Africa now hosts more than 240 special economic zones across 38 of the 55 AU member states. Designed well, they can be one-stop platforms for export-oriented SMEs, linking them to anchor investors, infrastructure and the AfCFTA single market.
Where Africa's SEZs stand
SEZs offer firms regulatory, fiscal and infrastructure advantages, together with streamlined administration, to attract investment and promote trade. Africa's first zones were recognised in Mauritius in 1970, followed by Ghana and Senegal. UNCTAD estimates that the continent now hosts more than 240 SEZs in 38 of the 55 AU member states, and many governments are establishing new zones or redesigning existing ones to improve performance.
Why SEZs matter for SMEs
SMEs account for a large share of employment, innovation and growth across the continent. SEZs can give them what is hardest to secure independently: serviced land and factory space, reliable utilities, access to finance and technology, and links to anchor investors and export markets. Zones such as Ethiopia's Mekelle Industrial Park and South Africa's Coega SEZ show how infrastructure, training and supplier development programmes can draw smaller firms into larger value chains.
The AfCFTA strengthens the case. A single market of 1.3 billion people and a combined GDP of US$3.4 trillion gives SME suppliers based in zones a far larger addressable market than their national economies alone.
Design principles
Strategic alignment. Zones should serve national and regional development strategies, with a clear focus on regional integration and value addition.
Local linkages. Policies should actively connect zone investors with local SMEs as suppliers and service providers, and spread the benefits across regions and sectors.
Export orientation. Infrastructure and support services should be built around attracting investment and facilitating trade.
Sound regulation and ESG. A clear, transparent regulatory framework builds investor confidence. Renewable energy, environmental management and social inclusion should be designed in from the start.
Support for SMEs. Governments and development partners should provide technical assistance and finance so that SMEs can meet the standards of zone-based value chains.
This brief is adapted from "This is how special economic zones can boost small businesses", first published in Business Day on 16 March 2023.