Malawi, others tipped on Special Economic Zones
Durban University of Technology assistant professor of economics Gift Mugano says governments should always strive to bring quality partners and game-changers for the successful implementation of special economic zones (SEZs).
SEZs are demarcated geographical areas within a country’s national boundaries where the rules of business are different from those that prevail in the national territory.
In his virtual presentation on Saturday for the United Nations Economic Commission for Africa (Uneca) on the role of SEZs in private sector development and industrialisation, Mugano said there is need to deepen backward and forward linkages to foster industrialisation.
He said: “Key infrastructures such as electricity, water, factory shells, road networks, are required on SEZs.
“There is need for appropriate regulations which direct SEZs firms to export as opposed to directing the products in the local markets.”
Published data from Uneca indicates that at the start of the Export Processing Zones (EPZs) in 1996 as SEZs, Malawi registered 40 firms.
Of these, 22 were in textile and apparel, six in agro-processing, seven in horticulture, four in mining and one in wood and wood products.
To date, Ministry of Trade and Industry data shows that the country only has about 15 active EPZ firms. These include, Kawalazi Estates, Malawi Mangoes Limited, Thyolo Nut Company, Sable Farming, Makande Estates, and Vizara Rubber and Wood.
Most of the EPZ firms are now into macadamia, animal skins, wood and fruit processing, according to the Ministry of Trade and Industry.
Mugawa observed that most zones in Africa countries such as Zimbabwe, Nigeria, Namibia, Senegal, Malawi and Mali performed dismally due lack of effective planning and management, lack of political will, poor location and policy inconsistency.
Ministry of Trade and Industry spokesperson Mayeso Msokera said the current EPZ scheme is made up of a variety of operations as opposed to smaller firms that were in concentrated sectors such as textile.
He said that in the current EPZs regime, there are no specific zones dedicated to export processing, rather it is firms which are designated the status of EPZs and are located in areas of choice and convenience to the investor.
Msokera said: “The coming into force of the Southern Africa Development Community Trade Protocol and the designation of Malawi as an African Growth and Opportunity Act beneficiary country in 2000 provided relief to the surviving firms in the textile industry, for instance, Win-Win Garments.
