The Democratic Alliance (DA) is concerned that the Mpumalanga Economic Growth Agency (MEGA) may have cost the province nearly 100 000 jobs due to financial instability and financial irregularities.
It has come to the DA’s attention that seven of the 11 potential investors of MEGA’s R4.1 billion SEZ project in the Nkomazi municipality are pulling out with their combined R1,07 billion. This means that the project could be on the verge of collapse as the other four potential investors had yet to commit the R813 000 000 to the SEZ project.
The DA will write to Minister of Trade and Industry, Rob Davies, who approved the licence for the establishment of the Nkomazi Special Economic Zone (SEZ), to investigate and to assist MEGA in trying to save the project which is set to contribute significantly to the economic and industrial development of the Nkomazi region and the province at large.
When MEGA introduced the SEZ project in 2019 it promised to attract R4.1 Billion in investments.
MEGA submitted a report to the Mpumalanga Legislature’s Finance and Economic Development portfolio committee which detailed the list of potential investors of the SEZ project for the 2019/2020 financial year. At least R3.2 billion was supposed to be from direct foreign investment.
According to MEGA, the SEZ project had a potential to create 81 765 jobs in the agriculture sector, 8 275 jobs in construction, and 9 505 in related industries (a total of 99 545 jobs). The project could also potentially contribute R97.6 billion to South Africa’s GDP.
The DA believes that potential investors are being scared off due to MEGA’s instability, and to make matter worse, the interim board was dissolved in June without concrete reason after serving just over a year. The previous board was dissolved in March last year.
MEGA struggled to meet its income generating targets and their revenue decreased from R196 521 112 in the 2017/18 financial year, to R190 767 871 in the 2018/19 financial year, and further reduced in the 2019/2020 financial year to R183 273 296.
The Agency is currently under investigation from the Auditor General for financial irregularities. Due to MEGA’s suspected financial irregularities and financial in-viability, the SEZ project may fail and the people of Nkomazi may lose much needed jobs.