Home » General » EXPERTS CAUTION HARARE ON SETTING UP SEZS TO ATTRACT INVESTMENTS

HARARE, April 17 — The Zimbabwe government should tread with caution as it sets about establishing special economic zones (SEZs) as a way of stimulating investment, experts warned on Wednesday.

Under its new five-year economic policy — the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim Asset)– the government has identified establishment of SEZs as a strategy to boost economic growth and development.

SEZs are designated geographical areas which operate under different economic rules from the rest of the economy.

Experts from Mauritius, the World Bank and the African Development Bank (AfDB) who addressed a two-day workshop on SEZs attended by Cabinet Ministers attended and senior officials here this week, warned the government to avoid pitfalls which had resulted in most SEZs established in Africa failing to achieve their set objectives.

Political and economic stability, clear objectives and roles for various stakeholders, the will to reform and private sector participation were identified as the most crucial ingredients for the success of the economic zones.

An official from the International Finance Corporation, a World Bank affiliate, Marcus Scheuermaier, said it was critical to send a signal to investors that the country was ready to reform.

“It is very important to have a dedicated reform unit for Zimbabwe,” he said, adding that Mauritius and Rwanda had successful established such units to provide support to ease doing business in the zones.

Scheuermaier said the regions, which could be in the form of free trade zones, industrial parks and free zones, could only be used as starting points for national development.

World Bank official Douglas Zeng said the SEZs were not a panacea to development and that most Africa nations which used this approach had seen the zones failing to attain set goals. “Do not be too ambitious jumping into something you do not know,” Zeng cautioned.

He said key challenges faced in most African SEZs had to do with infrastructure, zone management and continuity in instances where governments had changed.

Former Mauritian deputy prime minister Dr Rama Sithanen said besides easing ways of doing business, African countries must also learn to reduce the cost of doing business.

Mauritius is one of the few shining examples of African countries which had successfully implemented SEZs.
“If a system is too complicated it is not going to work,” he said. “You need a one-stop shop for investors, not a one more stop approach.”

Sithanen said Mauritius had perfected its systems over time but struggled to successfully manage the SEZs because of wrong approaches at the initial stages.

Zimbabwe’s Finance and Economic Development Minister, Patrick Chinamasa, said the economic regions were meant to improve Zimbabwe’s investment climate. “We are taking deliberate steps into value addition, manufacturing and beneficiation,” he said.

Senior Minister Simon Khaya Moyo said Zimbabwe had the potential to become a regional hub if the country comes up with the right economic formula. “As we were our own political liberators, we can be our own economic liberators,” he said.

Industry Minister Mike Bimha said the economic regions would play a pivotal role in attracting foreign direct investment, enhancing competitiveness of local goods and creating employment. The government has identified Zimbabwe’s second largest city, Bulawayo, as the site for the first SEZs to be established in the country.

SOURCE: NEW ZIANA

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