Add Your Heading Text Here
In an effort to promote industrialization and structural transformation in the national economy, the Zambian government has been implementing Multi Facility Economic Zones (MFEZs) or Industrial Parks development program since 2006 as a strategy for achieving the industrialization and job creation agenda.
The programme has resulted in the establishment of several zones that include Lusaka South Multi-Facility Economic Zone (LSMFEZ), Lusaka East Multi-Facility Economic; Chambeshi Multi Facility Economic Zone; Roma Industrial Park; Sub-Sahara Industrial Park which are all operational.
A Multi-Facility Economic Zone (MFEZ) or Industrial Park is an area or premises declared as such in which industrial and commercial activities take place, catering for both export and domestic-oriented industries. For the Zones to become fully operational, they require basic infrastructure to attract and facilitate investments. This entails establishing infrastructure such as buildings, power, water, waste disposal, telecommunication, security and other utilities, internal roads, common facilities and buildings, and for off-site infrastructure, including access roads and utility connections.
Broadly speaking, the following characteristics should define an MFEZ:
- It is a geographically delineated area, usually physically secured;
- It has a single management or administration;
- It offers benefits for investors physically within the zone;
- It has much better and more reliable infrastructure such as roads, power, and water, compared to the domestic economic environment; and
- It has a special regulatory regime and normally operates under more liberal economic laws than those that typically prevail, regarding issues such as tax incentives, land use, and foreign investment.
- The zone’s investors, often enjoy certain levels of tax incentives
The Zambian regulations allow for the establishment of both state run MFEZs as as well as privately owned zones and Industrial Parks that are managed by independent developers.
It is evident that a strong and competitive manufacturing sector is the foundation for any country’s economic growth. The implementation of MFEZs in Zambia is designed to make Zambia’s products competitive through increased activity in the trade and manufacturing sectors, which have numerous positive spill-over effects in other sectors such as utilities, transport, agriculture and services.
Much more specific objectives include;
- increased local and foreign direct investment
- increased competitiveness of locally manufactured goods
- increased job creation
- enhanced economic transformation thus stimulating industrialisation
- to catalyse technology and skills transfer
Legislation
The legislation governing the MFEZs is mainstreamed in the Zambia Development Agency (ZDA) Act No. 11 of 2006 under Section 18. In addition, the regulations and guidelines governing the declaration and establishment of MFEZs were put in place through Statutory Instrument No. 65 of 2007. Section 5(p) of the ZDA Act No. 11 of 2006 mandates ZDA to administer, control and regulate MFEZs in the Republic of Zambia. The MFEZ incentives are non-discriminatory and apply fairly to all eligible investors be it from the Republic of Zambia or outside the country.