Special Economic Zones identification work in progress
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.