Special Economic Zones: Gears that careened Tanzania to Prosperity

Tanzania is a country known for its plains of wilderness, situated in East Africa. With marvelous tourist locations such as the Kilimanjaro Park and the Serengeti, Tanzania offers a spectacular view and an opportunity to spot the "big five" (lions, leopards, rhinoceros, elephants and buffalos) in safaris. Tanzania is also home to a marine park where you can find the magnificent and humongous whale sharks on the prowl.

Apart from its lucrative, scenic locations and national park, Tanzania stands as the second largest economy within East Africa. The economy of Tanzania is agrarian with half of the workforce employed within the agricultural sector. Despite this, Tanzania has always struggled with ridding poverty from the nation. A high-end effort to ensure economic prosperity and encourage business setup in Tanzania, was the introduction of Special Economic Zones. The SEZs were initiated to act as catalysts for industrial and economic growth to foster export trade. It aims to nurture and incubate the development and investment in specific sectors: agriculture, mining, tourism, trade and forestry.

Special Economic Zones (SEZ) Scheme, Tanzania

Special Economic Zones (SEZs) are areas within the national borders of a country which operate under different trade and commerce laws as compared to other areas within the same nation. In Tanzania, the SEZ Scheme was launched to select several areas as Special Economic Zones and theses zones would focus on increasing investment and job creation, maintain trade balance and give rise to effective and efficient administration. Special economic zones include cover: Agricultural Free Zones, Export Processing Zones, Free Ports, Free Trade Zones, ICT Parks, Industrial Parks, Regional Headquarters, Science and Technology Parks, Tourism Development Zones and Business Incubation.

Export Processing Zones Authority (EPZA), Tanzania

With the heavy structuring that followed the SEZ Scheme in Tanzania, the Tanzanian Government then recognized the need for a regulatory body to govern and promote investment in SEZs. Tanzania's Export Processing Zones Authority is an autonomous agency under the governance of Ministry of Industry, Trade and Investment of Tanzania.

The EPZA grants the authorization for promotion, registration and facilitation of investments for Tanzania. Therefore, it can be concluded that the EPZA operates to see the development of SEZs in terms of infrastructure, business services and other provisions to the SEZ investors and issuance of SEZ licenses.

The Journey So Far

The SEZ Scheme, Tanzania, was launched in 2006. It laid emphasis on sector specific goals to be accomplished. Since its inception in 2006, the development of SEZ has advanced to greater heights. A 2016 report study, "The Role and Effectiveness of SEZs in Tanzania", by the UN University's World Institute for Development Economics Research (WIDER) stated that out of the 140 companies registered under SEZs, 45 percent are local companies, 55 percent of foreign companies. Overall SEZ employment was recorded to be 44,227. Under the umbrella of the SEZ Scheme, a crucial infrastructural development program paved a way for greater expansion opportunities. Engineering ventures emerged as a significant investors with a chunk of 46%. The follow up leader in investment was the agro-processing sector, which contributed 43%. Next up, with 8% and 3% were mineral processing and meat processing, respectively. Towards the end of the 3rd quarter of 2016, the Tanzanian government recognized six new potential areas queued up for SEZ development.  The indentified areas were ithe Coast, Iringa, Morogoro, Mbeya, Njombe, and the Songwe Regions. Tanznia's Five-Year Development Plan II (2016/17-2020/21) laid emphasis on seven other zones for SEZ development. They are Kigoma, Mtwara, Tanga, Dodoma and Manyoni, Ruvuma, and the Kurasini Logistic Centre. Since the inception of SEZs, they have generated an gigantic outcome of USD 1 Billion in foreign exchange.

Special Economic Zones of Tanzania has opened a doorway to a much larger grounds for international trade. The industrial competitiveness resulted in Tanzania through the SEZ Scheme is highly commendable.

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About the Author

narayanan@bsworldwide.com's picture

Narayanan has been a ghostwriter for the past 4 years. As an undergrad in Electrical & Electronics Engineering, he has a well-founded interest in developing sustainable solutions with innovative technology. Intellectually curious, he has a wide range of interests ranging from Renewable Energy, Electronics, Technology, Military Science, Geopolitics, International Relations, and world history.