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African economic zones need to connect to global value chains – Bennis

With 203 operational special economic zones, (SEZs) across the continent, and 73 completed projects, African economic zones need to urgently connect to global value chains (GVCs), especially in the wake of the current AfCFTA agenda. Secretary-General of the African Economic Zones Organisation (AEZO), Ahmed Bennis in this interview with MARTIN-LUTHER C. KING, spoke on the AEZO’s November 2021 annual meeting in Accra, Ghana. Bennis also said AEZO, which has a membership of 42 countries, also needs to be supported to accelerate members’ performance in catalysing Africa’s industrial transformation. Excerpts:

How would you describe Special Economic Zones in Africa?

Economic zones are institutions aimed at attracting investment and are an important instrument for a country’s development. They are geographic areas with clearly established borders designed to facilitate industrial activity and trade logistics and can be either multi-industry or sector-specific, depending on a country’s level of industrialisation. Features of economic zones include streamlined procedures and financial benefits within the territory, such as a duty-free designation, relief from tariffs and separate Customs regimes. There are various types of economic zones, including special economic zones (SEZs), free trade zones, free zones, export-processing zones, industrial parks, bonded logistics parks and urban enterprise zones, all of which cluster infrastructure to allow companies to leverage economies of scale. Many African governments consider economic zones a crucial component in attracting foreign direct investment (FDI), facilitating industrialisation, creating jobs, procuring technological and innovative know-how, and connecting with global production networks, thereby both directly and indirectly contributing to widespread economic growth.

Kindly give us details on what AEZO is and its role on the African continent?

Africa Economic Zones Organization (AEZO) is a continental association of leading public and private institutions in charge of the development, management and promotion of Economic Zones in Africa. The Africa Economic Zones Organisation (AEZO) was established in November 2015 by Tanger Med, with the objective to strengthen relationships among African economic zones, bringing together more than 82 members representing 42 countries. Through a comprehensive action plan, we contribute to expertise sharing, capacity building, duplicating best practices and connecting with international business networks. We cooperate closely with a large number of international institutions, such as: African Union Commission (AUC), AfCFTA Secretariat, UNIDO, UNCTAD, UNECA, WTO, AfDB World Bank, International Trade Center and others. Moreover, AEZO works to foster collective knowledge-sharing and connects members with global business networks and international actors. The organisation helps economic zones commercialise their operations by deploying project initiatives; implementing standards and best practices; launching go-to market activities; mastering in- and out-flow management; and promoting business and investment opportunities to private players. AEZO offers support to its members by providing a one-stop shop; strengthening capacity-building; hosting regional workshops, training sessions and get-together meetings; and, providing a number of online services. The last of these includes a knowledge center with reports and presentations; the AEZO Atlas database for macroeconomic reporting, data assessments, statistical analysis of key markets and partners, and information on investment and regulatory frameworks of countries, including laws, Customs procedures and fiscal incentives; and AEZO Connect, an exchange platform to facilitate information sharing between managers of economic zones.

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From an African perspective, has AEZO seen a good growth of Special Economic Zones within the continent?

Since its inception, SEZs have given a significant boost to FDI flows, creating an attractive investment condition, and supporting job creation: Over the past 5 years, 60 million jobs have been created in agro-processing, industrial fields, and services. African countries began to leverage SEZ in the late 1990s and early 2000s, as only a few countries on the continent – such as Liberia, Mauritius and Senegal – deployed them in the 1970s. This trend has continued in recent years: in 1990 there were about 20 operational economic zones, and today, and based on this year’s edition of the African Economic Zone outlook, we counted 203 operational SEZs, and 73 projects that have been announced for completion. SEZs are also found and well developed in 47 of the 54 economies on the continent, with the highest numbers in Morocco and Nigeria. More than 146,372 hectares of land have been dedicated to the implementation of the Economic Zones facilities, with more than 50percent assigned to agro-processing in Western Africa. When analyzing the framework in which African SEZs operate, the PPP-operated SEZs are the most common business model, accounting for about 40percent of the total. The public model represents 32percent, and the remaining 28percent of the zones are privately operated. SEZ have also led to export diversification, promoting regional trade and stimulating industrial spill-over effect and clustering. They are also increasingly playing a key role in Africa’s industrial transformation and economic growth. For policy makers, institutional investors and international financing institutions, it is crucial that economic zones performance is accelerated.

Trade

What are your expectations and outlook for the 6th edition of the African Economic Zones Organisation, November 2021 Annual Meeting in Accra?

AEZO annual meeting is the flagship event of Africa Economic Zones Organisation (AEZO), bringing together governmental representatives, international experts and senior executives to offer broad-based insights on critical issues related to the development of Economic Zones of Africa. Through these get-together initiatives, AEZO provides its members a unique opportunity to develop networking, build strong business alliances and access to key international decision-makers. The AEZO 6th Annual Meeting will highlight the importance of Special Economic Zones (SEZs) in the development of global value chains in the context of African Free Trade Area (AfCFTA). The discussions will capture the following inputs for deliberations: provide evidence on the extent of Global Value Chains (GVCs) participation by African SEZs; review the impact of the COVID-19 pandemic on Africa’s supply chains to highlight both the disruptions induced by the pandemic and the opportunities that it presents; reflect the role of regional integration in strengthening regional value chains and enhancing African markets’ competitiveness; share insights on key trends driving African RVCs and shaping the operating environment for SEZs in the region; and, raise awareness on interlinkages between GVCs, AfCFTA and SEZs; and, recommend actions to be taken to connect African SEZs to GVCs at the era of the AfCFTA.

Considering that AEZO has an African and special economic view, what is the relationship, and link, between special economic zones and the African Continental Free Trade Area?

Several SEZs have played a key role in structural transformation, promoting greater participation in global value chains. However, for every successful project, multiple others have not attracted the expected investment; and, some have even ended in costly failures. African economic zones appear to have struggled for a variety of reasons. Some of these factors are particularly specific to the zones or the countries, but many of them are common to zone programs across the continent. Factors that have been identified as inhibiting zone performance in Africa include: poor quality infrastructure; poor programme planning and management; insufficient attention to trade facilitation; challenges relating to a lack of institutional coordination; and, failure to integrate zone program into broader trade and industrial strategies. The challenge, therefore, for African SEZ is not just a matter of attracting investors or joining value chains. It is about increasing the share of value-added created locally, and to moving up the chain hierarchy from simple to more complex activities. The establishment of SEZ can accordingly be viewed as part of the strategic instruments to accelerate Africa’s economic diversification that will embrace everyone including, the private and public sector, women, youth and many more. Hence, the Special Economic Zones are one of the main devices to advance the objectives of the AfCFTA in expanding the manufacturing sector, continental industrialisation, driving sustainable economic growth, job creation, investment promotion, trade liberalisation and regional integration. The AfCFTA is a business opportunity for extending SEZs activities; Africa manufacturing and supplying its own goods; creating opportunities for investment; industrialisation and promotion of intra-African trade. All these also lead to job creation in the continent. In the Africa context, in general, and within the AfCFTA, in particular, SEZs have demonstrated to be practical instruments to foster regional industrial policy and could serve as important platforms for scaling up regional production and exports, boosting intra-regional trade, promoting greater competitiveness in regional manufacturing and supporting the implementation of the AfCFTA. We are confident that EZ can help in rethinking the economic model to be developed in the continent, help us rely on our resources, generate internal growth, transform our raw material, produce locally and develop a regional value chain complementarity between countries. Within the African SEZ community, we need to develop a new process for the supply chain, to support the vision of creating one African Market under the African Continental Free Trade Agreement.

Who will be attending this event?

AEZO 6th Annual Meeting will take place on November 25th at the headquarters of the African Free Trade Area Secretariat, in Accra, Ghana under the theme ‘Connecting African SEZ to global Value Chains at the era of the AfCFTA’. This year’s edition will be held in a hybrid format, with physical meeting, rigorously in compliance with COVID-19 standard recommended by the WHO; and, virtual retransmission giving the opportunity to thousands of participants to follow live the deliberation and interact with C-Level representatives from economic zones, investments and promotions agencies, leading financial institutions, and key experts from international organisations. I take this opportunity to extend special thanks to our partners: the AfCFTA Secretariat, the Ghana Free Zones Authority, the AfDB, the UNIDO, UNCTAD, UNECA and Oxford Business Group for their involvement, commitment, and contribution to this event.

Kindly tell us about yourself?

Ahmed Bennis is a result-driven and accomplished individual with extensive experience in implementing large investment projects in ports, as well as industrial and logistics sectors. He has demonstrable expertise in the deployment of successful business development strategies with strong focus on profitability, cost optimisation and strategic partnerships. Currently, Ahmed Bennis, oversees the development, implementation, and management of business development, marketing and communication policies within Tanger Med Group. In particular, he is in charge of driving and supervising the management of critical projects as well as maximising the group’s performance and return on investment. He has expertise in the establishment of strategic partnerships; and, holds leadership roles in international organisations such as International Maritime Organisation, UNCTAD, UNIDO, WTO, African Union. Prior to his current position, Ahmed Bennis led the international business development that consist of designing investment and partnership agreements with several ports and government authorities in Africa. He was also appointed director of economic zones in 2011, where he was in charge of the implementation of Tanger Med Automotive Industrial Platform hosting the Renault Nissan car plant and a comprehensive tier1-and ecosystem. Ahmed Bennis began his professional career in 2001, in IT and Financial services at NEC computers International in Paris, France. Then he moved to Luxembourg for a business development position at FlexFinance – Oracle Group, prior to joining Thomson Reuters in Dubai in 2007, where he was appointed to drive sales and presales activities, providing business solutions and consultancy services for large financial institutions in Middle East and Africa. Ahmed Bennis graduated from HEC Business School and has strong business communication skills in English, French, Arabic, Italian and Spanish.

Do you have any final words?

Yes; briefly. On Tanger Med, which is a global logistics gateway located on the Strait of Gibraltar. We are connected to more than 180 ports worldwide with handling capacities of 9 million containers, exports of 1 million new vehicles, transit of 7 million passengers and 700,000 trucks on an annual basis. Tanger Med constitutes an industrial hub for more than a thousand companies representing a yearly export turnover in excess of US$8.8 billion in various sectors such as automotive, aeronautics, logistics, textile and trade. Recently, Tanger Med Port has been ranked the largest port in the Mediterranean and in Africa.

 

 

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