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One up for the Export Processing Zones’ Authority
2006-08-02 08:57:53
By Editor
The law that created Export Processing Zones (EPZs) in 2002 carried with it a lot of assumptions, having drawn much inspiration from the admired successes in countries such as Mauritius and Kenya.
Although the objective for establishing EPZs was valid and remains to be so, the start ups in Dar es Salaam have not delivered results to the extent that everybody had expected.
Four years down the road, it has become apparent that by just providing a number of fiscal incentives under the EPZ scheme, investors will come in droves seeking opportunities to produce for the export market.
That way, like in Mauritius and Kenya, jobs and skills will be developed, with the possibility of positive spillover effects to other sectors of the economy.
Yet, by way of oversight, little attention had been paid to the quality and reliability of services available that would enable EPZs to operate smoothly.
The EPZ law successfully created the institutional set-up, but the going had become rough from day one because of unreliable power and water supplies, undependable infrastructure, expensive administrative costs and pricey raw materials.
These bottlenecks have weakened EPZs’ capacities to operate efficiently and even reluctant to relocate some activities outside Dar es Salaam, where services are concentrated.
To cater for the export market, any given enterprise has to be able to tape economies of scale throughout its lifespan.
Any interruptive factor will disturb EPZs’ goals, in the end, closing doors, making the whole scheme useless.
It is encouraging that the EPZ Act, which was earlier this year amended to provide for the establishment of the Export Processing Zone Authority, is now well in the right track.
This Authority has the noble role to ensure that the structural impediments that for long prevented EPZs performance are no longer in place.
For instance, it is the duty of the authority to seek permanent solution to erratic power and water supplies to EPZ centres by forging an effective liaison with the responsible service providers with a view to ensuring systems are stable.
A similar institutional strengthening strategy could as well be extended to the recently formed Special Economic Zones (SEZs) for they are most likely to face the same obstacles in the running of their businesses.
The beginning of any attempt is tough, but in the long run solutions are found in the face of challenges which clear the way forward.
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