THE Gideon Gono-led Special Economic Zones (SEZs) board should plug loopholes and explain salient features of the SEZs Act so that it becomes clear to anybody who interprets and wants to implement it.
BY MTHANDAZO NYONI
President Robert Mugabe recently appointed a board led by the former Reserve Bank of Zimbabwe governor to spearhead the implementation of SEZs that have been touted as a key pillar in attracting foreign direct investment and creating employment.
Bulawayo, Victoria Falls, Harare’s Sunway City, Mutare and Lupane have been chosen for the SEZ development.
In Bulawayo, the plan is to set up an industrial economic zone covering the beef and leather industry, cotton and textile, steel and foundry as well as the rehabilitation of the National Railways of Zimbabwe.
However, industry stakeholders and economic commentators who spoke to Standardbusiness last week said while they welcomed the promulgation of SEZs, government needed to clarify their role.
“Yes, it is okay that we now have a board and we now have the Act that specifically focuses on Special Economic Zones with Victoria Falls in particular being listed as one of the places that should benefit.
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“However, the reading of the Act seems to suggest that there are quite a lot of things that still need to be knitted up,” Employers’ Association of Tourism and Safari Operators president Clement Mukwasi said.
“There is no direct implementable section within the Act that you can touch on as an investor or as a business and say this is where we draw our wisdom from; this is where we draw our authority from; this is where our comfort of investment comes from.
“So, what is needed now since there is a board is for the board to come up with regulations that actually edify the provisions that are in that Act.”
Mukwasi said there was also need for a strategy and plan to be put in place as well as clarification as in “who does what, what does the government do, what do the municipalities do and what do members of the private sector do as well as what individuals do”.
At the moment, Mukwasi said such clarification was not there and it was difficult to know whether the SEZ declaration was going to benefit industry.
“So we implore the board and the minister responsible for the Act to ensure that they plug loopholes, they plug in the salient features of that Act to ensure that it becomes certain to anybody who interprets it, to anybody who wants to implement it and to anybody who wants to benefit from the provisions of the Act,” he said.
“This is where we are but we are not going to be watching and sitting by.
“We are ready to spring into action but we must spring in the direction that is predictable, that is clear to us and the benefits we are sure are going to accrue.
“We just implore the powers that be to ensure that they clear the ambiguities that are created by the Act”.
The Confederation of Zimbabwe Industries Matabeleland Chapter president, Joseph Gunda said the setting up of SEZs was a noble idea and they commended government for taking heed of industry’s call to institute such initiatives.
“We are glad that the board spearheading this drive includes industrialists and members of CZI who understand the expectation of industry,” Gunda said.
“As CZI Matabeleland Chapter, we expect the board to spearhead the re-industrialisation of Bulawayo through a raft of incentive packages particularly for existing and struggling businesses with the ultimate goal of restoring Bulawayo to its original status as the hub of manufacturing in Zimbabwe. “China did it successfully and we can do it too.”
Gunda said if the law was crafted and applied properly and the board was allowed to carry out its mandate effectively, SEZs broad incentive categories should benefit local businesses more than foreigners.
“The key objective is to restore the manufacturing sector’s capacity to produce goods and services competitively and create economies of scale that are good enough for the Bulawayo located zone to be internationally competitive and this cannot be achieved through foreign investors alone without local companies,” he said.
Gunda said the fiscal, non-fiscal and monetary incentives such as duty free importation of capital equipment, duty exemption for imported raw materials used by companies set up in the SEZ, dedicated power and water supplies for companies operating in the SEZ, preferential rates on land rentals among others, were all incentives that will spur growth of local companies to adequately service both the domestic and export markets.
But out-going Zimbabwe National Chamber of Commerce (ZNCC) president, Davison Norupiri said the SEZs law favoured foreign investors more than locals.
“They are only for foreign investors and they are not favourable to local investors and it’s an issue which we feel that ‘minister, if it’s possible, your local investors would also want to invest in special economic zones’ and we, therefore, plead with you and ask government if they can also intervene on that,” Norupiri said.
An economic analyst, Reginald Shoko encouraged local entrepreneurs to take advantage of the programme as its implementation was crucial for the development of exports.
He said SEZs had benefits to investors due to the limited requirements in starting operations, waivers in some tax requirements and labour costs.
“The new board must clarify in its implementation of the law, matrix around the balance of promoting investments and job creation which does not take advantage of labour,” Shoko said.
Speaking at the ZNCC 2017 annual congress recently in Victoria Falls, Vice-President Emmerson Mnangagwa said Chinese investors had already shown interest in investing in the SEZs following the Zimbabwe-China Zhejiang Province Investment Conference where memoranda of understanding were signed.
The agreements made it possible for the Chinese to explore investment opportunities in Zimbabwe and construct an industrial park.
Macro-economic Planning and Investment Promotion minister Obert Mpofu said the board would recommend additional incentives, which would also apply in the SEZs and would be soon gazetted through a statutory instrument.
He said these incentives were classified into fiscal, non-fiscal, monetary incentives, as well as incentives for SEZ developers.
