05/05/ 2011

The Special Economic Zones (SEZs) operations have come under the Export Processing Zones Authority (EPZA) following the passing of the Bill for the Economic Zones Laws (miscellaneous amendments) Act of 2011 by parliament. Due this change, the Export Processing Zones Authority (EPZA) will now be overseeing both the EPZ program and the SEZ program.

Members of Parliament (MPs) approved the bill during the just ended third parliamentary session in Dodoma after debating the proposed amendments of the EPZ and SEZ Acts. The amendments sought to rationalise the roles and functions of EPZA in relation to the two schemes.

Before the amendments, the laws provided for EPZ and SEZ as two distinct schemes, each with own regulatory body.

"The bill envisages amending the EPZ and SEZ systems to empower the EPZA to oversee the operations of SEZ as well," The Industry, Trade and Marketing Minister, Hon. Cyril Chami said while moving the bill before the house in Dodoma; arguing that the SEZ law required establishment of a separate Authority to manage the programme and that after careful analysis, it was found that in most cases the two programs were overlapping and hence the need for implementation by one Authority.  

Dr. Chami charged that the amendments also aspired replacing the current ‘Council’ that govern EPZA with a “Board of Directors”, comprising mostly bureaucrats and representatives from the private sector.

The envisaged board will comprise the Minister responsible for industries who shall be the chairman, Permanent secretaries in the ministries responsible for finance, water, minerals and local government, and the institutions governing the private sector, he said.

Debating the bill, MPs described the bill as highly beneficial to the national economy, saying the projects under EPZ and SEZ will have far reaching multiplier effects to the economy and social well-being of wananchi.

Mr. Titus Kamani (Busega -CCM) said: "Through EPZ and SEZ programmes, other related businesses -- hotels, shopping malls, transportation and banking -- will expand, creating thousands of jobs to our people."

He proposed that areas at the country's borders be given priority in EPZ/SEZ investments, to explore the market potentials in the neighbouring countries. "We have potential markets in Kenya, Uganda, Rwanda... these are the key markets to focus on."

Engineer Stella Manyanya (Special Seats - CCM) decried peanut budgetary allocation to the EPZA, charging that insufficient funding was impeding execution of the good programmes for increased investments to promote exports.

Ms Suzan Kiwanga (Special Seats - Chadema) called for special incentives to encourage prospective investors to go into the interior parts of the country where infrastructure is poorly developed.

Dr. Chami defended the widely criticised incentives to EPZ/SEZ investors as inevitable, saying: "All other countries provide these kinds of incentives... if we decide not to provide them, no investor will come." He however said the ten-year tax holiday was reasonable to industrial investors that require at least four years to break even.

EPZ/SEZ programme objectives are to attract and encourage transfer of new technology; attract and promote investment for export led industrialisation; create and expand foreign exchange earnings; and increase employment and development of skilled labour.