Unlocking the economic potential of Special Economic Zones

African countries are increasingly turning to Special Economic Zones (SEZs) as a key tool in driving job creation and economic growth across the region. These designated zones, armed with incentives like tax breaks and streamlined regulations, are proving to be magnets for investments, fostering industrialization and trade. CNBC Africa's Terryanne Chebet recently sat down with Greg Binkert, Director of Mozparks Mozambique, at the Intra-Africa Trade Fair in Cairo to delve deeper into the potential of SEZs. Binkert shared insights and success stories from the Peluguan Industrial Park in Mozambique, highlighting the tremendous impact these zones can have on local economies. According to Binkert, the establishment of SEZs creates a dynamic environment that spurs growth and job opportunities. He cited the example of Peluguan Industrial Park in Mozambique, which saw a significant increase in employment from 2,500 jobs to over 8,000 jobs within a span of seven years. Furthermore, the park's internship program has been successful in absorbing vocational training graduates into permanent positions, with over 60% of interns securing jobs, including 45% women. Binkert emphasized the clustering effect of SEZs, drawing parallels to the renowned Silicon Valley in California where the concentration of industries catalyzes further growth and innovation. In terms of partnerships and collaborations, Binkert highlighted engagements with various African countries and major investors to drive the development of SEZs. Discussions are underway with countries such as Kenya, Cameroon, Guinea, and the Congo, emphasizing the need for anchor investors and major companies to anchor the growth of these zones. Binkert underscored Africa's competitive advantages in minerals and agricultural potential, stressing the importance of processing these resources locally to add value and stimulate economic growth. One of the key areas of focus for SEZs is in the processing of agricultural products and minerals within Africa itself. Binkert emphasized the need to move away from exporting raw materials and instead focus on value addition within the continent. By processing agricultural goods and minerals locally, African countries can unlock significant economic potential and contribute to the energy transition. Binkert advocated for a shift in the energy transition narrative, proposing the development of energy resources with advanced technologies in Africa rather than relying on traditional methods. He highlighted the inefficiencies of currently exporting African minerals to Asia for processing, urging for the establishment of cleaner and more sustainable energy solutions within the continent. By embracing a mix of renewables like solar energy and complementary technologies, Africa can reduce its carbon footprint and drive sustainable development. Binkert stressed the importance of investing in new power stations with cutting-edge technology to support industries like mining and processing, ensuring reliable and eco-friendly energy sources for continuous operation. As African countries continue to explore the potential of SEZs in unlocking economic growth and creating employment opportunities, strategic partnerships, and a focus on value addition will be crucial in harnessing the full benefits of these designated zones. With a shift towards sustainable practices and innovative technologies, SEZs have the power to transform economies and drive progress across the continent.