New approach for SEZs

28 Jan, 2018 - 00:01 0 Views
New approach for SEZs

The Sunday Mail

Dr Gideon Gono
Now those desirables are a function of serious coordination among all the parties, hence there is the need for a one-stop shop.
The one-stop shop has been given birth by the creation of this Authority.
But does it have sufficient authority to move everybody else into line since the SEZ is the only point of contact for the investor?

The world over, the Special Economic Zones approach to either economic turnarounds or growth, is the in-thing.

It has been proved that where countries have adopted them as their national strategy, the results have been positive.

To that end, we as the Special Economic Zones board are thrilled and encouraged by the awareness of His Excellency, President ED Mnangagwa’s roadmap and the importance he is attaching to SEZs.

I say this against a background of his inaugural speech on the 24th of November. He included the statement on SEZs, saying the new dispensation was going to accelerate the establishment of SEZs.

In his State of the Nation Address, he again emphasised the critical role that the SEZs are going to play in the country.

The President has made pronouncements about the importance of SEZs at virtually every important forum he has been.

I have previously indicated that every inch of Zimbabwe is a potential SEZ and that was some kind of departure from the then three geographical locations that Government had identified.

Those three areas as we know were Sunway City, Bulawayo and Victoria Falls; now while that was to be applauded, that approach like I said earlier was a little bit narrower than should actually be the case.

It was a good start but we must know that this is a multi-sectoral economy which is grounded on agriculture, mining, tourism, manufacturing, financial sector and infrastructure.

You cannot, for instance, restrict the designation of a special economic zone required by a mining investor and then you say to the investor because you are not located at Sunway City or in Bulawayo or Victoria Falls therefore we deny you a license.

You cannot say to the people of Manicaland, for instance, that well it is all very well that you have prepared your plans about diamond cutting and polishing but because you don’t belong to Sunway City, Bulawayo or Victoria Falls then we will not give you a license.

You cannot say to an investor who seeks to rehabilitate or invest in the rehabilitation of Zisco and then say we can’t attend to you because you are not located at the three centres.

That is what was driving our pronouncements that every inch of Zimbabwe is our play-ground and I am excited and encouraged that the President has repeated this practical approach.

We will establish and give consideration to the establishment of SEZs based on the following criteria, it might be one or a combination of them all.

First and foremost, we would prefer the applicants to be located close to the source of raw materials as much as possible.

In other words, we dream of a day when we are going to see the cotton and textile hub or corridor being developed around Gokwe, Sanyati, Muzarabani and areas where cotton is mainly produced so that employment opportunities are granted to the locals.

This is as opposed to a situation where you then take the cotton in its raw form and try and beneficiate it in Mutare and take diamonds from Mutare and beneficiate them in Bulawayo.

Secondly, if it is not close to the raw materials we want it to be close to the markets.

The ease with which a manufacturer moves his stuff from factory to the market is very important.

You do not want a situation where you are for instance producing in Mutoko, but the market is in Victoria Falls.

There is also a new approach that we want to bring into the operation of Special Economic Zones.

Ordinarily, Special Economic Zones come in the form of new development, that is, you get a piece of virgin land, you do your master plan and then you create factories, linkages and build.

In our situation, we want to think outside the box.

We want to recognise the fact that Zimbabwe has serious investment in the form of factories that are not operating at 100 percent capacity.

The majority of them have been closed and are being turned into other uses of a social nature instead of catering for what they were established for.

We have a lot of disused factories in virtually every part of Zimbabwe, our approach that we wish to see is one that takes stock of those idle infrastructure.

In other words, we want re-look at them with a view to modernising them or altering their structures here and there.

We want to bring that practicality into our thinking and include in our strategy these existing factories whose owners put in a lot of effort and planning to then bring them up and pair them with new investors.

The take off period, the gestation period of the investment is going to be shorter in terms of getting the end product than if we start afresh.

This approach is in line with what the President was saying that SEZs are not just for foreigners, but locals are also invited to participate.

All industries qualify to become SEZ, provided their benefits are obvious to the nation.

The benefits we expect are exports, employment creation, import substation and bringing in new technology to increase efficiency.

Technology in itself is FDI in the sense that when you bring in new technology you are bringing in efficiency which will make you competitive and reliable.

How SEZs succeed

Many people would want to know what are the success factors in terms of implementing a successful SEZ structure.

No SEZ strategy will succeed if there is no political commitment at the highest level.

That commitment is prerequisite.

In our case we tick that box.

His Excellency has visited several SEZs, so we have no problem in that area.

Once there is political support, there ought to be strong institutional support.

In other words, a good example will be, the President is going to Davos, he is going to deliver miracles there by way of luring investors.

The key to the success is measured in the form of employment creation, import substitution and all the other variables I have indicated earlier.

But if the institutional arrangements are not adequate, not resourced and players not working together then the interest that is generated out there will come to naught.

In other words, what is the reception towards the investor at the point of entry?

If they come and various Ministries are speaking different languages and giving different signals to what the Special Economic Zones Authority is telling, it will not result in an investment.

If the investor comes and says “I’m ready to invest, but I need power and water,” and then the power sector says we can only give you power next year then we would not be speaking the same language.

So, we need to be speaking the same language, reading from the same page and singing from the same hymn book.

Now those desirables are a function of serious coordination among all the parties, hence there is the need for a one-stop shop.

The one-stop shop has been given birth by the creation of this Authority.

But does it have sufficient authority to move everybody else into line since the SEZ is the only point of contact for the investor?

Are they sufficiently resourced to be able to deliver in terms of resources and authority?

Is everyone not going to be petty about their own areas and say no you can go and hang, this is my area?

Now there is therefore the need to realign different laws to be supportive of an agenda that brings FDI, giving the same message and the same commitment.

There is need for culture change that ensures the institutions talks to one another and speak the same language.

In other words they become an oiled machinery.

Chief executive appointment

Right now we need a chief executive for SEZs.

We have been established since June 2017 but we don’t have a decision in respect of a CEO who should set up the secretariat and run day to day activities of the authority.

I am not an executive chairman, and I should not be getting involved in day to day operations, we did our part as the board – interviewed candidates called for applicants and made our recommendations on the 5th of October, 2017. To date I don’t have approval of a chief executive.

 

Dr Gideon Gono is the board chairperson of the Zimbabwe Special Economic Zones Authority. He was speaking to our reporters, Lincoln Towindo and Debra Matabvu.

 

Share This:

Survey


We value your opinion! Take a moment to complete our survey

This will close in 20 seconds