{"id":9474,"date":"2026-09-27T08:56:06","date_gmt":"2026-09-27T11:56:06","guid":{"rendered":"https:\/\/www.abrazpe.org.br\/?p=9474"},"modified":"2026-09-27T08:56:09","modified_gmt":"2026-09-27T11:56:09","slug":"can-africas-special-economic-zones-build-more-than-factories","status":"publish","type":"post","link":"https:\/\/www.abrazpe.org.br\/index.php\/2026\/09\/27\/can-africas-special-economic-zones-build-more-than-factories\/","title":{"rendered":"Can Africa\u2019s Special Economic Zones Build More Than Factories?"},"content":{"rendered":"

Tempo de leitura: 7 minutos<\/small><\/p> \n

In May 2026, Kenya amended its Special Economic Zones framework<\/a>. The amendment was presented as part of efforts to strengthen the investment environment and improve the competitiveness of the country\u2019s SEZ programme.<\/p>\n\n\n\n

South Africa is confronting a related question from a different starting point. It already has an established SEZ programme and is now reviewing its performance. In July, the government announced that it was considering a five-year intervention framework for underperforming zones<\/a>, changes to infrastructure financing and greater private-sector participation following a World Bank study of the programme<\/a>.<\/p>\n\n\n\n

The wider continental picture is similar. More than 230 SEZs<\/a> have been established across Africa. They remain central to national industrialisation strategies, with governments using them to attract investment, increase exports and create employment. At the same time, recent work by the Economic Commission for Africa<\/a> identifies recurring concerns around weak domestic and regional linkages, imported inputs, governance, infrastructure and the use of fiscal incentives as a primary means of attracting investment.<\/p>\n\n\n\n

The policy instrument therefore deserves closer examination. African governments are committing land, infrastructure, administrative capacity, and fiscal resources to zones, expecting them to contribute to industrialisation. The central issue is what those investments produce beyond the boundaries of the zone.<\/p>\n\n\n\n

What is an SEZ supposed to do?<\/strong><\/h2>\n\n\n\n

An SEZ provides firms with an operating environment that differs from the wider economy. The precise package varies by country and zone, but may include tax incentives, customs arrangements, serviced industrial land, infrastructure and streamlined administrative procedures.<\/p>\n\n\n\n

Industrial production requires infrastructure, reliable utilities, efficient customs procedures and access to suitable land. Providing these conditions within a defined geographical area can reduce some of the costs and risks associated with investment. This can support investment and production.<\/p>\n\n\n\n

For industrial policy, however, the significance of an SEZ extends beyond the activity of the firms located within it. A manufacturing firm may employ workers and export goods while generating limited benefits for firms elsewhere in the economy. The broader developmental effect depends partly on whether production creates relationships that increase domestic productive capacity.<\/p>\n\n\n\n

These relationships can take several forms. Local firms may become suppliers. Workers may acquire sector-specific skills. Domestic businesses may gain production and management capabilities. Firms may introduce new technologies and production methods. Activities initially undertaken by foreign or larger firms may gradually become embedded in the domestic economy.<\/p>\n\n\n\n

UNCTAD identifies these effects, including industrial upgrading, technological learning and knowledge spillovers<\/a>, among the potential benefits of SEZs. Its Handbook on Special Economic Zones in Africa<\/em><\/a> also notes that African zones have experienced significant performance challenges and calls for policies capable of generating wider economic benefits.<\/p>\n\n\n\n

This creates two levels at which an SEZ can be assessed. The first concerns activity within the zone: investment, production, exports and employment. The second concerns the productive capabilities created through that activity: domestic suppliers, skills, technology, value addition and linkages with the wider economy. The distinction is important for any assessment of SEZs as instruments of structural transformation.<\/p>\n\n\n\n

Where SEZs can fall short<\/strong><\/h2>\n\n\n\n

Investment, employment and exports provide useful measures of activity. They are also relatively straightforward to record. They provide less information about the capabilities that an economy acquires through the investment.<\/p>\n\n\n\n

A firm operating within an SEZ may import machinery and intermediate inputs, employ local workers and export finished products while retaining research, design, technology and other higher-value functions elsewhere. The host economy can still gain through employment, production and foreign exchange earnings. The extent of domestic capability created through the activity will depend on the relationships established around the investment.<\/p>\n\n\n\n

This is a recurring concern in African SEZ policy. ECA’s work on Central Africa identifies weak linkages with local economies<\/a>, limited employment effects and governance challenges among the issues affecting industrial zones. The broader continental literature<\/a> similarly points to the difficulty of converting investment within zones into wider productive transformation. The design of incentives is therefore important.<\/p>\n\n\n\n

Where a government provides tax concessions, infrastructure or other forms of preferential treatment, it needs to establish what those benefits are intended to achieve. Investment and employment may form part of the objective. For a programme aimed at industrial transformation, the policy may also seek domestic procurement, skills development, technology transfer, local value addition or movement into higher-value activities. These objectives require appropriate conditions and monitoring.<\/p>\n\n\n\n

The same issue arises at the level of the zone itself. Infrastructure can improve conditions within an industrial area without creating strong connections with businesses outside it. Local firms may remain unable to meet the technical, financial or quality requirements of zone-based manufacturers. Where this occurs, the zone can remain relatively disconnected from the productive economy surrounding it.<\/p>\n\n\n\n

South Africa’s current review illustrates the importance of this question. The World Bank study found substantial activity within the country’s SEZ programme, including more than 30,000 jobs and R14.8 billion in revenue<\/a> generated by operational zones. The government has also identified the need for a formal five-year intervention framework for underperforming zones<\/a>.<\/p>\n\n\n\n

The implication for policy is clear. Performance needs to be assessed over time, and support needs to be connected to the objectives for which it was provided.<\/p>\n\n\n\n

What should change?<\/strong><\/h2>\n\n\n\n

The first point of reform is the relationship between incentives and performance.<\/p>\n\n\n\n

Where firms receive preferential treatment because the state expects particular economic outcomes, those outcomes should form part of the conditions attached to that support. Performance requirements can be designed according to the sector and the purpose of the zone. They may cover investment, production, employment, exports, domestic procurement, skills development, technology transfer or local value addition.<\/p>\n\n\n\n

These requirements also need credible monitoring and consequences. Where firms consistently fail to meet agreed conditions, governments should have mechanisms for reviewing, reducing or withdrawing particular benefits.<\/p>\n\n\n\n

The second area is the relationship between SEZ firms and domestic businesses.<\/p>\n\n\n\n

Local supplier development requires more than the physical presence of factories. Smaller firms may need access to finance, certification, technical assistance and support to meet the standards required by manufacturers. UNCTAD has specifically examined how SEZ policy can be used to support MSMEs and local entrepreneurship around zones<\/a>.<\/p>\n\n\n\n

Technology transfer requires a comparable approach. Where a zone is established around a particular industry, governments should identify the capabilities that domestic firms and workers are expected to acquire and establish mechanisms through which those capabilities can develop.<\/p>\n\n\n\n

Cameroon’s emerging model of Tailored Special Economic Zones<\/a> illustrates one possible direction. ECA reports that the model is being designed around local economic potential, SME integration, value addition and specific production basins, with the stated objective of strengthening local value chains and advancing regional industrialisation.<\/p>\n\n\n\n

The third area is regional integration.<\/p>\n\n\n\n

Many African economies have domestic markets that are too small to support specialised manufacturing at efficient scale. The AfCFTA provides an opportunity to connect production across national markets, but firms require functioning trade procedures, infrastructure, standards and regional supply relationships to use that market effectively.<\/p>\n\n\n\n

SEZ policy should therefore be connected to regional value chains. A zone can specialise in particular stages of production while firms in other African economies provide inputs, components, processing or services.<\/p>\n\n\n\n

This approach is already reflected in continental policy discussions. UNCTAD has emphasised the need for African SEZs to adapt to the AfCFTA<\/a> and to changing global and regional value chains.<\/p>\n\n\n\n

What should we measure?<\/strong><\/h2>\n\n\n\n

The performance of an SEZ should ultimately be visible in the productive economy surrounding it.<\/p>\n\n\n\n

Investment, exports and employment remain important indicators. They should be accompanied by measures that capture whether productive capabilities are developing:<\/p>\n\n\n\n