Declare Bulawayo special economic zone: Analyst

SPEEDY declaration of Bulawayo as a special economic zone (SEZ) as proposed by the government’s economic blueprint ZimAsset would propel the city back to its industrial hub status, a policy and economic analyst has said.


Bulawayo-based policy and economic analyst Butler Tambo said the basic concept of a special economic zone includes several specific characteristics.

“It is a geographically delimited area, usually physically secured, that has a single management or administration. It offers benefits based on physical location within the zone and it has a separate customs area (duty-free benefits) and streamlined procedures,” Tambo said.

“In addition, a SEZ normally operates under more liberal economic laws than those typically prevailing in the country.”

Tambo said SEZs confer two main types of benefit, which explain in part their popularity — “direct” economic benefits such as employment generation and foreign exchange earnings, and the more elusive “indirect” economic benefits.

“Countries develop SEZs for a variety of reasons, including static benefits such as attraction of both domestic and foreign direct investment through the provision of a variety of economic incentive packages and world-class infrastructure, facilities and services.

“Promotion and development of a diversity of exports into world markets, generation of both government revenue and required foreign exchange earnings, more especially in developing countries and employment creation, income generation and poverty reduction.”

He said SEZs are also created with a view to reaping dynamic benefits, which include demonstration effects whereby SEZs act as catalysts for policy reform and application of best practices in the production of goods and services.

SEZs development may be used as an “economic laboratory” by providing opportunities to experiment on best practice economic policies that have not been tried in a particular country, development of backward and forward linkage industries through SEZs linkages as well as linkages with local firms for raw materials, intermediate inputs and capital equipment.

Tambo further said SEZs ensured growth poles for industry development and/or revitalisation in underdeveloped or depressed areas, technology transfer, skills upgrading and indirect employment creation, development of modern business management skills, particularly business management skills from foreign investors and economic diversification in resource-based economies.

“For instance, it is extremely difficult if not impossible for a Bulawayo-based company to win a multi-million dollar contract or government tender because important institutions responsible for tenders like the State Procurement Board are based in Harare.”

Tambo’s remarks follow repeated calls by the Zimbabwe Congress of Trade Unions to declare Bulawayo an economic zone after massive industry closures.

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