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Can Shenzhen’s Special Economic Zone Miracle Offer Insights to Africa’s Economic Recovery?

File image of downtown Shenzhen by Darmau Lee on Unsplash.

The COVID-19 pandemic has affected every country and its citizens, though it has not impacted them equally, particularly those in the African continent. Makhtar Sop Diop, a Senegalese economist, and politician who has been serving as the Managing Director of the International Finance Corporation since 2021 wrote that Africa’s future never looked brighter and more prosperous during his term as the World Bank’s vice president for Africa from 2012 through 2018. Unfortunately, COVID-19 seems to erase decades of economic and social progress in Africa overnight. “Building infrastructure, lifting up small businesses, nurturing people – these are the investments that pay off for generations to come”, he wrote in his Brookings Institution’s article.

Speaking of infrastructure, business, and investment, Special Economic Zones are considered one approach to achieving developmental goals, especially in developing countries. In fact, there are around 5,400 SEZs, more than 1,000 of which were established in the last five years. According to UNCTAD 2019, “Special Economic Zones are widely used across most developing and many developed economies. SEZs go by many different names (including free zones, export processing zones, and industrial parks), and come in many varieties.” They are defined as geographically delimited areas within which governments facilitate industrial activity through fiscal and regulatory incentives and infrastructure support with the aim to boost investment, export, and job growth. Notable SEZ project in Africa includes Mauritius and some partial initial successful projects in Kenya, Madagascar, and Lesotho. However, most of the SEZ projects in Africa fail to attract significant investment, create job opportunities, and promote export, not to mention facilitate industrial structural transformation.

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