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Oliver Kazunga, Senior Business Reporter
AREAS gazetted under the Special Economic Zones (SEZs) framework will be exempted from the application of the Labour and Indigenisation and Economic Empowerment Acts to stimulate development by attracting local and foreign direct investment.

The proposal is contained in the SEZ Bill, which is earmarked for approval by Parliament after going through second reading and public consultation processes.

SEZs are geographical areas governed by one oversight management body that offers special trade incentives to firms that establish themselves in the designated zones.

A report by the Parliamentary Portfolio Committee on Finance and Economic Development this week has recommended the proposed exemption be adopted in line with standard practice in SEZs worldwide.

This is despite some stakeholders expressing reservations on exempting the application of the labour and indigenisation regulations on the grounds that this might conflict with provisions of the constitution.

“The stakeholders expressed reservations with the exemption of the two Acts. They felt that this exemption contravened Section 65 of the Constitution of Zimbabwe, which guarantees the rights of workers and that indigenous Zimbabweans should benefit from the establishment of the SEZs,” reads part of the report.

“In line with the practice in SEZs throughout the world, the Committee recommends that the exemption should stand.”

Recently, the committee conducted public hearings on the SEZs Bill where it was recommended that the Bill was for the promotion of local and foreign investment in the country.

“In general, expectations were high that the Bill would have provided for the demarcations of the SEZs and the incentives that go with investments in the declared zones. Participants at the public hearings, particularly those in Victoria Falls, expressed great difficulty in discussing the provisions of the Bill in the absence of such information,” said the committee.

In view of the prevailing economic situation, through the Bill, the government intends to establish a SEZ authority and board.

“It was suggested that the Zimbabwe Investment Authority could be used with slightly amended responsibilities and the necessary powers to implement and service the new Bill. It was pointed out that the creation of the authority would require funding for fees and charges and that these, in themselves, might become a disincentive,” said the committee.

The setting up of SEZs is expected to go a long way in giving impetus to economic growth through enhancing Zimbabwe’s competitiveness, stimulating demand, improving production efficiency, employment generation, better resource allocation and export expansion leads for creating economies of scale.