Tuesday, March 9, 2021

Where are the Special Economic Zones? It’s been four years!

In February 2011, our cabinet approved the draft policy on Special Economic Zones (SEZs) which was later delegated to the then Botswana Export Development and Investment Authority (BEDIA), now Botswana Investment and Trade Centre. BEDIA was declared the interim authoritative body to oversee implementation of Special Economic Zones (SEZs) in the country.

The proposed SEZs Policy defines SEZs as geographically distinct economic areas with their own administrative authority for provision of an investor-friendly business environment that will make our country the most preferred destination for both domestic and foreign investment.

Amongst other things, the policy aims at diversifying the economic and export base of Botswana into sectors that will continue to grow even after diamonds have run out. As we all might be aware, the policy emanated from the recommendations of the Botswana Business and Economic Advisory Council of 2005. Former Trade Minister, Dorcus Malesu indicated a few years back that development of the policy involved extensive stakeholder consultations in government, parastatals, the private sector and civil society, including labour organisations.

Amongst key tasks given to the Special Economic Zones authority body (now BITC) is the administration of SEZs, specifically in terms of staffing, budget, spending and policymaking.

To date the nation has not yet been updated on the implementation of this rather noble policy. The key question that remains to be answered is why do policy makers at BITC allow a policy which we were made to believe was cast within the context of domestic policies, strategies and legislation, to rot on the shelves for this long?

In some other countries policies and law that governs SEZs have been used to identify various cities and large towns as gateways and hubs that lead development in their regions, with other towns, villages and rural areas characterised as having complementary roles. We will all agree that our country already has potential economic hubs such as Maun (Tourism), Lobatse (Dairy and Transportation), Sowa (Glass and Salt production) as well as Francistown ( Gold and Copper Mining), just to name a few. What is left for us or perhaps for BITC is to put in place a set of laws and regulations to govern the development and operations of SEZs and their enterprises across the country. Should this really take us more than four years?

While at it, BITC should be reminded that the policy should cover all legal requirements for efficient and effective functioning of modern SEZs. This should be done to guard against any possible failure as seen in other countries. Policy makers at BITC and government enclave need to learn a few things from what Mauritius did to succeed in transforming its sugar economy into a textile exporting economy in the 1980s and 1990s through SEZs. The country’s SEZs provided a tax-free and welcoming business environment for investors. As previously said on this column, policy makers at BITC and government enclave should be reminded that it will take much more than ceremonial, lavish talks, as well as exclusive interviews and live coverage by the state television to transform potential economic hubs such as Selebi Phikwe and Maun. We should also guard against the temptation to place such zones in isolated locations that have no commercial advantage to business.

The #bottom-line however is that the establishment of economic hubs through special economic zones has the potential to speed up decentralization, which in turn will expand our economy and bring an end to escalating unemployment.

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