Meeting on crafting of SEZs bill set up

Oliver Kazunga Senior Business Reporter
THE government will meet different interested parties this week to deliberate on the crafting of a Special Economic Zones (SEZs) bill, a senior official has said.

SEZ are designated geographical regions, which operate under special economic regulations that are different from other areas in the same country.

The initiative is crucial for resuscitating industries in the country and has proved to be useful in developed countries.

Economic Planning and Investment Promotion Permanent Secretary, Desire Sibanda told Business Chronicle the bill would pave way for the promulgation of the SEZs Act, which the government requires to spur investor confidence in the zones.

“We’re meeting a number of stakeholders on Monday next week(today) to start crafting the SEZs bill. To create SEZs we need to have an Act of Parliament promulgated, which the government will then use particularly in creating incentives and investors’ confidence in the zones,” he said.

Last month, the government announced the approval of three pilot projects – two from Matabeleland North – for the implementation of SEZs whose Act is expected to be promulgated between June and July.

“The SEZ bill is all-encompassing, that’s why we’re consulting with stakeholders from different sectors such as mining, agriculture, finance, tourism and energy, among others,” he said.

The three pilot projects on the petroleum-chemical industry will be done in Lupane, where recent exploration activities have shown that the area was endowed with coal-bed methane gas.

Victoria Falls will be specifically designated for tourism while Mutare and Harare will be for diamond cutting and polishing.

It is hoped that the SEZ initiative will provide special conditions and incentives to promote international competitiveness.

Most governments have established SEZs to attract foreign direct investment, promote export-oriented growth, acquire new technology by bringing companies to manufacture goods in their countries thus generating employment and increasing the share of manufacturing over the Gross Domestic Product.

As the proposed SEZs offer fiscal regimes that are different from those of the domestic economy, the government through the Zimbabwe Agenda for Sustainable Socio-Economic Transformation, identified the introduction of the zones as a vital pillar of its strategy to turnaround the economy.

The proposed operating framework for the SEZs in Zimbabwe is aimed at supporting the country’s comparative advantage as well as exploiting the present stock of infrastructure given that industry was operating below optimum capacity level.

Capacity utilisation in the manufacturing sector last year declined to 36,3 percent from 39,6 percent in 2013.