Spe­cial Eco­nomic Zones iden­ti­fi­ca­tion work in progress

Sunday News (Zimbabwe) - - Business - Du­misani Nsingo Se­nior Busi­ness Re­porter

THE Spe­cial Eco­nomic Zones Author­ity (Seza) is yet to iden­tify ar­eas to be des­ig­nated as Spe­cial Eco­nomic Zones (SEZs) tar­geted to stim­u­late in­vest­ment flows from do­mes­tic and in­ter­na­tional mar­kets into strate­gic sec­tors of the econ­omy.

Seza board mem­ber Mr Bu­sisa Moyo said the author­ity was still to start the process of iden­ti­fy­ing ar­eas to be de­clared as SEZs as it was work­ing on set­ting up its ad­min­is­tra­tive struc­tures. He said this while ad­dress­ing busi­ness ex­ec­u­tives at a meet­ing or­gan­ised by the Zim­babwe Na­tional Cham­ber of Com­merce in Bu­l­awayo on Fri­day last week.

“The author­ity is the one that des­ig­nates and it came into be­ing only 90 days ago. It’s the one with pow­ers to des­ig­nate an area and say this is a SEZ. Peo­ple can ear­mark, sug­gest, di­rect and rec­om­mend, which is what has been done for Bu­l­awayo, Nor­ton and Vic­to­ria Falls. In terms of ac­tu­ally des­ig­nat­ing, be­cause des­ig­nat­ing means mark­ing out a ge­o­graph­i­cal area, that has not been done.

“So you can’t say we have des­ig­nated when we have not done that, and yet there was no Act to em­power peo­ple to do that. Now the author­ity can do that (des­ig­nat­ing) be­cause it has the power to do that but the author­ity is still work­ing out its ad­min­is­tra­tive struc­tures to then des­ig­nate in the proper sense as pro­mul­gated in the Act,” said Mr Moyo.

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 in May and al­lows re­bates on raw ma­te­ri­als, in­ter­me­di­ate prod­ucts and ma­chin­ery im­ported for use in SEZs.

Mr Moyo said the author­ity would start dis­tribut­ing ap­pli­ca­tion forms to com­pa­nies and con­sor­tiums that wish to op­er­ate in ar­eas that would have been iden­ti­fied as SEZs.

“Once we have clar­i­fied the struc­ture of the SEZ — the ad­min­is­tra­tive struc­ture, we will then have ap­pli­ca­tion forms that peo­ple should fill in and ap­ply. We are still work­ing on those (ap­pli­ca­tion forms) and de­sign­ing them,” he said.

Mr Moyo also said Seza has be­gun hunt­ing for a new chief ex­ec­u­tive of­fi­cer who will spear­head the coun­try’s quest for in­creased for­eign di­rect in­vest­ment through SEZs.

“We are in the mar­ket in search of a chief ex­ec­u­tive of­fi­cer. We are cur­rently re­ly­ing on the sec­re­tariat in the Min­istry of Macro-Eco­nomic Plan­ning and In­vest­ment Pro­mo­tion un­der the Min­is­ter (Dr) Obert Mpofu . . . ,” he said.

Bu­l­awayo City Coun­cil eco­nomic de­vel­op­ment of­fi­cer Mr Brian Hlong­wane said the lo­cal author­ity had al­ready set aside land for in­fras­truc­tural de­vel­op­ment as well as com­ing up with a num­ber of in­cen­tives in an ef­fort to at­tract in­vestors in prepa­ra­tion of the city be­ing des­ig­nated as one of the SEZs.

“Four sites have been iden­ti­fied or ear­marked for the es­tab­lish­ment of SEZ, these are the former EPZ (Export Pro­cess­ing Zone) site which has 256 stands rang­ing in size from 3 000 to 8 000 square me­tres with an over­all size of 188,64 hectares. It also has rail — served by three lines to Vic­to­ria Falls and Zam­bia as well as Harare (to the north) and Beit-Bridge to South Africa (to the south) as well as par­tially ser­viced with roads

“There is also an un-ser­viced area at Kelvin East com­pris­ing 127 stands rang­ing from 1 000 to 3 000 square me­tres as well as Old Mu­tual. Op­tion five will be the va­cant idle closed fac­to­ries as stand-alone SEZ units — quick wins read­ily avail­able, fully ser­viced with elec­tric­ity as well while op­tion six will be the area around the air­port ideal for elec­tron­ics,” said Mr Hlong­wane.

The lo­cal author­ity has also in­tro­duced flex­i­ble con­di­tions and pay­ment terms for prospec­tive land de­vel­op­ers as well as com­ing up with an in­ter­de­part­men­tal com­mit­tee that in­ter­ro­gates busi­ness pro­pos­als to elim­i­nate bu­reau­cracy.

It also of­fers ex­porters on stand-alone stands and those em­ploy­ing more than 100, a re­duc­tion of 50 per­cent rates pay­ments for the first five years while of­fer­ing 100 per­cent rebate for de­vel­op­ment ef­fected within the first year for five years with the of­fer cas­cad­ing to 20 per­cent for one year for an in­vestor car­ry­ing out de­vel­op­ment within five years.

Pol­icy an­a­lyst Mr But­ler Tambo said Bu­l­awayo’s SEZ should not only be ear­marked for leather and tex­tile but its scope should also in­clude the tourism and agri­cul­tural sec­tor.

“We should not be limited to leather and tex­tile alone. Of course his­tor­i­cally those have been our ad­van­tage as Bu­l­awayo but the com­ing in of Asian coun­tries like China means we might not nec­es­sar­ily still have a com­pet­i­tive ad­van­tage but in leather we have an added ad­van­tage con­sid­er­ing that Mata­bele­land is the re­gion that keeps most of the cat­tle within Zim­babwe, we might have our com­pet­i­tive ad­van­tage there,” he said.

He said Bu­l­awayo was poised for im­mense eco­nomic growth if its sur­round­ing ar­eas are also des­ig­nated SEZs for agri­cul­tural and tourism ac­tiv­i­ties.

“I also be­lieve we should broaden it (Bu­l­awayo SEZ) to cre­ate even an agri­cul­tural hub within Mata­bele­land re­gion, whereby we can look at the Zhove Dam in Beitbridge and utilise it for cit­rus for the pro­duc­tion of cran­berry juices and the likes through value ad­di­tion and the value chain, this is part of agri­cul­ture.

“The other one might be to tap into the vast tourism op­por­tu­ni­ties that we have here in Bu­l­awayo and around, those places which are least ad­ver­tised. I be­lieve if they can be cre­ated into a pack­age they can be able to bring about more tourism at­trac­tion, which can go be­yond look­ing at the Vic­to­ria Falls, the Great Zim­babwe and the Eastern High­lands and that way we can de­velop this re­gion in a bet­ter way,” said Mr Tambo.

A tax ex­pert Mr Peter Mgodi said the set­ting up of SEZs was a noble idea to­wards im­prov­ing in­vest­ment in­flows and turn­ing around the coun­try’s econ­omy but hinted that pol­icy in­con­sis­ten­cies had been the ma­jor down­fall to suc­cess­fully achieve this feat over the years.

“We have beau­ti­ful laws and poli­cies, on word, on pa­per, ev­ery­thing about Zim­babwe can sur­pass any other coun­try or can equate to any other coun­try, but ad­min­is­tra­tively that’s where I have a prob­lem with any other in­sti­tu­tion, the bu­reau­cracy, de­lays, penal­ties and bot­tle­neck for ex­am­ple to run a com­muter om­nibus you need about eight sets of ap­provals.

“What about open­ing an SEZ? If a com­muter bus can take about eight pa­pers to dif­fer­ent or­gan­i­sa­tions. What about open­ing up a busi­ness en­tity in an SEZ? I don’t know how many of­fices you will have to go and then when you are des­ig­nated, the cus­toms and taxes ad­min­is­tra­tive pro­ce­dures are also fight­ing against what we are try­ing to do,” said Mr Mgodi.

Coun­tries such as neigh­bour­ing Mozam­bique and South Africa are in the process of set­ting up SEZs and have over the years beaten Zim­babwe in at­tract­ing For­eign Di­rect In­vest­ment. SEZs al­low in­vestors to op­er­ate un­der “spe­cial” con­di­tions that are dif­fer­ent from the rest of the econ­omy and al­low in­vestors more priv­i­leges.

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