Making SEZs work in Zimbabwe
Zimbabwe adopted the Zimbabwe Investment Development Agency (ZIDA), which amalgamated the SEZ Act, Zimbabwe Investment Authority (ZIA) and joint venture Act.
ZIDA Act provides a One Stop Investment Services Centre for the promotion, entry, protection and facilitation of investment. ZIDA comes against the background of complains in processing of licences and approval of investments especially by foreigners.
The act will see key institutions being brought under one roof which include ZIMRA, Immigration and other Government departments providing essential services in the promotion and facilitation of trade and investments Zimbabwe has in the past promoted trade and investments through the establishment of Export Processing Zones and the recently dissolved Zimbabwe Special Economic Zones Authority (ZIMSEZA), with ZIA playing a key role in processing of investments licences under both regimes.
With the current adopted policy, ZIDA will oversee the establishment and management of SEZs as an export promotion incentive and for luring of Foreign Direct investments (FDIs).
Various areas have been delineated and set aside for establishment of these SEZs and have been affected by the Covid-19 pandemic derailing the major face uplifts of these areas.
A SEZ is a trade capacity development tool, with the goal to promote rapid economic growth by using tax and business incentives to attract foreign investment and technology. Ghana, Nigeria, Ethiopia, Tanzania, Zambia, Mali, Botswana and South Africa are among African countries who have adopted the policy with successful stories.
A good example has been the leather industry in Ethiopia, which has managed to contribute to both employment creation and foreign currency generation for the country.
Some key issues, however, need to be addressed and these include challenges related to acceptable formats, legal and institutional framework, virtual and physical infrastructure for the support of SEZs among others. There are concerns over the success of SEZs as a trade policy as it has been noted that some African counties failed to reap the benefits of the policy and resulted in them abandoning it.
The question is, how will ZIDA make SEZs work in Zimbabwe after the failure of EPZs and ZIMSEZA era? The answer lies in ZIDA adopting a different and consistent approach to implementation of the policy.
A stronger stakeholder ownership, there is need for involvement of all stakeholders to come up with a sound legal, regulatory framework, and effective institutions.
A better business environment inside the zone, including efficient services, such as one-stop shop and good infrastructure. These should include the banks, trade support institutions like ZIMTRADE, logistics services and many more
Certain-level flexibility and autonomy at local level: there is need to decentralise ZIDA to district level to cut off unnecessary bureaucracy and promote transparency and effectiveness
Technology transfer and skills training. This is crucial for the zones to acquire sufficient manpower and make their products competitive. Kanyemba and Binga SEZs should benefit the locals and empower them with skills so that they contribute to value chain and this will contribute to sustainable development and war against poverty.
Better linkages with local economy. The zones need to build on local comparative advantages and have local suppliers as part of their value chains. Zimbabwe enjoys comparative advantage in various sectors ranging from agriculture to mining. Bulawayo should have zones specialising in leather and hides and linked to Bata in Gweru. This will promote cattle ranching and other new sources of raw materials.
Zimbabwe will benefit from SEZs and its time for full implementation under clear policies and procedures to avoid the errors experienced in the past with EPZs and other trade policies. Certain level of competition among SEZs can be a catalyst and policies should be made for that specifically.-herald.c.zw
