7th World Investment Forum high-level panel on special economic zones
20 October 2021
Excellencies,
Distinguished speakers,
Dear participants,
It is my pleasure to welcome you to this high-level event on Special Economic Zones.
Firstly, I would like to thank the German Development Cooperation Agency (GIZ), and the German Federal Ministry for Economic Cooperation and Development, for their generous support to UNCTAD.
In addition to this financial support, I would also like to thank the African Union Commission for their joint support and collaboration which enabled us to prepare the “Handbook on Special Economic Zones in Africa: Towards Economic Diversification across the Continent”.
The handbook provides best practices and policy recommendations across a wide array of topics relevant to SEZs. It presents innovative work on economic transformation, diversification and integration in Africa, and draws on our work for sustainable, inclusive and resilient development in Africa. It echoes the 2030 Agenda for Sustainable Development as well as Agenda 2063 of the African Union. I am sure it will be a useful tool for policymakers, practitioners, and zones managers alike.
Africa is at the heart of UNCTAD’s work, and this includes supporting Africa in maximizing the development benefits from the African Continental Free Trade Area. The AfCFTA is an immense achievement. It is the world’s largest free trade area, uniting 1.2 billion people. The AfCFTA is set to lower trade and investment barriers within the continent, and thus improve market access, relieve supply pressures and foster more regional value chains. But economic integration is a process which takes time and does not create equal benefits for all. To ensure that both bigger and smaller economies and groups can benefit from opportunities and costs are spread fairly, supportive policies are required.
In this context, the handbook and the related technical cooperation activities undertaken, as well as our previous analytical work on SEZs, help SEZs adjust to the new trade and investment environment in Africa.
For instance, our 2019 World Investment Report presented a comprehensive analysis of SEZs and their potential role as a tool for development and upgrading. Importantly, the report presented a concept of SEZs for sustainable development – the SDG model zones. The objective of the SDG model zones is to ensure SEZs work for sustainable development and move from privileged enclaves to provide widespread benefits.
Ladies and gentlemen,
SEZs are an important tool for attracting finance, especially FDI. And FDI can promote technology transfer, skills development and productivity.
In Africa, SEZs offer a pathway for countries to provide investors with targeted incentives, streamlined regulations and better infrastructure that might not be possible at an economy wide level. They have also proved successful in attracting foreign firms that are integrated in GVCs, leading to stronger manufacturing and exports performance.
Today, there are an estimated 237 SEZs, and more than 200 single-enterprise zones (or free points) in Africa. A total of 38 of the 55 African Union Member States have SEZs, and countries without are now in the process of planning or establishing their first zones, often with the help of international partners. And some of those countries with many decades of experience in developing zones and are now transitioning towards more complex and specialized models of zone development.
However, the development impact of SEZs is not as clear. With a few exceptions, the performance of African SEZs has so far been below expectations. And this even when considering the most direct economic gains from SEZs, such as increased FDI, exports and job creation. This is why UNCTAD places strategic focus on analyzing investment, in particular in ‘’SDG-relevant’’ activities.
But the system of international production and global value chains have seen challenges, even prior to the COVID crisis. Notably: the new industrial revolution; growing economic nationalism and protectionisms; and the sustainability imperative triggered by the climate crisis.
These trends are changing the landscape while also offering opportunities. For instance, there is momentum for regionalization of value chains, and the AfCFTA can be an important enabler for this development.
In this 2021 World Investment Forum, we offer various activities related to SEZs and how to use SEZs as an engine for the SDGs. During this week, the Global Alliance of Special Economic Zones will be launched. This is an initiative championed by UNCTAD in partnership with regional and global associations of SEZs. The alliance will provide a platform to bring together financing partners, SEZ developers, host countries, and Investment Promotion Agencies, to create opportunities for networking with partners at international and regional levels for future work.
I wish you fruitful discussions and thank for your attention.
