Special Economic Zones and Socio-Economic Development in South Africa: A Structured Review of Employment Creation and Industrial Policy

Abstract

The Special Economic Zones (SEZs) have become an important component of South Africa’s industrial policy aimed at stimulating investment, industrialisation, employment creation, and regional economic development. Despite their strategic importance, concerns remain regarding the extent to which SEZs contribute meaningfully to addressing persistent socio-economic challenges such as unemployment, inequality, and uneven regional growth. This study evaluates the impact of SEZs on employment creation and socio-economic development in South Africa while examining the institutional and structural factors influencing their performance. The study adopted a structured literature review approach based on secondary data obtained from peer-reviewed journal articles, policy reports, working papers, institutional publications, and statistical sources relating to SEZ development in South Africa and Southern Africa. The analysis was guided by Agglomeration Theory, Growth Pole Theory, and Developmental State Theory and applied thematic analysis to synthesise evidence across the reviewed literature. The findings indicate that SEZs have contributed to investment attraction, industrial expansion, and employment creation, particularly within strategically located zones such as Coega and Dube TradePort. However, employment and socio-economic outcomes remain uneven across regions due to differences in infrastructure quality, governance capacity, institutional coordination, and sectoral composition. The study further found that weak local economic linkages and reliance on capital-intensive industries constrain broader developmental spillovers. The study highlights the need for stronger governance, labour-intensive industrial targeting, skills development, and local supplier integration to enhance the inclusive developmental impact of SEZs in South Africa.