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The Democratic Alliance (DA) warmly welcomes the announcement by Trade and Industry Minister Rob Davies that government intends upgrading our Industrial Development Zones (IDZs) into Special Economic Zones (SEZs).

This represents a significant victory for robust and progressive opposition politics in South Africa because the DA has for years been calling for a complete overhaul of our ineffectual IDZs. We have long maintained that boosting the incentives to turn our IDZs into super-charged SEZs will help us become more competitive globally – especially important in the current slow growth environment.

It is also a victory for a system of government with strong provinces that compete economically. By pushing for the creation of an SEZ at Saldanha, the Western Cape Government has helped drive this key policy reform. This shows that the competition between provinces helps to drive innovation in economic policy.

We look forward to getting more detail on how the zones will be structured and how the SEZ Fund will be capitalised, but we welcome the commitment to flexibility in the design of specific incentives and regulations for each zone.

In our view, such zones should not be subject to the historically strict geographical requirement; why not specify a city block, a building, or even the floor of a building, as a SEZ?

They should also come with stronger tax incentives and better development loans than those in the current IDZ programme. Crucially, they also need to tackle the sacred cow of labour law reform to help make it cheaper and easier for smaller companies to employ more workers.