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Special Economic Zones in Africa
Table 5.1 Criteria for Selecting an Investment Location according to Surveyed SEZ Firms (Rankings by Country, Top Five Highlighted) Investment criteria
African zones
Non-African zones
1 2 3 4 5 6 7 8 9 10 11
3 2 5 8 6 4 7 1 10 9 11
Cost and quality of utilities Access to transport infrastructure Business regulatory environment Tariffs, duties, and rules of origin Level of corporate taxes Access to highly skilled labor Access to suppliers Access to low-cost labor Availability/cost of land and buildings Access to local and regional markets Access to technology Source: SEZ investor surveys.
deeper sources of competitiveness, and their responses suggest they are likely to be footloose. Respondents from the non-African zones surveyed also identified utilities and transport as among their most important investment criteria. However, they place much greater emphasis on access to labor of both the low-wage (ranked as the most important criterion by investors in the non-African zones and eighth by investors in the African zones) and high-skill variety, and are much less concerned with tariffs and market preferences. Across countries, criteria were not ranked significantly or consistently differently by foreign and domestic investors. However, in several countries, local investors ranked access to technology as significantly more important than did foreign investors; this most likely reflects the expectation of benefiting from technology spillover effects from multinationals. In the sections that follow, we assess the investment climate performance of the African SEZ programs on the five most important issues identified by investors. Our hypothesis is that if African zones can ensure a high-quality business environment relative to these issues, they should be successful in attracting and retaining investors and should have improved outcomes in terms of employment and exports.3
The SEZ Investment Climate—Utilities Access to reliable, competitively priced utilities4 was ranked as the most important investment consideration by firms in African SEZs. Where