EDITORIAL COMMENT: Gono board must conquer Herculean task

19 Jul, 2017 - 00:07 0 Views
EDITORIAL COMMENT: Gono board must conquer Herculean task Dr Gono

The Herald

Dr Gono

Dr Gono

Efforts by Finance and Economic Development Minister Patrick Chinamasa to provide guidance to the Special Economic Zones Authority board is most welcome.

His meeting with the new board on Monday shows there is political will to ensure the project moves forward urgently. The new board is led by former Reserve Bank of Zimbabwe governor Dr Gideon Gono.

In other countries, especially in Asia, SEZs are hailed as the panacea for a quick economic turnaround. Such zones did wonders in countries such as China, India, Jordan, Poland, Kazakhstan, Philippines and Russia.

Upon their implementation, Foreign Direct Investment started flowing into these countries, contributing to industrialisation and economic growth.

We want to warn Dr Gono and his board that establishing SEZs is not a stroll in the park. There is so much work that needs to be meticulously done, especially on establishing applicable rules and regulations that ensure the project is successful.

What is needed is to balance between the interests of Government and local people against those of potential investors.

The board should be vigilant not to be swayed by the need to gain quick FDI at the expense of the people. If done piece-meal, SEZs can disadvantage the locals, while at the same time scaring away potential investors.

Minister Chinamasa told the board at that meeting that the challenge that lies ahead is to “spearhead an export-led growth of the economy and enhance the country’s capacity to earn foreign currency”.

There is need to ensure that investors who will operate in the SEZs bring in new technologies that help in transforming the country’s industrial capacity.

If implemented accordingly, SEZs have the potential to turn swathes of land into new industrial zones that enhance the country’s vision to industrialise.

The SEZA board is faced with a mammoth task to ensure that procedures, rules and regulations are simplified enough to attract as many investors as possible.

The board has to look at issues like tax incentives that will ensure the country benefits, while at the same time encouraging more investors to come. Attractive incentives are the hallmark of successful SEZs in countries cited above that have established such free trading zones.

This means that bureaucracy cannot be tolerated, as it has the potential to frustrate the investors. We should guard against turning the SEZs into “white elephants”, which do not benefit the country.

We are fortunate enough that we have an example where an attempt to establish such a free trading zone has dismally failed. In 1999, the then Minister of Industry and Commerce, the late Dr Nathan Shamuyarira, launched the Beitbridge Export Processing Zone (EPZ).

EPZs operate exactly in the same way with SEZs, and are only different in the name. The only evidence of an attempt on the Beitbridge EPZ are empty factory shells at the site.

It is incumbent upon Dr Gono and his board to thoroughly study what contributed to the failure of the EPZ project in Beitbridge. Lessons from the experience would become handy in establishing the SEZs.

We expect the SEZs to contribute to the improvement of local infrastructure, bring in technology, create employment and equip locals with skills to enable them to drive the country’s industrial vision.

SEZs are welcome as they are in line with the fulfilment of provisions of the Zim-Asset economic blueprint. But for them to work effectively, there is need for both political and economic will.

Political will has already been demonstrated through the enactment of the Special Economic Zones Act, what is left is for those responsible for the next phase to push rigorously.

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