“Special Economic Zones, Catalysts for African Industrialization” is the title of a report by the Africa CEO Forum and Okan Partners, a strategy and financial advisory service for Africa. The study, published on October 12, 2021, examined SEZ’s experiences around the world and the effects of these economic islands on the development of the countries concerned. Its authors concluded that the development of these devices aimed at stimulating industrial activity is an asset to the economy, although success is not often achieved.
RFI: Your report on specific economic zones refers to what happened in Asian countries to say that they can prove to be formidable development tools in Africa. Is not this a great program for the continent?
Amaury de Féligonde: It is indeed a comprehensive program, we are trying to show that there are a certain number of special economic zones in Africa that work, to create value, to transform agriculture, mining or other raw materials locally and especially to create jobs with tens of thousands.
Special economic zones have obviously existed for hundreds of years. But especially in the modern era, this object was born in Asia and especially in China, where the regime in the 1980s decided to change the system and began to develop special economic zones, especially in Shenzhen. China now exports 60% of these special economic zones, which represent between 20% and 25% of China’s GDP. It is therefore a great success for China, which then spread to the rest of the world. We are thinking of Maquiladoras in Mexico and Africa, we are obviously thinking of Tangier Med [au Maroc, NDLR] etc.
Can this Chinese model be transposed and copied as it is in Africa and can it get the same results?
Absolutely not and we also see that there are many failures. But we can draw inspiration from the good things that exist in this Chinese model that, beyond its flaws, has nevertheless proven to be extremely effective in China. Yes, there are a number of things that we should be inspired by, but of course we must adapt them, not only to the African context, but to the context of every country on the continent. For example, in the special economic zone Nkok in Gabon, we convert wood, because there is a lot of wood in this country, in Madagascar we make textiles, because there is a very high labor force at a reasonable cost, in Benin and Togo we have to convert cotton, because there is a lot of cotton in these countries . So we take a model that has worked, we use what is good and we adapt it to what we aim for in Africa.
Although industry has weighed less and less in sub-Saharan African economies in recent decades, can the success of these SEZs imply long-term industrialization?
It is true that the share of manufacturing in sub-Saharan Africa’s GDP fell from 17% in 1980 to 11% in 2019. We can discuss the figures, but it is really a decrease in the share of industry in African economies in general. We have a large number of special economic zone projects that have spread, especially carried out by governments that wanted to be inspired by China, but the reality is that it is quite complicated to introduce industrial policy and set up special economic zones. And this is not unique to Africa, we can clearly see that a number of European countries, such as Italy and France, have experienced a decline in their industries, especially due to competition from China.
Your report lists the failures and successes of specific economic zones in Africa. What explains the flops, what explains the success?
Among the things that have worked are, for example, Tanger-Med. It is a huge logistical success at port level. It is the first African port today. It is located in the top 40 of the world’s ports. But it is also a great success when it comes to the installation of high-tech industries, aerospace and automotive industries and it is the creation of one hundred thousand jobs. There is also Madagascar and the textile industry, Gabon and the wood industry, after banning the export of raw timber. We obviously need a very strong political will, which is based on a lot of pragmatism and which is based on comparative advantages. In other words, we must analyze which sector we should develop as a priority, we must promote public-private partnerships; it takes a whole lot of ingredients for this dish to be successful.
And what are the causes of failures?
It can be noted that out of 100 special economic zones that have been launched, 10 to 15 have worked, the rest are spinning a bit and many of them have not really started to develop yet, even ten years after they were launched. Precisely because they have not found good private partners, because the cost of electricity is extremely high, because there is no qualified labor, because the logistics remain poor., Etc. In fact, it is not enough to set up a territorial enclave with tax incentives, for companies, whether local or international, to start a store. It takes much more than that.