The Citizen (Dar es Salaam)

Africa: Better Investment Climate Needed, Expert Tells Africa

African countries should put their emphasis on improving their legal and regulatory framework and infrastructure to attract and retain investments in Special Economic Zones (SEZs). The call was made by Dr Thomas Farole from the International Trade Department for World Bank, during the African Free Zone Association (AFZA) convention 2011 held recently in Dar es Salaam.

"Improving strategic planning and transparent, integrating approach linking to trade gateways, addressing infrastructure gaps inside and beyond the gates will be starting points of getting better the potential to attract and retain investments in SEZs in the continent," he said.

Mr Farole noted that the continent must also improve utilities, road connections and port improvements, develop soft infrastructure and public goods, zone management through stronger and more consistent government policy support.He added that institutional improvements such as authority and coordination and private sector participation should also be given the top priority.

The World Bank official stated that the reason to put interest in SEZs in Africa is because of the potential to address key constraints to investment and job creation through infrastructure development.However, he pointed out that there is a need for better understanding of performance and the factors that contribute to sustainable success instead of failures.

According to him, linkages are critical to achieving dynamic benefits of Special Economic Zones, saying worldwide, and zone struggle to shift from being enclaves to integrated contributors of wider economic growth.Therefore, he stressed the need to promote domestic investment and open up potential for exchange between zones and local markets, adding that improving linkages require actions outside zones alone.

"Given the regulatory and wider investment climate constraints to competitiveness in Sub-Saharan Africa (SSA), using Special Economic Zones as reform pilots is a major missed opportunity to date," said Mr Farole.However, he was of the view that African governments' willingness to deliver on piloting reforms through zones might be a useful litmus test as to whether the commitment and capacity exists to follow- through with a successful zone programme.

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