SEZs: Ball in Gono, board’s court

THE appointment of the Special Economic Zones board led by former Reserve Bank of Zimbabwe Governor Dr Gideon Gono this week is a welcome development that will enhance speedy implementation of the investment attracting programme.

We applaud Government for moving fast in appointing the board because the Special Economic Zones Act that was passed last year left all the arrangements for the special trading areas to be decided by the board.

These include setting the export incentives and coming up with rules and regulations that govern selected trading areas.

There was no way investors would rush to establish themselves in the reserved trading areas without knowing the benefit.

It is in the same spirit of progress in establishing the SEZs that we urge Dr Gono’s board to move fast in clearing all the questions that could have been holding investors back.

We note that the board is well-balanced in terms of the human resources skills composition and coming up with clear policies should not present challenges.

Elsewhere, especially in some Asian countries, SEZs have proved to be an economic game changer. The SEZs have showed that they can be key attractions for investment into any country if properly managed.

In China, for example, that country’s reform and opening up policy in 1978 included the establishment of SEZs to attract foreign investment. It is such SEZs which are largely credited for the rising of China as an economic giant to become the world’s number two economic colossus.

One of the success stories, Shenzhen, that was designated as an SEZ, developed from a small fishing village in the 1980s to a city with a population of over 15 million within 20 years.

We are not advocating taking the Chinese example hook, line and sinker, we have an option to choose aspects that only apply to our vision, our situation and our development ambitions.

The SEZ board is the final piece of the puzzle and the cornerstone of the initiative as it will drive the process of establishing the SEZs.

We hope that the board will literary hit the ground running, as the economy is in critical need of new investment.

In this regard, the board needs to come up with attractive measures that will persuade investors that have hitherto been sitting on the fence. The foundation for the SEZs is already in the Zim-Asset economic blueprint.

We hope to see some movement soon on the seven areas earmarked for the SEZs.

These are Mutare for diamond cutting and polishing, industry and manufacturing for Bulawayo, petroleum and IT in Harare, chemical and gas production in Lupane, tourism in Gwayi-Victoria Falls, agro-processing in Norton and textile processing in Kadoma.

Sunway City Integrated Industrial Park in Harare, which together with the Victoria Falls financial hub and the Bulawayo industrial hub have been selected for trial runs before the SEZ initiative is spread to the rest of the country, has already demonstrated its potential to lure investment.

It is already home to PPC’s $85 million cement grinding plant, which was commissioned by President Mugabe in March this year.

The plant was the first investment into the park after it was designated as an SEZ.

The SEZ board should ensure that the momentum that has gathered so far gains traction going forward by engaging those investors that have already shown a keen interest in the initiative.

The China Industrial International Group has already identified 50 hectares of land for development of an agricultural SEZ in Norton, while another 100ha for another SEZ specialising in agriculture has been earmarked in Mazowe.

Chinese firm, Qingdao Hengshun Zhongsheng Group, is also reported to be on the verge of setting up a $6 billion industrial park in Zimbabwe.

If properly nurtured such investment has the capacity to transform the country’s economy because SEZ by nature bring in new technologies and increase in production.

They eventually lead to quick industrialisation of the economy.

In pushing the SEZ initiative, it is important for the board to be wary of pitfalls that lie ahead.

The Zimbabwe Economic Policy Analysis and Research Unit (ZEPARU) contends that SEZs are largely a tenuous initiative that can sometimes prove to be unreliable.

The reasons for this poor performance, according to the unit, include a poor choice of location and insufficient strategic planning and management; inadequate infrastructure, for example in access roads, energy, water and ineffective policy, regulatory and institutional frameworks.