UNCTAD, in collaboration with the African Union and German companies, organized a two-day workshop on the contribution of Special Economic Zones (SEZs) to economic diversification in Africa in the context of the AfCFTA at Labadi Beach Hotel on June 2 and 3, 2022.
The workshop titled “Special Economic Zones in Ghana as a Tool for Industrialization and Diversification” aimed to share best practices on the development of Special Economic Zones and contribute to the AfCFATA implementation process.
It also provided a platform for the diverse community of stakeholders to discuss the role that special economic zones can play in the continent’s economic diversification and support for regional integration.
Participants included government representatives from several African countries, experts and practitioners as well as executives from the private sector and pan-African organizations.
The workshop presented key lessons learned from the development of SEZs in Africa and the implementation of policies targeted at SEZs.
He addressed the key factors that contribute to the success of the zones through the assessment of the main success stories on the continent.
The workshop also covered the integration of Sustainable Development Goals (SDGs) into SEZ policy development with a focus on labor and environmental practices.
The event also served as a platform for discussion on regional integration and the implementation of the AfCFTA.
The two-day workshop covered a high-level panel discussion, presentations of the handbook’s findings to a diverse audience of policymakers and practitioners as well as academic training sessions and ZES tours.
Remarks from Hon. Alan Kyerematen, Minister for Trade and Industry at the workshop, said; “SEZs are increasingly playing a key role in Africa’s industrial transformation and economic growth. While many challenges lie ahead, these zones can play a huge role in the development of the African continent as part of the Agreement on the African Continental Free Trade Area”.
He further said; “Technology and innovation play a vital role in transforming an economy. Africa is lagging behind in terms of innovation and technology. SEZs through FDI act as a mode through which the improvement and implementation of innovative technologies. There is also the transfer of knowledge between local and foreign counterparts in the execution of tasks. Therefore, the dynamic benefits that come with spatial development can help achieve the goal of the AfCFTA and ensure the structural transformation of the continent.
“Similarly, although the implementation of the African Continental Free Trade Area (AfCFTA) agreement is expected to have a significant impact on SEZs on the continent, there is a lack of research and policy guidance on how zones can adapt to the new regulatory environment.
If Africa is serious about adopting the SEZ model for development, policy adjustments are urgently needed. The current situation will not stimulate industrialization and will not promote Africa’s active participation in world trade.
Achieving this requires a strong long-term vision and institutional support for the success of SEZs and development in Africa, combined with effective cooperation between different levels of government agencies and the private sector.
Furthermore, SEZs are known to increase domestic and foreign direct investment (FDI) in economies due to their distinct regulatory regime and incentives. It is estimated that FDI inflows into Africa increased by 11% in 2018 and that 80% and 60% of FDI inflows in 2018 to Egypt and Nigeria are directed to SEZs respectively. »
He urged all participants to help maintain a disciplined focus on the agenda to ensure that by the end of the workshop they will have a practical appreciation of the importance of SEZs for economic diversification in Africa in the context of the AfCFTA.
Delivering an opening address, HE Amb. Michael Oquaye, CEO of the Ghana Free Zones Authority, also said; “Africa is endowed with many natural resources and every country can boast of having one dominant resource. So there is a great opportunity to leverage the resources we have to benefit from economies of scale and become competitive as a continent.
“The AfCFTA is a major initiative to strengthen structural transformation and improve the competitiveness of African industrial products.
It is generally accepted that the opportunities generated by deeper regional integration will only fully materialize if African countries develop productive capacities, enabling them to take advantage of the economic complementarities between their economies and this is the reason why SEZs are crucial for the dynamics of industrialization in Africa.
However, for SEZs to succeed, it is necessary to develop productive capacity by attracting companies in strategic sectors and industries. This will be the strategic direction of the Ghana SEZ as well as the development of regional and continental value chains.
In this regard, initiatives that our line ministry is undertaking include site assessment of government land banks including Greater Kumasi Industrial Park Project, Sekondi PTA, Yabiw (Shama) PTA, Bank land bank of Busila and the Land Bank of Salvelugu. Plans are also well advanced to create SEZs for the automotive, pharmaceutical, agribusiness and ICT sectors, as well as to build business incubation centres.
Another bold step by the government is the establishment of the Petroleum Hub Development Corporation with a mandate to create an oil hub SEZ on 20,000 acres of land at Jomoro in the Western Region of Ghana. GFZA has also signed a PPP agreement with a private developer. develop the Sekondi SEZ.
For Africa, the future of SEZs after COVID likely lies in the success of the AfCFTA. There is therefore a need for Africa to look inward and be self-sufficient in using countries’ competitive advantages to produce goods that can be traded in Africa.
There is also a need to focus more on the development of local enterprises and increasing the local production base of raw materials in the development of SEZs. The development of the local commodity production base is crucial to meet the requirements of the rules of origin in order to be able to trade under the AfCFTA.
I can confidently say that Ghana as a whole, the Ministry of Trade and Industry and the GFZA in particular, is on track to put in place the policies needed to take advantage of the AfCFTA agreement. This workshop will provide further clarity on the steps to be taken to make us more effective in implementing the strategies at the Secretariat level.
Based on the concept note of the workshop, it aims to present the main lessons learned from the development of SEZs in Africa, the implementation of targeted policies on SEZs, the key factors that contribute to the success of the zones across the assessment of key successes in the continent, and integration of the Sustainable Development Goals (SDGs) into SEZ policymaking with a focus on labor and environmental practices. The workshop should also serve as a platform for discussion on regional integration and the implementation of the AfCFTA,” he added.