Editorial: EPZA promising figures should deliver results

On Wednesday, Export Processing Zones Authority’s (EPZA) director general Col Joseph Simbakalia revealed some interesting statistics regarding new investments they have registered recently.

That the EPZA attracted 20 new investment projects worth $300 million (Sh670 billion) between June and September this year, should give Tanzania reason to celebrate. Often, the higher the number of new investment flows is proof of investors’ confidence in that particular economy. Besides, according to him, EPZA had a total of $1.469 billion capital investments by the end of 2016.

These figures look very promising but it is astonishing that they have not helped Tanzania to increase the value of its manufactured goods’ exports. Bank of Tanzania (BoT) figures show that the value of manufactured exports dropped to $811.4 million in the year ending May, 2017 from $1.5 billion in the year ending May 2016.

It must be recalled that the rationale behind EPZ, Special Economic Zones (SEZ) or Free Trade Zones (FTA) is to promote industrial and commercial exports.

It should be noted that firms that operate under the arrangements enjoy various incentives in terms of tax exemptions so that the forgone amount could be recouped through increased foreign exchange earnings, job creation, attraction of foreign direct investment into the host country, introduction of new production technologies and through the generation of backward linkages from the EPZ to the domestic economy among others. Economists show how EPZ systems have significantly benefitted countries like China, South Korea and Indonesia.

Unfortunately, this is not the case in Tanzania and this begs for questions like: Where do Tanzania’s exports – manufactured in EPZs – go? Where did the country get it wrong? Responses to these questions will help the country to start adding up Mr Simbakalia’s numbers.