 12% to $42.9-billion. Some high profile deals announced last year include China’s Investment Corp’s (CIC) $4.2-billion investment in French utility GDF Suez and Yanzhou Coal Mining Co Ltd’s $2.05-billion bid for Australia’s Gloucester Coal.

Source:http://www.engineeringnews.co.za/article/a-review-of-real-economic-developments-across-sa-africa-and-the-world-2012-01-27