Second, make SEZs an integral part of a long-term national development strategy in the sense that they should complement and support the country’s comparative advantages and be integrated into broader macroeconomic, growth and industrialisation policies and agendas. SEZs should have a detailed strategic planning, feasibility and master-planning process which should take into account the commercial sustainability, target markets and businesses, growth trajectory, technology innovation capability, infrastructure availability, the supply chain, the business environment, and land and labour supplies.
The zones at best should be based on business demand and not a political tool. Furthermore, there must be a predictable and transparent legal and regulatory framework in place for the zones that should be insulated from political setbacks or interferences, and that ensures the clarity of roles and responsibilities of various parties, in order to provide protection and certainty to developers and investors. Additionally, strong and long-term government commitment is required as it provides supplementary support for the zone’s success by ensuring policy continuity and adequate provision of various public inputs.
Fourth, the zones need to be focused on both exports and domestic markets and should be connected with the local economy through SME and forward/backward linkages, in order to maximise the spillover effects. Following this, a proper monitoring and evaluation (M&E) system must be established to ensure the zone programme is on track, and correct deficiencies once detected. This M&E system should specify targets around investments, exports, revenues, forex earnings, employment, local firms-productivity enhancement, diversification, skills upgrading, technology transfer etc.
An effective investment promotion strategy for attracting investors in the zones is also important and could be done through partnerships with emerging economies or newly industrialised economies. Furthermore, the government must subsidise labour training externalities for firms in the SEZs to ensure training is constantly updated to keep pace with changing business and industrial development needs. This means that when certain skills are not available locally for new industries, policies should be implemented to attract such skills from other parts of the county or overseas.
Moreso, it is important that the government ensures continuous technological and industrial learning, innovation, and upgrading so that zones can enhance productivity and sustain long-term competitiveness. This means facilitating industrial upgrading through the promotion of technology innovation/transfer and high-productivity sectors targeted toward different developmental stages. These efforts include expanding applicable R&D expenditures; strengthening university-industry linkages; and supporting targeted business incubators.
Finally, ensure zones have good off-site infrastructure (such as ports, railways, airports and highways), with good trade logistics and customs services. This entails being strategic with locating SEZs to maximise location advantages: coastal locations for export processing and logistics; areas where clusters have been formed naturally; proximity to raw materials etc.
SEZs remain the surest means through which Nigeria could facilitate industrial development, attract investments, encourage industrial clustering, and diversify sources of government revenues. Post-Oil Nigeria requires that SEZs and industrial estates are carefully developed and function optimally for economic development.
The author, Chambers Umezulike is an international development professional and Development Economics Researcher. He can be reached through chambers.umezulike@gmail.com and on Twitter via @Prof_Umezulike
