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A LOCAL business pressure group, Bulawayo Business Arise (BBA) will before the end of the month submit to government and policy makers a document calling for the city to be declared a special economic zone (SEZ).A SEZ is a geographical region that has economic laws different from a country’s typical economic law with the ultimate objective to promote rapid economic growth by using tax and business incentives to attract foreign investment and technology.
“If the proposal sails through, it will benefit the businesses currently operating and future investments in the city by awarding them tax incentives to promote the revival and growth of local industry.
“Tax incentives will come as a relief to businesses because it will give them the capacity to operate and increase production while attracting more investors, said BBA director George Mukamba in an interview last week.
BBA’s stance to urge the government to expedite the declaration of Bulawayo as a SEZ comes a few weeks after Finance and Economic Development Minister Patrick Chinamasa said in his budget proposals for this year that a range of measures to stimulate economic recovery would be put in place.
Some of the strategies are the creation of SEZs and geographical zones where industries would operate with a bias towards exporting their output.
SEZs have propelled the economic development of countries such as China, India and South Africa as they command incentives that are favourable to investors.
Despite the liberalisation of the economy in February 2009, Zimbabwe is still reeling under economic challenges such as liquidity constraints and intermittent power supplies resulting in Bulawayo, once the industrial hub of the country, suffering massive de-industrialisation.
In the past few years, more than 100 companies in the city have shut down resulting in at least 20,000 people becoming jobless. Mukamba said despite the economic challenges, businesses should remain resolute and work hard to restore productivity to competitive levels.
Last year, capacity utilisation in the country’s manufacturing sector declined from an average of 39,6 percent from 44,2 percent in 2012.
The High Court in Bulawayo has revealed that seven companies in Bulawayo were last year placed under judicial management while three others were in liquidation, further evidence that city industries are in a serious economic condition that needs special attention.
At the beginning of last year, the High Court revealed that about 20 firms in Bulawayo had been placed under judicial management since 2010 while 10 others were in liquidation.
Online Reporter