The state-owned entity said last week the decision by UAL to withdraw from the Saldanha oil and gas service base project would have serious implications for economic growth and job creation in the region.

The project falls within the broader Department of Trade and Industry IDZ framework which recently came under review. Trade and Industry Minister Rob Davis last month gazetted the draft Special Economic Zones (SEZs) Bill for public comment.

"The bill is a welcome move as the government has acknowledged there has been a deficiency with the current Industrial Development Zones framework," says Tatenda Zingoni, analyst at Frost & Sullivan.

The SEZs approach promises to be an effective path for the country to take with regard to regional economic development, Zingoni says.

IDZs were created with an export orientated approach to economic development whereby investors will manufacture goods for export from these zones. SEZs on the other hand can be used for regional development purposes with firms not having to be necessarily geared toward exports. Rather than creating an IDZ and then looking for investors, the SEZs will be created on the basis of identified opportunities for a particular economic activity.

"As an example, there are already talks by some participants in the platinum industry for the development of a platinum SEZ which would be focused on the beneficiation of platinum. Such a plan aligns with the New Growth Path's drive for mineral beneficiation and will fall in line with the SEZ framework.

"Previously, the success of the IDZs was linked to the presence of an anchor tenant rather than having a large portfolio of investors from the onset. SEZs will bring a cluster approach to regional economic development where companies locate in an area knowing they can benefit from synergies of being close to firms operating in the same industry," Zingoni says.