Across Africa, governments are increasingly looking to Special Economic Zones (SEZs), as engines of industrialisation, job creation and economic transformation. When done right, SEZs can attract investment, boost exports and create employment opportunities.
Yet, many African SEZs have been falling short due to poor planning, weak governance, and lack of integration with local economies. This begs the question: how can Africa best make SEZs work to ensure sustainable growth, economic stability, and the creation of flourishing cities?
One of the biggest determinants of a successful SEZ is its strategic location and supporting infrastructure. SEZs should ideally be positioned near ports, highways and major urban centres to facilitate trade and logistics. Take Morocco’s Tanger Med SEZ, for example, which thrives due to its proximity to one of Africa’s largest ports, allowing seamless access to European and global markets.
For SEZs to work in Africa, governments must invest in reliable roads, railways, electricity and internet connectivity to attract serious investors. Organisations like the Charter Cities Institute work with governments and infrastructure-focused partners, like AfIDA, to ensure that this key component not overlooked.
A major pitfall for African SEZs has been policy instability and excessive bureaucracy. Investors need clarity and confidence in a country’s legal and regulatory frameworks. Governments should provide predictable tax incentives, encourage public-private partnerships (PPPs), create simplified business registration processes, and outline clear land policies to encourage long-term investments.
Countries like Ethiopia’s Hawassa Industrial Park have demonstrated how clear government commitment can attract foreign direct investment (FDI), particularly in manufacturing.
Not all zones should follow the same blueprint. The most successful ones specialise in industries where they have a competitive advantage. The continent should focus on high potential industries such as agribusiness, technology, automotive manufacturing and logistics.
Rwanda’s Kigali Innovation City, for example, is designed to be a hub for tech and digital services, while Kenya’s Konza Technopolis aims to position itself as Africa’s “Silicon Savannah.” Aligning SEZs with a country’s strengths will maximize economic impact.
SEZs cannot thrive on government efforts alone. Collaboration between governments, private investors and development partners is crucial for funding and expertise. The success of China’s SEZs in Shenzhen was partly due to heavy private sector involvement in financing and management.
The continent needs policies that encourage PPPs and private sector participation in SEZ infrastructure and operations, ensuring sustainability and efficiency.
These trade zones are only as good as the people working in them, so without a skilled workforce, even the best-planned SEZs will struggle. Beyond basic education, the continent should continue to emphasise on technical and vocational training programmes that align with needs of emerging industry.
Partnerships between SEZs and universities, polytechnics, and technical institutes can help develop a pipeline of talent that meets investor demands. One such example is the Africa Urban Lab, in Zanzibar, as well as the African School of Economics, with campuses across the continent; both offer new city builders “frontier learning” opportunities.
A common mistake in all SEZs is that they become isolated, benefiting only foreign investors while neglecting local businesses. Successful SEZs should promote local supplier networks, value chain development, and technology transfer to ensure that surrounding communities benefit.
In contrast to Asia, where SEZs have helped lift millions out of poverty, some African SEZs have struggled to create widespread economic benefits. This must change.
Corruption and mismanagement have been the downfall of many ambitious SEZ projects. Strict governance structures, transparent investment policies and independent oversight mechanisms are needed to ensure funds are used effectively.
Without proper checks and balances, SEZs risk becoming another failed economic experiment.
Beyond the challenges, there are limitless opportunities like taking a lead in sustainable SEZ development. This could be investments in renewable energy, waste recycling, eco-friendly transportation and sustainable manufacturing practices. Creation of “Smart Cities” can help as well, and organisations like the Smart Cities Council provide leadership, training, partnerships, and more to increase the likelihood of success.
With the African Continental Free Trade Area (AfCFTA) now in effect, SEZs have a chance to position themselves as regional manufacturing and trade hubs. Rather than competing in isolation, African SEZs should take advantage of the continent-wide market of 1.3 billion people.
This means focusing on products that can be exported across Africa, reducing intra-African trade barriers, and strengthening cross-border partnerships.
The lessons from successful trade zones around the world show that with the right approach, SEZs can be a game-changer for Africa’s economic future but only if they are done right.
The writer is Head of Communications for Charter Cities institute and the New Cities Summit
