Export processing zones (EPZs) have mushroomed across Africa. Their logic is to attract export-oriented manufacturing investment to boost economies. EPZs, although they create controversy in certain circles, have been highl successful in Asia, central and Latin American countries. Is the attempt by Africa to follow suit bearing fruits?
African states, from Egypt in the north to Zambia in the south, have embraced export processing zones (EPZ) as a strategy to attract foreign investment. Also known as special economic zones, industrial development zones or free trade zones, the EPZ aims to attract export-oriented manufacturing investment by setting aside enclaves where investors receive a wide range of incentives and developed infrastructure.
They have been very successful in Asia. Industrialisation in countries such as China, Taiwan, Hong Kong and Singapore was propelled by implementing policies that promoted the creation of special investment and export processing zones.
China, for instance, established – between 1979 and 1988 – five major special economic zones (SEZs), and opened a further 14 coastal cities to investors. The strategy helped to attract foreign direct investment into industry and increased manufactured exports, ultimately creating GDP growth and employment.
While most nations were developing the foundations of an export-based economy which focused on the development of a manufacturing sector, Africa stagnated, relying on the export of raw materials. But the trend is gradually changing with countries adopting strategies and policies that will improve their standing on the world economic stage.
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