Growing competition for SEZs
13 Jun 2019 - by Ed Richardson
South Africa’s special economic zones (SEZs) are facing increasing global competition to attract investors.
What started out as industrial development zones were initially strategically positioned next to ports or airports. At the time the government believed that the logistical advantages made it unnecessary to offer incentives.
There are now incentives in place, but a new wave of industrial policies and increasing competition for international investment has sparked a boom in the establishment of SEZs according to Unctad’s World Investment Report 2019.
The global tally of zones has increased to nearly 5 400, up from 4 000 five years ago.
More than 500 new SEZs are in the pipeline.
“There are many examples of SEZs that have played a key role transforming economies, promoting greater participation in global value chains and catalysing industrial upgrading,” said Unctad secretary-general Mukhisa Kituyi.
“But for every success story there are multiple zones that did not attract the anticipated influx of investors, with some becoming costly failures,” Kituyi added.
In an attempt to make SEZs more attractive countries are entering into partnership to create cross-border zones.
One example is a SEZ comprising Burkina Faso, Côte d’Ivoire and Mali in the SKBo triangle.