News that in the next two weeks Government will gazette investor incentives and regulations that guide the functioning of the Zimbabwe Special Economic Zones Authority (ZimSeza), effectively bringing it into operation, is an indication of how authorities are eager to provide solutions to turn around the economy.
The economy has been buffeted by illegal economic sanctions for almost two decades and coming up with such strategies to attract Foreign Direct Investment (FDI) for all sectors might be panacea to the challenges being faced.
We therefore implore national economic managers to expeditiously implement strategic policies agreed on and those bent on creating unnecessary bottlenecks through unwanted red tape should pave way for serious players.
Zimbabwe does not need procrastinators, but sharp shooters who are always up to the task and willing to carry through President Mnangagwa’s vision of transforming Zimbabwe into a middle income country by 2030.
As such, a Government appointed board of the authority, chaired by former Reserve Bank of Zimbabwe governor Dr Gideon Gono revealed that once regulations and incentives (specifically the non-fiscal incentives) are promulgated, the authority will begin approving projects that were on hold.
“Government has publicised its desire for SEZ status for Sunway City here in Msasa/Ruwa, Victoria Falls, Bulawayo and recently Mutare and Norton,” he said.
“We will now, after gazetting the regulations and incentives, request investors in these places to submit specific projects that speak to the exact location of their proposed factories, business plans with projections of exports generation or level of import substitution, employment creation, technology transfers and introductions, proposed linkages with local industries and implementation time tables.”
In terms of the fiscal incentives that were gazetted in the Finance Act of 2017, there is zero-rated corporate income tax for the first five years of operation with a corporate tax rate of 15 percent applying thereafter; there is also duty-free importation on capital equipment.
The other fiscal incentives include a special initial allowance of 50 percent of cost from year one and 25 percent in the subsequent two years; exemption from non-residents tax on fees for services that are not locally available and zero-rated capital gains tax, among others.
In as much as this might look like the taxman giving away too much to the investors, the little lost income for the nation can be heavily compensated by massive foreign currency inflows in the long run.
This is the time that Zimbabweans shy away from greedy and implementing blinkered decisions, but make long term investments that will have far reaching consequences for future generations. SEZs provide incentives and an environment investors would ordinarily not be able to get, giving them comfort and more reason to take the plunge and invest more into projects.
The foundation, we believe, for economic transformation has been set or is in the process of being laid down, which includes reforms to improve Zimbabwe’s entire business environment.
Other objectives of the SEZ include ensuring inclusive growth emanating from the spread of growth nodes and diversified provincial offerings; to maximise the economic benefits of a given geographical location and its stakeholders and to attract more investment from the international business community.
Therefore with the SEZ, its everyone’s hope that many areas that have been excluded from the mainstream economy will become major players in many spheres of the economy.