The Sunday News
Dumisani Nsingo ,Senior Business Reporter
THE Government has constituted a board appointed to spearhead the implementation of Special Economic Zones (SEZs) as it moves to lure investors and stimulate foreign investment to boost economic growth.
Macro-Economic Planning and Investment Promotion Minister Dr Obert Mpofu said the SEZs board would be announced this week although he did not reveal the members of the board.
“The SEZs board will be announced very soon, it’s actually going to be announced in a week or so. There are a lot of procedures which have to be done when appointing a board, for instance there have to be consultations with relevant stakeholders including the Office of the President and that process has been completed and the board will be announced soon,” said Dr Mpofu.
SEZs are still to be implemented despite the Act being gazetted into law last year and the recent gazetting of Statutory Instrument (SI) 59 of 2017. SI 59 of 2017 was gazetted last month and allows rebates on raw materials, intermediate products and machinery imported for use in SEZs.
However, since there are no active SEZs, SI 59 of 2017 remains an ineffective piece of legislation. SEZs, which are geographical areas governed by one oversight management body that offers special trade incentives to firms that establish themselves in the designated areas, are expected to increase the economy’s capacity to produce and export goods and services, attracting investment inflows from both domestic and foreign sources, creating employment and reducing poverty and strengthening the country’s industrial base.
However, captains of industry are of the view that the delay by the Government to appoint a board to spearhead the implementation of SEZs was frustrating the much anticipated increase in Foreign Direct Investment (FDI) into the country.
Confederation of Zimbabwe Industries president Mr Sifelani Jabangwe said there was a need to expedite the setting up of the board so as to ensure it lays down the foundation for the implementation of SEZs.
“As a lobby body we would like to urge the setting up of the board to be expedited so that the SEZs are implemented. The whole idea of lobbying for the SEZs is to ensure the turnaround of the economy through attracting investment,” said Mr Jabangwe.
“The longer we stay without the implementation of SEZs will mean there won’t be benefits accrued from them and coming in the back of good rains and a good harvest spearheaded by the Command Agricultural Programme a complimentary agro-related investment will have been appreciated,” said Mr Jabangwe.
Zimbabwe National Chamber of Commerce president Mr Davis Norupiri said the delay in coming up with the board and subsequently the setting up of SEZs was impacting negatively on investors’ confidence.
“We understand that Government has a lot of things to deal with but the delay in implementing SEZs is also delaying the flow of investment. This has a negative impact on the attitude of investors in the near future…everything is being delayed and as such we tend to lose business,” said Mr Norupiri.
He however, expressed satisfaction with the areas that were identified for SEZs stating that they were “manageable”.
Bulawayo, Beitbridge, Mutare, Norton and Victoria Falls are set to be declared SEZs.
CZI past president Mr Busisa Moyo said the delay in implementing SEZs had culminated in Zimbabwe lagging behind other countries in the region in terms of attracting FDI.
“We find ourselves a bit slowed down because countries like Zambia are coming up. Zambia is attracting more FDI than we are and this poses a challenge. We would like to be the crack of the FDI attracting countries in southern Africa and SEZs are key attractions and key feature in attracting FDI. It’s very important that we don’t miss out because these ‘dollars’ (investments) don’t come back, when they go to Zambia you won’t see them, you will have to wait for the next round of investors to come again next year and so on,” said Mr Moyo.
Zimbabwe has been finding it difficult to attract offshore funding due to perceived country risk, poor rankings on the ease of doing business and structural issues in the economy. This has resulted in the country lagging behind regional peers in attracting FDI.
The Zimbabwe Investment Authority actually saw a drop of over $1 billion in projects approved in 2016 from a high of $3 billion recorded in the previous year. FDI is projected to be even lower by the end of this year.
“I think it’s imperative that we be proactive and treat the matter with urgency, having waited this long. It’s a good programme (SEZs) but we don’t want it to be overtaken (by events) and the momentum that has been brought up to be lost. By delaying its implementation we are delaying employment, local production, competitiveness. There are a lot of things that we are missing out on as a result of us not hitting the road running,” said Mr Moyo.
He, however, concurred with Mr Norupiri on the areas that were identified for the setting up of SEZs.
“I think the areas are adequate for a start but we obviously need to broaden these areas as people make reservations and once the SEZs authority has been set up. This will be easier to add and for people to have a body they can approach and make representations to say this area should be a SEZ for this (reason) and assessments can be made,” said Mr Moyo.
SEZs have become the new attraction to foreign investors, with at least 29 countries having already adopted them. Of that number, Africa is represented by six countries that have adopted the SEZ concept, namely Democratic Republic of Congo, Egypt, Ethiopia, Nigeria, Mauritius and Zambia.
SEZs are not an entirely new concept in Zimbabwe as the Government once created export processing zones in the early 1990s to the early 2000s that offered special incentives to investors who wanted to produce for export.
However, the zones got affected by a decade of economic crisis up to 2008, resulting in them folding.
