IN an effort to jolt the economy, the country is among other measures establishing special economic zones, but most people do not understand the concept or what these are.
Special Economic Zones (SEZs) are designated geographical regions which operate under specific economic regulations that are different from other areas in the same country.
They offer special conditions and incentives to promote international competitiveness.
Usually the goal of a zone is to increase Foreign Direct Investment (FDI) by foreign investors, typically an international business or a multinational corporation (MNC).
Government’s economic blueprint, the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim-ASSET) has also identified SEZs as one way of reviving the economy by attracting FDI through the provision of incentives.
In Zimbabwe seven SEZs have been identified so far; the diamond cutting and polishing in Mutare, industrial manufacturing in 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.
This week we will focus on Harare’s special economic zone, the Sunway City Integrated Park.
Sunway City was established by the Industrial Development Corporation of Zimbabwe (IDCZ) in partnership with Sunway City Malaysia in 1996, but the deal failed to take off following the financial turmoil in most Asian countries then.
Sunway City had approached the Malaysian Stock Exchange to seek US$15 billion to fund the project.
Since then IDCZ has gone into partnerships with local entities that include the National Housing Fund for the residential area and the National Social Security Authority (NSSA) in the construction of some factory shells.
The China National Development and Reform Commission team that was in the country recently also expressed interest in investing in the high-tech park.
The Sunway City Integrated Park comprises of residential stands, an industrial park and space for the establishment of a high technology park and specialist medical facilities.
The project is estimated to cost US$150 million and so far, approximately 22 percent of the park has been developed.
Hi-tech and IT Park
Sunway City is proposing to set up a high technology park which will act as a magnet for information technology and knowledge based industries.
The core anchors of the 76 hectare hi-tech park will be large multinational corporations such as Samsung, Huawei, Lenovo, Microsoft and ZTE, among others.
It will also house local communications companies, incubator facilities for small to medium-sized start-ups in innovation and technology as well as research and development institution.
Medical Park
The City will also include a medical park to offer specialist medical services such as oncology, radio therapy, urology, nephrology, orthopaedics and rehabilitation, ophthalmology, acute stroke and ear, nose and throat treatment.
Studies have shown that hundreds of locals are seeking such services as far as India, South Africa, East Asia and East Africa at very high costs such as US$20 000 for a oncology and diagnostic treatment.
Industrial park
About 200 hectares of land has been set aside for the processing of locally produced agricultural products and other raw materials in the area such as leather and leather products, sanitary wear, steel fabrication, processing or canning fruits and vegetables, oil extraction and chrome processing.
About 10 factories are already operating in the industrial park while three buildings which include two textile factories and a storage warehouse are under construction.
Dry port
Major developments have been undertaken to improve road and rail infrastructure both on the Zimbabwean and the Mozambican side of the Beira corridor.
The dry port will decongest the Beitbridge border post.
Currently significant shipping into Zimbabwe is coming through the Durban port and Port Elizabeth at a huge cost.
The dry port will help develop activities for imports into the country and the SADC region forming a major cargo hub in Harare.
More so, an oil cluster has been established around the National Oil Infrastructure Company of Zimbabwe’s above ground tanks for oil companies to set up depots and fuel related operations.
Other clusters include office park cluster, residential cluster and recreational facilities.
Under the residential cluster, about 700 low-density residential stands have been sold.
The SEZs however, are not an entirely new concept as Government once established Export Promotion Zones (EPZs) in the 1990s with more or less the same objectives.
Contrary to EPZs that were designed solely for exports, the SEZs are broader with focus in manufacturing of goods, value addition and beneficiation.
The category ‘SEZ’ covers a broad range of more specific zone types, including Free Trade Zones (FTZ), Export Processing Zones (EPZ), Free Zones (FZ), Industrial Estates (IE), Free Ports, Urban Enterprise Zones and others.
In China, SEZ were established by the central government under Deng Xiaoping in the early 1980s as part of its ‘open the door, change the system’ policy.
The most successful SEZ in China, Shenzhen, has developed from a small village into a city with a population of over 10 million within 20 years.
Following the Chinese examples, SEZs have been established in several countries, including Brazil, India, South Korea, Russia, United Arab Emirates, Malaysia, Zambia, South Africa, Kenya, Nigeria and Ethiopia.
A single SEZ can contain multiple ‘specific’ zones within its boundaries like Harare’s Sunway City.
The most prominent examples of this layered approach are Subic Bay Freeport Zone in the Philippines, the Aqaba SEZ Authority in Jordan, Sricity Multi-product SEZ and Mundra SEZ in India.