BERNARD MPOFU
ZIMBABWE has gazetted legislation which outlaws investors in special economic zones from selling a fifth of their output on the domestic market as government steps up efforts to boost sagging exports.
Official figures show that Zimbabwe’s exports stood at $3,5 billion between January and November last year compared to total imports of $4,9 billion registered during the same period under review.
The trade imbalance has resulted in shortages of the U.S dollar which is now trading at a premium on the parallel market.
Before the latest statutory instrument (SI54 of 2018) and the easing of Indigenisation regulations, investors were kept at bay by a law compelling them to sell 51 percent stakes of their investments to locals.
The new regulations also spell out the establishment of a one-stop shop at the Zimbabwe Special Economic Zones Authority which will facilitate the investments.
A Special Economic Zone (SEZ) refers to a geographically specified and physically secured area administered under a distinct authority, offering certain incentives including more liberal and simplified economic regulations for business to physically locate and operate within it. The investors licence fee, according to the statutory instrument shall be $1000 per annum.
Special Economic Zones are designed to address some of the public and private sector constraints in the country such as high unemployment, low exports, subdued competition, de-industrialisation, availability of reliable quality infrastructural development and technological transfer. SEZ are increasingly becoming a preferred economic policy instrument for growth worldwide.
“The licensee shall not sell more than 20 per centum of its annual production into the customs territory without the prior written consent of the authority,” the statutory instrument reads in part.
Government also undertook to facilitate the setting up of special economic zones within a week.
“The authority shall make a decision on whether or not to declare a SEZ no later than five days after the last date for receiving representations..,” the statutory instrument reads.
This year Zimbabwe was ranked 159 out of the 190 on the ease of doing business after the southern African country embarked on some reforms which saw it marginally improved. In 2011, the country was ranked 171 before the World Bank worked with government to improve Zimbabwe’s ranking as a preferred investment destination in the region. New Zealand is the top-ranked country while Somalia is at the tail-end.
