Long-been promoted as an efficient means of increasing foreign direct investment, facilitating commerce and creating employment in both developing and developed countries, the number of Special Economic Zones (SEZ) in Africa is growing, particularly in West Africa, which hosts the second largest number of free zones in Africa (24%).
Among the MSGBC countries, Senegal and The Gambia have implemented SEZs to attract foreign investment, and the success of these models is already showing.
Senegal’s SEZs aim to construct new hubs to accelerate economic growth, rebalance trade, give investors developed land, produce direct and indirect job possibilities, draw in foreign direct investment, and support domestic value creation. The country now has three SEZs: Diass, Diamniadio and Sandiara. The first two zones are mostly focused on textiles, food and the production of other goods. However, the most recent one, Sandiara, a municipality of 100 hectares located 105km from the capital city Dakar, is attempting to attract enterprises in the manufacturing, logistics and energy sectors.
In an interview with Energy Capital, & Power (ECP) – the organizer of the upcoming MSGBC Oil, Gas & Power conference -, Aliou Gning, 1st Deputy Mayor of the Municipality of Sandiara, explained that “We started building an industrial hub in Sandiara in 2014, and in 2017, when the law on SEZs was enacted, we changed the status of the zone to make it more appealing to foreign investors.”
Senegalese President Macky Sall reiterated these sentiments, stating that “investors choosing the Sandiara Free Zone are provided with an array of business set-up services that streamline their registration and licensing processes, as a complementary offering to the overall value proposition of the industrial zone.”
The SEZ not only helps investors but it also benefits Senegal. Sandiara, which is still being built, now contains 15 firms and 350 permanent employees. However, many more enterprises are springing up, and the municipality anticipates that the project will eventually employ more than 20,000 people. Among the conditions for joining the zone are earning 50% of income from exports or import substitution.
“Senegal has a negative trade balance, and implementing SEZs is a good way to boost exports and reduce the trade deficit,” Gning stated, adding that, “We have received a large number of applications, and we intend to build a power station as well as a refinery to handle first gas and first oil.” Senegal may be one of the first nations in West Africa to establish SEZs, but others are gradually following suit. The Gambia began development of the GIETAF SEZ in 2018, a joint venture between TAF Africa Homes Global and The Gambian government via The Gambian Investment and Export Promotion Agency. The 10-year project intends to be one of West Africa’s largest SEZs, creating around 50,000 direct and indirect jobs. It is the single greatest investment in The Gambia’s history, totaling $300 million. President Adama Barrow fully supports the initiative and reaffirmed the government’s commitment to fostering a business-friendly environment to invite investors to support national growth.
Meanwhile, Mauritania, which is developing its own industrial zone in the south of Nouakchott to assist the expansion of its energy industry, is also considering the establishment of a SEZ. According to Moustapha Bechir, Director General of Hydrocarbons at the Ministry of Petroleum, Energy and Mines, who recently spoke with ECP, “Mauritania’s government is studying several options to incentivize investors, and the SEZ model has the potential to attract foreign capital and boost economic growth.”
The respective energy and petroleum Ministers of Senegal, The Gambia and Mauritania will attend the upcoming MSGBC Oil, Gas & Power 2023 exhibition and conference in Nouakchott from November 21-22. They will discuss the implementation of governance policy and economic tools, including SEZs, that aim to maximize the benefits of first gas for the region.