Page 76 - Estimates of Public Entities Revenue & Expenditure 2023

PROVINCE OF THE EASTERN CAPE ESTIMATES OF PUBLIC ENTITIES REVENUE AND EXPENDITURE 2023/24

7.2 Key Challenges

ELIDZ Investment Promotion efforts are challenged by various factors including the following:

• Limitations around port depth impacts the viability of direct calls to the East London Port by new
age vessels which require a much deeper draught of at least 14 meters. This will continue to inhibit
ELIDZ capability to leverage its property asset and attract certain strategically targeted industries.

• Funding for feasibility study and infrastructure development to provide a test bed for autonomous
automotive vehicles.
• Lack of funding for the establishment of Factory Flats to accommodate SMME’s who seek smaller

premises from which to operate/ manufacture with the intention to scale up gradually.
• The lack of available industrial rolling stock for manufacturers who require space within a shorter
time frame. The SEZ fund does not finance speculative top structures to meet this demand.

• The US dollar is appreciating rendering imports from other countries less affordable but exports
more lucrative.

• Run-away electricity price escalation and unreliable supply in SA are making land-based
aquaculture and geoprocessing tough.
• Current economic climate and declining investor confidence.

• The effects of COVID 19 that have caused many firms to downgrade and some to halt operations.
• Gaps in the black industrialist program that are causing some of the beneficiaries not to operate

optimally.
• Inability for renewable energy generators to swiftly secure power purchase agreements for their
renewable energy and this has affected the rate of graduation of these investors through the

ELIDZ’s investor pipeline.
• Reduced appetite from Development Finance Institutions to finance investments in the aquaculture

sector – this has affected the ability of investors in the ELIDZ’s pipeline to secure financial closure;
• Uncertainty in the availability of SEZ funding due to increasing number SEZs set up in the country;
and

• Unreliable power supply that is now affecting investors in the zone.
• Shortage of semi-conductors globally causing many OEMs to reduce production. This includes

MBSA that is now running one shift instead of the three it had planned at the start of the new
model-W206.

8. 2023/24 Performance Outlook

The following will be the focus areas for ELIDZ over the 2023 MTEF:

• Continue intensifying marketing and selling efforts of the ELIDZ as a suitable investment
destination to targeted investors through direct marketing.

• ELIDZ focus will be on investment retention efforts geared towards the current portfolio of
operational investors. In addition, improved local value chain integration into global value chains
to expand market footprint for local industrialists who are able to penetrate export markets.

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