Editor's Comment

Let’s market the MFEZs

THE Zambian Government decided to start establishing Multifacility Economic Zones (MFEZ) as far back as 2005 in an effort to create a platform for increased local and foreign direct investments to enhance economic growth, job creation and increased exports.
The MFEZs are special industrial zones for both export and domestic-oriented industries and usually have well developed infrastructure in place in order to attract and facilitate establishment of world-class enterprises for local and export production.
The MFEZs usually mix best features of the free trade zones (FTZs), export processing zones (EPZs) and the industrial parks concept in which a variety of incentives in importing capital goods and other taxes are offered to attract local and foreign investments.
It is anticipated that MFEZs will make the country more competitive through increased activities in trade and manufacturing sectors through value addition.
Such activities would have spill-over effects across various sectors ranging from agriculture, utilities, transport and processing of minerals into finished products.
But the pace at which these objectives such as increasing local and foreign direct investments and creating more industrial activities to create jobs has been somewhat sluggish.
This is why we agree with the observation by Ministry of Finance acting chief budget analyst, tax policy and revenue, Kayula Chimfwembe that there is lack of marketing of the MFEZs.
It is therefore very important that the Zambia Development Agency markets the MFEZs to boost growth of the special manufacturing enclaves to enhance economic growth.
So far, the Ministry of Commerce, Trade and Industry has created six areas as MFEZs or Industrial Parks, which include Chambishi, Lusaka East, Lusaka South, Lumwana while Ndola (Sub-Saharan gemstones exchange) and Roma have been set up as Industrial Parks.
Only the Chambishi MFEZ has hit the road running having attracted about 14 enterprises with investment outlay of over US$800 million and provided over 5,600 local jobs which are expected to increase as more investors move into the MFEZ.
But the Lusaka East MFEZ has also netted one big investment, Hitachi, which has constructed a heavy-duty equipment assembly plant on the Airport Road.
We are highlighting these few examples to show the potential of MFEZs in creating employement and helping industrialise the country, which makes it very imperative that they must be marketed.
The challenge from Mr Chimfwembe to the Ministry of Commerce, Trade and Industry to market these MFEZs is therefore very timely.
The ministry’s Zambia Development Agency, which is mandated to market the MFEZs, must step up marketing the zones to attract more local and foreign investments.
The private sector must be made aware of incentives such as zero tax on profits made by firms in priority sectors in the first five years, zero percent tax on dividends and zero percent import duty on raw materials, capital goods and machinery.
These are just a few array of the various incentives in the legislation governing MFEZs that are within the Zambia Development Agency Act No. 11 of 2006 under section 18.
But if all these attractive investments remain unmarketed, then there is no doubt that growth in the MFEZs will remain sluggish for a long time to come.
This entails that efforts to increase industrial activities will slow down which can adversely affect Zambia’s drive towards to improve value addition and creating more jobs.
Consequently, this failure to market MFEZs goes further as it slows the country’s efforts to diversify, industrialise and earn more foreign currency through exports.
We, therefore, must step up efforts to market these zones locally and abroad otherwise they will remain white elephants after spending millions of Kwacha on infrastructure development in these areas.

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