Frequently Asked Media Questions On Special Economic Zones
A Special Economic Zone (SEZ) refers to a geographically specified and physically secured area administered under a distinct authority, offering certain incentives including more liberal and simplified economic regulations for business to physically locate and operate within it.
Special Economic Zones are designed to address some of the public and private sector constraints in the country such as high unemployment, low exports, subdued competition, de-industrialization, availability of reliable quality infrastructural development and technological transfer. SEZ are increasingly becoming a preferred economic policy instrument for growth worldwide.
SEZs are governed by an Act of Parliament. The Act may be cited as the Special Economic Zone Act (Chapter 14:34). The Act establishes a body, to be known as the Zimbabwe Special Economic Zone Authority (ZIMSEZA), which is a body corporate capable of suing and be sued in its corporate name and subject to the Act.
Subject to the SEZ Act, the functions of the Authority are:-
- To establish special economic zones wherein export-oriented industrial activities will take place whether by way of manufacturing, processing, assembling goods or services or otherwise for the purpose of setting domestically such goods or services;
- To attract Foreign Direct Investment (FDI) into the Zones;
- To administer, regulate and control SEZs;
- To maintain such services, facilities and structures for the efficient operation of any SEZ;
- To permit service providers/ authorities/ agencies to streamline activities for one-stop-shop facilitation;
- To ensure the provision of adequate fencing and enclosures to segregate a SEZ from the Customs territory;
- Approve and regulate activities which may be carried on in a special economic zone;
- Grant investment licenses for investment in SEZs;
- Grant permits to developers of SEZ areas for infrastructure development, including but not limited to road works, communication technology works, water and electricity works;
- To constitute a single institution through which applications for the approval of investment in SEZ shall be made and through which all necessary approval licenses and permits may be granted or issued in respect of approved investments.
- To monitor and evaluate the implementation of approved investments in SEZ and report to the Board, and;
- To advise the responsible Minister all matters relating to investment in SEZ.
ZIMSEZA is currently setting up, we have appointed a Secretariat and the Chief Executive Officer with effect from 1 May 2018. We have already gazette fiscal incentives which have been in place since May 2018, and we await the gazetting of non-fiscal incentives and regulations.
Application for SEZ may come from either private, public, or private-public institutions and are submitted to the Authority for approval.
All applicants can benefit from SEZs whether foreign or domestic as long as your application satisfies the stipulated conditions and criteria set by the ZIMSEZA Board.
Any person who wishes:
- To obtain approval for investment to a SEZ;
- His or her business activity to be approved as an activity in a SEZ area;
shall submit an application to the Authority in the prescribed form( details obtainable from our offices, website brochures) for an investment, and the application shall be accompanied by the prescribed fee, if any, and such document as the Authority may require.
In considering for an investment license the Authority shall have regard to:
- The extent to which the proposed investment will lead to the creation employment opportunities and the development of human resources , and
- The degree of export orientation or import substitution of the project, and
- The impact the proposed investment is likely to have on the environment and, where necessary, the measures proposed to deal to any adverse environment consequences, and
- The extent to which the proposed investment will result in the transfer of technology and managerial and other skills, and
- The extent to which the proposed investment will establish linkages within the domestic economy, and
- The extent of value addition and beneficiation of local raw material raw materials and
- The extent to which the proposed investment will promote industrialization of the domestic economy and any other consideration that the Authority may consider appropriate.
We are adequately funded to operate and to discharge or mandate. As you know we are still setting up, procuring the necessary equipment and participated at this year’s Zimbabwe International Trade Fair in Bulawayo.
As an organization in its infancy you are bound to face teething problems, which we are overcoming. Our challenges is to quickly operationalize, employ staff and acquire necessary infrastructure e.t.c. We are getting there, but we are open for engagement as we speak.
The Authority will soon start to engage various communities in all 10 provinces to raise awareness of SEZs and how the country stands to benefit.
It is true that we have a lot to contend with especially, given the fact that, we are a new entrant in implementing the concept and most of the countries introduced the initiative long before us. We believe we will continue to learn as we go. We are taking a cue from the Rwandan model and experience and have recently engaged their Development Board to Zimbabwe to help us set up successfully. We are also obtaining useful know how from other friendly international countries, such as, the Peoples’ Republic of China and we will continue borrowing from their experiences.
It is also very true that most SEZs concepts have failed, especially, in African countries, but as, the Authority we resolved to take the bold step and from our comparative analysis study we seem to be on the right track. Our obtained incentives are in line with regional and international best practice, further we have adequate Government support and commitment, the right operating business environment and of-course we are endowed with opulent natural resources. The Authority is confident we compare well with other countries and we are equally competitive and stand a good chance to be a preferable investment destination. The confidence mainly arises from the applications of interest and wide-spread enquiries the Authority has been receiving to date.
It is true that we had EPZ before, and for your information, EPZs are one of the models of SEZs. The main difference is the objectives are wider and focusses on: promoting FDI, creating employment, technological transfer, improved competitiveness and strengthen the country’s industrialization efforts.
The idea is not to confine SEZs to one model. It will all depend on the project proposal infrastructure and criteria of the SEZs. The Authority has an “Open Door” policy and will be discussing various possible models with the applicants as we go along.
SEZs are part of ZIMASSET intended to address the issues of industrialization, competiveness, creating jobs and promoting value chains. To also add that ZIMASSET has not come to an end but its an ongoing story with the coming of SEZs.
The Authority is fully supportive of the Government’s “Open for Business” mantra and its vision to become a middle-income economy by 2030 if the government invests in productive sectors and encourage investment, as well as entrepreneurial development.