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Bulawayo reindustrialisation ongoing

by Staff reporter
22 May 2022 at 08:27hrs | Views
The Zimbabwe Investment and Development Agency (ZIDA) has licensed three companies under the Special Economic Zones (SEZs) initiative in Bulawayo but there are growing concerns implementation is moving at a snail's pace.

In 2018, business appealed to the then-Zimbabwe Special Economic Zones Authority (ZIMSEZA), which has since been subsumed into ZIDA, to remove bottlenecks that frustrate implementation of SEZs.

The concept is meant to offer special conditions and incentives to enhance international competitiveness as well as foster industrial growth and development.

During a recent tour of Bulawayo industries by The Sunday Mail Business, some stakeholders said they hope implementation will be speeded up.

"The challenge that has slowed down the implementation of the Special Economic Zones is that when ZIDA came in, it changed the action plan that the Bulawayo City Council (BCC) had come up with and because of some bureaucracy, everything is now on hold," said Mr Cornelio Sunduza, who was formerly in the Bulawayo SEZs steering committee.

Bulawayo's industrial sites Belmont, Donnington, Kelvin and Westondale have been designated as SEZs, while a new industrial park on a virgin piece of land in Umvumila will be developed.

Shepco BMA Fasteners, Arenel (Pvt) Ltd and Chingases (Pvt) Ltd are the three entities that have so far been licensed.

It is believed that the initiative will give impetus to the re-industrialisation drive of a city that was once Zimbabwe's industrial hub, where over 20 000 people were employed.

Zimbabwe National Chamber of Commerce (ZNCC) immediate past vice president Mr Golden Muoni said progress was worryingly slow.

"For over a year now, there has not been any progress regarding the implementation of the SEZs in the city. For example, we have this area called Umvumila, no development is taking place there," he said.

However, consultant-senior director projects at ZIDA Ms Silibaziso Chizwina said the development of SEZs is a long-term process that requires plans that cover infrastructure and financing as well as investment promotion strategies.

"Depending on the model and size of a zone, it can take up to three years to plan for the development before actual work on the ground commences.

"The agency is currently conducting a monitoring and evaluation exercise to ascertain the progress made and challenges being faced by SEZ-licensed companies," she said.

"The exercise would assist in getting information on the value of incentives that the companies have managed to get for the years 2020 and 2021, and should also give the agency an update on any anomalies with regards to incentive access."

She said designation of SEZs in Bulawayo is premised on two models, with the first model entailing designation of an existing industrial area covering an estimated 3 000 hectares.

"The second was the designation of a greenfield for the purposes of developing a new industrial area. The zones were gazetted and fall under the Bulawayo City Council as the implementing agent in line with the current regulatory framework."

The designation of the zone, she added, is envisaged to revive Bulawayo as the engineering and industrial hub of the country.

"In this zone, there are currently three licensed ‘investors' or companies, with an additional company having submitted its application for licensing.

"ZIDA is currently working on the operational model for this ‘brownfield' project but still licenses any of the existing businesses in the zone should they apply and make the relevant justifications for this."

It is believed that a number of existing companies in Bulawayo's brownfield zone are not aware of the designation status.

But ZIDA's SEZ unit will soon meet with BCC and companies in the brownfield corridor to clearly outline opportunities that exist in the zone as well as how companies can apply for licensing.

On the Umvumila SEZs, which cover an estimated 179 hectares on the Bulawayo-Victoria Falls Road, Ms Chizwina said: The zone is not yet developed and hence not ready for investors to start operating within the zone, as the relevant feasibility study reports have not yet been conducted."

Under the current regulatory framework, the process of developing the zone is led by the land owner or developer, which is BCC.

"The agency has been informed that there is an ongoing process of identifying a developer for Umvumila SEZ, and has received a number of inquiries from companies interested in developing the SEZ, which companies have been referred to council," said Ms Chizwina.

ZIDA will also engage the local authority to operationalise the zone through the identification and appointment of a developer. A number of challenges related to the understanding of roles and responsibilities in SEZs, as well as how they are regulated and developed were identified, she added.

Further, the agency noted that applicants did not fully understand the incentives offered and how to access them.

The investment agency is presently in the process of aligning regulations with international and regional best practice, including engaging relevant stakeholders on streamlining regulations.

The updated regulations will be shared with stakeholders through validation process early next month before being gazetted.

Source - The Sunday Mail