The Sunday Mail
Special economic zones are an innovative way being adopted by countries worldwide as a means to advance industrialisation and consequent economic growth.
Zimbabwe will soon join other African nations in establishing SEZs as part of Government’s agenda to revitalise the country’s industrial base, stimulate employment and bolster export receipts.
The African Union’s Agenda 2063 places rapid industrialisation as a means to fight poverty and underdevelopment at the centre of its programme.
Many African nations have in recent times experimented with SEZs, albeit with varying degrees of success.
Studies have shown that establishing SEZs requires a high level leadership and commitment.
It requires thorough planning and a strong legal and tax framework that attracts investors and protects their investments while equally benefitting the host country.
An SEZ, by definition, is a geographically demarcated area which functions with different administrative, regulatory and fiscal regimes to the rest of the country.
The different rules applied in these zones usually concern investment conditions, taxation and international trade regulations.
Ethiopia is one of the few African countries that have successfully set up SEZs.
Hawassa Industrial Park is a fledgling industrial zone established two years ago by the Ethiopian government to mainly cater for the textile industry.
At present 18 firms are leasing 52 units at the Chinese-built industrial park, including PVH, the US owner of brands such as Calvin Klein and Tommy Hilfiger.
The East African country projects to generate US$1 billion annually once the park starts operating at its full potential.
Other African countries like Kenya and Nigeria have had significant success from SEZs.
In Nigeria, the Lagos Free Trade Zone was established in 2002 over an area of 800 hectares. It focuses on food processing, textiles, paper production, petrochemicals and port handling.
While only two companies have invested in the SEZ, they have invested over US$500 million creating 250 jobs.
A study by the United Nations Development Programme in 2015 titled “If Africa builds nests, will the birds come?” offers lessons on SEZ success stories.
It offers recommendations on how African governments can advance the development of SEZs.
The report recommends:
Ensuring high-level political commitment and support for effective inter-ministerial collaboration;
Integrating SEZ programmes into national development strategies and plans;
Supporting all industries that have a comparative advantage through SEZ development;
Ensuring sufficient funding for infrastructure development within, and availability of good infrastructure outside, the SEZ prior to the SEZ approval;
Providing incentives for the creation of joint ventures between foreign SEZ companies and local companies;
Responding to SEZ labour requirements by aligning curricula of universities and technical vocational education and training institutions;
Setting high environmental standards in line with the united nations industrial development organisation’s guidelines for Green Industry Parks and put a system in place to ensure their enforcement; and
Establishing low minimum SEZ investment thresholds for established local companies.
These are critical lessons for Zimbabwe’s Government if it is to successfully see through the development of SEZs.
The UNDP report also offers advice to developers and managers of SEZs. It says:
Prioritise the identification of a strategic geographical location of the SEZ;
Employ managers with international work experience, cross-cultural competence and excellent communication skills;
Promote linkages between SEZ companies and the local labour market and local companies; and
Conduct local, national and international marketing campaigns and ensure the availability of key information on the SEZ in English and the local language.
