Ministry of Trade and Industry says it is developing special economic zones (SEZs) regulations to put in place a policy framework to provide a clear oversight in industrial parks development.
The ministry’s Principal Secretary Christina Zakeyu said this on Tuesday in Lilongwe during the validation meeting on Malawi’s SEZs regulation where stakeholders, including Malawi Investment and Trade Centre (Mitc) and United Nations Economic Commission for Africa (Uneca) participated.
She said the regulations, among others, will provide guidelines on issues of land acquisition and incentive bargaining to ensure investors adhere to the set policies when the SEZ rolls out.
Said Zakeyu: “This is important because with Uneca’s guidance, the regulations will be in line with the SEZ regional standards.
“This is also going to enhance the Ministry of Trade and Industry’s objective of frontloading industrialisation as an enabler of the Malawi 2063.”
On whether the SEZ rolling is delaying after enacting the SEZ Act in 2023, she said they are first ensuring that the sites have in place utility services before development.
Zakeyu said while Chigumula Industrial Park in Blantyre has taken shape, Magwero is still being developed.
Mitc acting director of trade promotion and facilitation Lovemore Ndege described the regulations as critical to their new mandate as the regulator of SEZ Act.
He said: “SEZ Act mandated Mitc as a regulator of the sector and also gave it authority powers.
“The regulations are important because they will guide how the process of managing SEZ in Malawi is supposed to be conducted.
Ndege said regulations are derived from the SEZ Act w.
Uneca chief inclusive industrialisation officer Olayinka Bandele said the SEZ regulations will be aligned with the development strategy for Malawi, which is modelled on the United Nations sustainable development cooperation framework.
“We signed this cooperation framework with the government of Malawi that is a partnership document which aims at strengthening economic transformition of the country through creation of jobs which are sustainable and inclussive,” she said.
But Public Accounts Committee (PAC) of Parliament chairperson Mark Botomani said the committee was concerned with the slow progress on the SEZ, despite resources being provided.
He said: “Ministry of Trade and Mitc officials appeared before PAC, but the update they provided is not convincing on progress of the SEZ. The reasons given for the delay of the project are not good enough.
“We observed that compensations were paid out to those affected by the projects, particularly in Area 55 in Lilongwe, where over K2 billion was paid. But to date, there is nothing much to show which begs the committee to dig more.”
Botomani said there is need to show value for the money spent.
But, in response to the queries Zakeyu said they have now sent a status report to the Auditor General on how these funds were used.
She said: “I am pleased to report that the Chigumula Industrial Park project has made a significant progress as designs for access roads and waste water infrastructures and layout plans were done and submitted to Blantyre District Council for approval.”
SEZs are designated areas within a country with special economic regulations. When completed, they are expected to help foreign direct investors to set up companies with minimal challenges, according to Mitc.
On December 6 2023, the Parliament of Malawi enacted the Special Economic Zones Act 2023, establishing a framework for the development and regulation of special economic zones in Malawi.
The SEZ Act is specifically designed to attract domestic and foreign direct investment into critical sectors of the economy.
The government believes that SEZs, which are geographical areas that have economic laws and tax regimes that are more liberal than a country’s typical economic laws, are key to attracting investment to sectors that it cannot invest in.
