142
Special Economic Zones in Africa
Figure 5.3 Relationship between Access to Onsite Customs Clearance and Average Import Clearance (Days) 20
TZ
avg. days to clear imports
18 16 14 12 R2 = 0.7504
LS
10
GH
8
KE
6
SN
4
HN
NG
DR BN
2
VN
0 0
20
40
60
80
100
120
% respondents indicating access to onsite customs clearance Source: SEZ investor surveys.
The SEZ Investment Climate—Business Regulatory Environment The business regulatory environment encompasses a wide range of issues that affect the ease with which firms can set up businesses and operate on a day-to-day basis. It describes the relationship between the private sector and the institutions of the state (i.e., the bureaucracy). In most countries in Africa, excessive and poorly administered regulation undermines competitiveness by raising the costs and risks of doing business, consuming substantial management time, and distorting the incentives that are the basis of competition. In particular, the process of setting up a business—including obtaining licenses and permits, preparing facilities, and getting access to utilities and other services— can be time-consuming, costly, and susceptible to rent-seeking by government officials. One of the principal nonfiscal benefits of SEZs is their potential to streamline this process; in part, by reducing the regulatory burden on companies that operate in the zone (e.g., not requiring compliance with certain regulations and not requiring certain permits and licenses). Most SEZs also try to shield investors from direct interaction with the bureaucracy by setting up one-stop services and coordinating all regulatory requirements between the investors and the various ministries and agencies.