MESSAGEThe Free State
MESSAGEThe Free State Provinceis open to investmentsThe Department of Economic, Small Business Development, Tourism andEnvironmental Affairs welcomes investors to the province in the heart of South Africa.Hydroelectric power is just one of the renewable energy options that offer great opportunities.The Free State Province covers 129 825 squarekilometres, which is about 10.6% of theSouth African land mass. Free State’spopulation is 2.99-million, or 4.9% of thetotal population of South Africa. The populationis projected to grow at an average annual rate of0.7% from 2.99-million in 2022 to 3.09-millionin 2027.The Free State’s economy grew at an averageannual rate of 0.38% over 10 years from R191-billionin 2013 to R342-billion in 2023. The provincecontributed 4.87% to the South Africa GDP ofR7.02-trillion in 2023 and achieved an annualgrowth rate of 0.15% in the same year, which islower than the country’s growth rate of 0.70%. It isour considered view that the province must aimto grow the Gross Domestic Product (GDP) at anaverage annual rate of 1.58%, or higher, from 2025to 2028.For the year 2023, Mangaung MetropolitanMunicipality contributed the largest shareof 39.35% (R135-billion) and the lowestcontributor was the Xhariep DistrictMunicipality with 3% or (R10.5-billion). FezileDabi, being the second-largest, contributed25.4% (R83.8-billion), Thabo Mofutsanyana wasthird with 19% (R64.2-billion) and Lejweleputswa’scontribution was 14% (R49-billion).The provincial share of tourist arrivals decreasedfrom 10.5% in Q1 2024 to 7.1% in Q3 2024. Total TouristForeign Direct Spend (TTFDS) for Q3 2024 amountsto R0.28-billion as compared to R0.56-billion inQ1 2024. Over a 10-year period, the number oftrips by tourists visiting the Free State from otherregions in South Africa has increased at an averageannual rate of 1.14% from 2013 (1.91-million) to2023 (2.14-million). The number of internationaltourists decreased at an average annual growthrate of -0.07% and they constitute 20% of the totalnumber of trips.FREE STATE BUSINESS 20254PHOTO: Red Rocket
Exports from the province in 2023amounted to R11.3-billion and imports toR17.2-billion. Therefore, the total trade within theFree State is about 0.72% of total national trade.The province had a negative trade balance in 2023to the value of R5.85-billion. Specific geographicalareas for Free State’s exports and imports for 2023include Africa, Asia, Central America, Europe,the Middle East and North America. Exports offood, beverages and tobacco products to avalue of R3.69-billion dominated in 2023,followed by transport equipment (R2.17-billion)and metal products, machinery and householdappliances (R1.38-billion).Our primary sectors such as agriculture andmining recorded an increase in 2023.Agriculture and hunting recorded an increaseof R238.39-million in exports in 2023 whencompared to 2022. Mining of metal ores recordeda significant increase in exports worth R173-millionfor the same period. Most of the subsectorsof manufacturing recorded increases.Strategic location is ideal for trade and investmentThe Free State Province lies in the heart ofSouth Africa between the Vaal River in thenorth and the Orange River in the south. Theprovince is a gateway to the Kingdom ofLesotho which is surrounded by the SouthAfrican provinces of Free State, KwaZulu-Nataland Eastern Cape.The Free State is an ideal investment destinationas it is blessed with abundant natural resources.The province is ideally located at the confluenceof major logistics arterials and corridors such asthe R30, N1, N6, N5, N8 and N3. This makes themovement of goods very economically viable.Various infrastructure renovations and upgradingprojects are underway and this will contributeto an improved investment climate.The province is also an ideal destination forrenewable energy projects, including solar PV,hydro and wind projects. In addition, the gridavailability in the province presents an opportunityfor investments in independent power producer(IPP) projects in the province. The Free State isalso referred to as the breadbasket of the countryas agriculture is a significant contributor toits GDP.The giant SASKO Mill in Bethlehem takes advantageof the province’s abundant agricultural resources.INVESTMENT OPPORTUNITIESRenewable energyThe province is an ideal destination for renewableenergy projects of all kinds. Good grid availabilityand enthusiastic investment facilitation presentparticularly attractive opportunities for investments inthe province.Mining and gas extractionAlthough the mining sector is no longer dominant,coal, diamond and gold mining still make up animportant part of the Free State economy. Naturalgas was first discovered in a Virginia gold minein 1947, and the mine has been producingcombustible gas ever since. A massive amountof helium is produced as a byproduct ofnatural gas production. The province haspotential mining and beneficiation opportunitiesin commodities such as gold, diamonds, coaland rare earth elements. Sand and aggregatemining in the Free State province have becomevery attractive as part of supporting theconstruction ecosystem.Special Economic Zones and Industrial ParksThe Maluti-A-Phofung Special Economic Zone(MAPSEZ) is strategically located on the key N5and N3 logistics corridors which makes it an idealinvestment destination. The MAPSEZ aims toattract R2-billion in new investments. Sectorsprioritised in the zone are logistics, agroprocessing,ICT, automotive, pharmaceuticalsand manufacturing. The 1 000ha estate is dividedinto four zones: agro-processing, light industrial,5 FREE STATE BUSINESS 2025
