Zimbabwe turns to Special Economic Zones (SEZs) for economic growth

Zimbabwe, dogged by severe economic challenges, is aiming at establishing special economic zones (SEZs) as a tool to attract foreign direct investment and boost economic growth, senior cabinet ministers revealed. Simon Khaya Moyo told the audience at a workshop that the country was seeking to use SEZ as a plan to promote economic growth and re-position the country as one of the strongest economies in the southern Africa. A special economic zone (SEZ) is a geographical region that is designed to export goods and provide employment. SEZs may be exempt from laws regarding taxes, quotas, Foreign Direct Investment (FDI)-bans, labour laws and other restrictive laws in order to make the goods manufactured in the SEZ at a globally competitive price. The category SEZ includes free trade zones (FTZ), export processing Zones (EPZ), free Zones (FZ) or free economic zones (FEZ), industrial parks or industrial estates (IE), free ports, and urban enterprise zones. The operating definition of an economic zone is determined by each country's trade and customs administration.

 Establishment of SEZs is one of the key policies enshrined in the country’s current five year economic blueprint, Zimasset, running till 2018. He said that SEZ will increase the economy’s capacity to produce and export goods and services, attracting investment inflows from both domestic and foreign sources, creating employment and poverty reduction and strengthening the country’s industrial bases. Zimbabwe once created export processing zones in the late 1990s to the early 2000s that offered special incentives to investors who wanted to produce for exports. The zones however, got affected by a decade of economic crisis up to 2008, resulting in them folding up. Moyo added that Zimbabwe wanted to use the SEZs to respond to the current economic challenges in the country and as a tool to penetrate global markets. Once successfully implemented, Moyo said the SEZs would bring enormous economic benefits to the country that include improved revenue inflows to the government, accelerated information and industrial development, skills transfer into the economy, increased beneficiation and growth in industrial production and employment creation.  

Speaking at the same occasion, Finance Minister, Patrick Chinamasa said Zimbabwe needed to learn from other countries that had successfully industrialised their economies. He pointed out that Zimbabwe needed to transform itself from being a net exporter of unprocessed goods into a net exporter of beneficiated goods and noted that SEZs were one tool that the country could use to accelerate industrial development. He noted the success of SEZs in countries like China and India. “We must understand the policies of those who created that prosperity and for us in Zimbabwe this means taking conscious and deliberate steps to steer way from raw material activities into manufacturing, value addition and beneficiation,” he said. He added that for Zimbabwe to prosper economically, the country has to study and understand how other nations have managed to develop. He said that the economic paths taken by countries such as the United States, Europe and China were good examples which Zimbabwe needed to take a cue from.