Special Economic Zones: An Evaluation of Lusaka South - Multi Facility Economic Zone

Abstract

Special Economic Zones are geographical areas allocated and designated to attract foreign investment, enhance industrialization, and spur economic development of the identified jurisdiction. The trade laws applicable in the Economic Zone are different from those used by the rest of the country. Investors are offered tax and several other incentives to set up businesses. It is envisaged the Zones can be effective special purpose vehicles to deliver industrialization and structural transformation. However, the aims of the Zones are achievable only if the development programme was properly crafted and correctly implemented. Worldwide, for over 50 years many countries have established and experimented the concept of Economic Zones albeit with, mixed results. This preliminary article based on an active research attempts to present the interim results of the Lusaka South Multi Facility Economic Zone (LS-MFEZ) in Zambia. There have been variations in terms of progress and performance of the projects undertaken, some of which are at the formative stage. The objectives of the study among others is to establish the reasons behind the slow uptake of investment space in LS-MFEZ. The study focuses on businesses that have invested in the Lusaka South Multi Facility Economic Zone, and those that have expressed interest to invest. This study embraces a mixed-methods model comprising qualitative and quantitative research approaches. The interim findings indicate that investors face several challenges in starting businesses in the Zone, besides the inappropriate Zone infrastructure. Furthermore, some incentives the government had put in place are not the primary factors attracting Investors.