HARARE, February 4 (The Source) – Special economic zones (SEZs) could boost Zimbabwe’s sluggish economic growth by increasing foreign investment but need to be developed diligently, a leading local think tank has said.
Zimbabwe has touted SEZs as a key pillar in attracting scarce foreign direct investment and creating employment in an economy where independent analysts estimate that between 80 percent and 95 percent of the adult population has no formal jobs. The government has already approved the SEZ Bill, prioritising agriculture, tourism, mining, services and manufacturing sectors.
Victoria Falls, Harare’s Sunway City, Bulawayo, Mutare and Lupane have been earmarked for the SEZ development.
“A key lesson drawn from international experience is that SEZs are, not a panacea, to solving all economic challenges. Instead, they catalyse deeper economic reforms and become a major engine for national development through backward and forward linkages with the rest of the domestic economy,” said Zeparu in its latest economic barometer released on Thursday.
It said Zimbabwe should, among others, develop a sound legal and regulatory framework and effective institutions which are critical and need to be autonomous and be adequately funded.
The integration of the zone master plans into regional urban development plans would also enhance economic and social benefits, it added.
“In this regard, they need to be complemented by the implementation of other policy initiatives and strategies outlined in the country’s development programme Zimasset. In the Zimbabwean context, initiatives to reduce the debt burden, expanding and modernising infrastructure; improvement in public service delivery; conducive doing business environment and improvements in productivity will all facilitate the success of the proposed SEZs,” said Zeparu.
“Furthermore, deeper research and dialogue is still required to inform policy decisions and implementation strategies to ensure SEZs have a transformational impact in Zimbabwe.”
Zimbabwe has previously set up Economic Processing Zones (EPZs), from 1996 to 2006, which were mainly export oriented and required to export at least 80 percent of their production.
The EPZ programme resulted in 205 companies being established, generating an estimated $172 million worth of investment and creating 32,512 jobs and a cumulative $1,15 billion in export earnings.
Some of the companies are still in operation despite the collapse of the scheme when government merged the Export Processing Zone authority and the Zimbabwe Investment Centre to form the Zimbabwe Investment Authority (ZIA).
The success of the EPZs, however limited, means the setting up of a one-stop investment shop and strong government buy-in enhance establishment and performance of SEZs, Zeparu said.