Incentive schemes to be used to attract investors

Incentive schemes will play a crucial role in the Gauteng provincial government’s bid to attract foreign direct investment (FDI) to the region.

This was announced yesterday by Premier David Makhura as part of the Gauteng City Region International Strategy to boost exports from the province, attract FDI, increase tourism and create employment. Makhura said Gauteng had abundant infrastructure, land and talent the province wanted to sell to investors. He said it was looking at offering potential investors incentive packages.

“We are looking at some rebates and various options to attract investors, including rental holidays for the first six months if you are using one of our buildings,” Makhura said.

“Of course, the rates rebate issue depends on the capacity of the municipality. “We have to face the facts, municipalities do not have the same capacities; some are small and others, like our metros, have better resources.” Incentives have become “a very important factor” in attracting FDI.

“We have to ensure incentives are used effectively,” Makhura said. “We offer them land, we offer them a place to operate in and we say: ‘You don’t have to pay rent for six months.’”

Makhura said the Brexit situation could have positive spin-offs for South Africa, especially Gauteng. Since the UK voted to exit the European Union, many British investors have shown interest in the local market.

“Everyone is watching to see what this will mean for trade. There is a big appetite by British investors in South Africa since Brexit happened.” The premier was concerned about the possibility of a ratings downgrade of the country’s bonds. “It will be a great disaster for us, as Gauteng, if South Africa is downgraded.”

Makhura said there was a need to do more to increase trade with Africa, citing capital equipment as a big trade issue in countries like Zambia and Mozambique for their mining activities. Finance MEC Barbara Creecy, also a coordinator for the province’s international relations, said the weaker rand posed a problem, but had helped make South Africa attractive to foreign investors.

– ericn@citizen.co.za