Professional Documents
Culture Documents
Economic Zones
Lessons and Investments from China
Bryan Robinson
African Special Economic Zones
Bryan Robinson
African Special
Economic Zones
Lessons and Investments from China
Bryan Robinson
Nelson Mandela University
Port Elizabeth, South Africa
© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer
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Cover image: Zambia-China Economic & Trade Cooperation Zone (ZCCZ) headquarters
at the Chambishi Multi Facility Economic Zone, captured by the author
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The journeymen and women
vii
viii PREFACE
I believe the success of writing a book that covers such diverse and
complex issues, requires the author to acknowledge their own limitation
of knowledge and reach out to others who can guide them along the
long journey to publication. This was certainly the case in writing this
book and I am grateful to a great number of people who enthusiastically
supported me along the way.
My co-author of a book published on China’s engagement in Africa,
entitled ‘China’s Impact on the African Renaissance—The Baobab
Grows’, Prof. Kobus Jonker, not only taught me a great deal during the
writing of that book, but has also been a mentor and friend to me over
the years since I have been affiliated to Nelson Mandela University Busi-
ness School. The number of times I have ‘popped’ into his office are too
numerous to mention, yet he has always shown enthusiasm for my ideas
and challenged my preconceptions. I owe a great deal of gratitude for his
assistance and influence.
For a book of this nature to be balanced in viewpoints, it was of course
necessary to obtain a Chinese perspective on the issues raised, and to
access Chinese initiated SEZs and visit and speak to Chinese investors
in these zones. H.E. Ambassador Lin Songtian of the Embassy of the
People’s Republic of China in the Republic of South Africa has provided
the opportunity to visit China and visit the city-sized SEZs in China, as
well as opened numerous doors throughout Africa through the respective
Chinese Embassies in those countries in which research was conducted.
ix
x ACKNOWLEDGEMENTS
Mr. Zhengze Hu, support staff of the Embassy, assisted in liaising with
the initial contact with the other Chinese Embassies in Africa to obtain
access to their zones. These embassies have in turn gone out of their way
to assist me in accessing information and to gain access to the respective
Zones and companies. Other Chinese individuals who contributed to the
success of the book include the following: Mr. Zhang Pengcheng of the
Embassy of the People’s Republic of China in the Federal Democratic of
Ethiopia who kindly provided assistance in accessing some of the many
SEZs in Ethiopia including the Eastern Industrial Park, where Ms Dong
Lingpei provided insight and guided me through the Zone itself, intro-
ducing company representatives, and viewing the manufacturing facilities
of some of the larger Chinese investors.
In the Federal Republic of Nigeria, Wang Yichen of the Embassy of the
People’s Republic of China facilitated visits to both the Lekki Free Zone
and the Ogun-Guangdong Free Trade Zone, both of which are situated
just outside the city of Lagos. My Denny Gao, Manager of Marketing
of the Lekki Free Zone Development Company hosted me for the day,
introducing me to the Managing Director of the Zone, Mr. Xigong
Huang; Mr. Oyewole Adegoke the General Manager of Marketing; and
Elvis Njoku, the Human Resources Officer, all of whom provided valu-
able insights into the operations of the Zone. Jesse Gao and Daniel Che,
both Assistants to the General Manager of the Ogun-Guangdong Free
Trade Zone, hosted me for the day at the Zone. I was fortunate enough
to have also met some investors in the zone who shared their thoughts
with me, such as Mr. Leo of Hewang Packaging and Printing, and Mr.
Xianli Zhang and Mr. Eric Xu (in a later follow-up VoiP call) of Green
Power Utility.
I was warmly welcomed when I visited the Chambishi Multi-Facility
Economic Zone, a division of the Zambia China Economic & Trade
Cooperation Zone (ZCCZ). Mr. Liao Zibin the Vice Chairman and
General Manager of ZCCZ, Steven Lindunda, Zhenni Liu and Alan, all
from the Zone, graciously entertained my many questions, and guided
me through their impressive head office and the zone itself, where I also
met some zone investors including Mr. Zhang from Pingan Auto and Mr.
Liu of Sonomine Service Station.
Special mention of Rosanna Ma is necessary. Apart from assisting with
logistical arrangements for my field research trip to China, we spent much
time in Beijing, and Rosanna went out of her way to investigate my areas
of interest and share her findings and thoughts with me. This Chinese
ACKNOWLEDGEMENTS xi
At the outset, I would like to explain that I have taken a very broad
approach to the definition of a Special Economic Zone. In actual fact,
the definition has very few delimitations.
Claude Baissac (2011) echoes the array of economic zones, explaining
that the multiplicity of names and forms of zones are due to numerous
factors, including
(1) the need to differentiate among types of zones that display very real
differences in form and function; (2) differences in economic terminology
among countries; (3) zone promoters’ desire to differentiate their product
from those of the competition; and (4) the consequences of multiple
translations. Definitions vary across countries and institutions, and evolve
continuously as new types of zones are developed and older types disappear
or are adapted. Any attempt at a comprehensive definition of economic
zones must be sufficiently broad to encompass the bewildering array of
past, present, and future zones, and yet sufficiently precise to exclude those
that do not display the essential structural features that make a zone a zone.
Sustainable development
Protocol 1: Protocol 2: Protocol 3: Protocol 4: Protocol 5: Protocol 6: Protocol 7: Protocol 8: Protocol 9: Protocol 10: Protocol 11: Protocol 12:
Phased Ease of Preferential Innovation Favourable Phased Modern International Addressing Social Export Diversified
approach business policies & learning Investment approach service cooperation short- system orientation industries
Climate delivery comings
Reference
Baissac, C. 2011. Brief History of SEZs and Overview of Policy Debates. In
T. Farole (Ed.), Special Economic Zones in Africa: Comparing Performance
and Learning from Global Experience. Washington: The International Bank
for Reconstruction and Development / The World Bank. © World Bank.
[Online]. Accessed from: http://documents.worldbank.org/curated/en/996
871468008466349/pdf/600590PUB0ID181onomic09780821386385.pdf
(accessed 23 April 2020). License: Creative Commons Attribution License
(CC BY 3.0 IGO). (http://creative-commons.org/licenses/by/3.0/igo/).
Contents
Part I Context
1 Africa’s Economies 3
1.1 Africa: A Continent of Contrasts 3
1.2 The African Tree of Organic Growth 10
1.3 The State of African Economies and Economic
Growth Prospects 14
1.4 Global, Regional and National Efforts to Stimulate
Sustainable Economic Development in Africa 16
1.4.1 International and Regional Institutions
for Development 16
1.4.2 National Development Finance
Institutions 22
1.5 Foreign Direct Investment 26
1.6 What Is Needed to Shift Africa Towards Sustainable
Development? 27
References 32
2 China’s Surge in Growth Facilitated by Special
Economic Zones 35
2.1 Special Economic Zones: A Key Development Policy
Instrument 38
2.2 Shenzhen Special Economic Zone 43
2.3 Chapter I—The Initial Phase: 1978–1992 46
xvii
xviii CONTENTS
Index 329
List of Figures
xxv
xxvi LIST OF FIGURES
xxxi
xxxii LIST OF TABLES
Context
CHAPTER 1
Africa’s Economies
Africa. A continent blessed with rich and abundant natural resources and
a vibrant and diverse population, yet most African countries are far behind
in achieving their full potential, compromising Africans’ ability to live
productive and happy lives.
This chapter endeavours to provide a background to the rest of the
book by addressing Africa’s potential in the context of the social chal-
lenges that many countries in Africa face; consider the role that economic
development can play in facilitating a sustainable growth trajectory; the
level of economic performance and progress in Africa; global, regional and
national efforts to stimulate socio-economic development in Africa; and
the current attractiveness of African countries in attracting investment.
Indicator USA Germany China Angola DRC South Ethiopia Rwanda Mauritius South Egypt Algeria Nigeria
Africa Sudan
low inequality,
100 high
inequality) (World
Bank estimate)
Inequality- 0.797 0.861 0.636 0.574 0.316 0.463 0.337 0.382 0.688 0.264 0.492 0.604 0.349
adjusted Human
Development
Index Value 2018
(1 high/0 low)
(United Nations
AFRICA’S ECONOMIES
Development
Programme
5
2019)
(continued)
6
Indicator USA Germany China Angola DRC South Ethiopia Rwanda Mauritius South Egypt Algeria Nigeria
Africa Sudan
Income share 15.2% 20.7% 17% 15% 15.5% 7.2% 17.6% 15.8% 19.2% 12.5% 21.9% 23.15% 15.1%
held by poorest
B. ROBINSON
40% 2018
(United Nations
Development
Programme
2019)
Income share 30.6% 24.8% 29.4% 32.3% 32% 50.5% 31.4% 35.6% 29% 33.2% 27.8% 22.9% 32.7%
held by richest
10% 2018
(United Nations
Development
Programme
2019)
Population in 327.17 82.93 1392.73 30.81 84.07 57.78 109.22 12.3 1.27 10.98 98.42 42.23 195.87
millions, 2018
(The World Bank
Country Profile)
Population 0.6% 0.3% 0.5% 3.3% 3.2% 1.4% 2.6% 2.6% 0.1% 0.6% 2% 2% 2.6%
growth annually,
2018 (The World
Bank Country
Profile)
Poverty 1.2% 0% 0.7% 30.1% 76.6% 16.5% 30.8% 55.5% 0.5% 42.7% 1.3% 0.5% 53.5%
headcount ratio
at $1.90 per day,
2018 (The World
Bank Country
Profile)
Indicator USA Germany China Angola DRC South Ethiopia Rwanda Mauritius South Egypt Algeria Nigeria
Africa Sudan
GNI (Gross 63,690 54,560 18,170 6170 900 13,250 2010 2200 26,080 N/A 12,100 14,970 5710
National Income)
per capita, PPP
(Purchasing Price
Parity)
International $,
2018 (The World
Bank Country
Profile)
Life expectancy at 79 81 76 60 60 64 66 68 75 57 72 76 54
birth, 2018 (The
World Bank
Country Profile)
Fertility rate, 1.8 1.6 1.7 5.6 6 2.4 4.4 4.1 1.4 4.8 3.4 3 5.5
total, 2018
(births per
woman) (The
World Bank
Country Profile)
School enrolment, 99% 98% N/A 51% 46% 105% 35% 41% 95% 11% 88% N/A 42%
1
secondary (%
gross), 2018 (The
World Bank
Country Profile)
(continued)
AFRICA’S ECONOMIES
7
8
Indicator USA Germany China Angola DRC South Ethiopia Rwanda Mauritius South Egypt Algeria Nigeria
Africa Sudan
Prevalence of 0.4% 0.1% N/A 2% 0.8% 20.4% 1% 2.5% 1.3% 2.5% 0.1% 0.1% 1.5%
HIV, total (% of
B. ROBINSON
population ages
15–49), 2018
(The World Bank
Country Profile)
GDP, US$ 20,544.34 3947.62 13,608.15 105.75 47.23 368.29 84.36 9.51 14.22 12.00 250.89 173.76 397.27
Billions, 2018
(The World Bank
Country Profile)
GDP growth, 2.9% 1.5% 6.6% −2.1% 5.8% 0.8% 6.8% 8.6% 3.8% −10.8% 5.3% 1.4% 1.9%
2018 (annual %)
(The World Bank
Country Profile)
Inflation, GDP 2.4% 1.5% 2.9% 34.8% 30.1% 3.9% 12.5% −0.8% 1.7% 17.7% 21.4% 7.6% 10.2%
deflator (annual
%), 2018 (The
World Bank
Country Profile)
Industry 18% 27% 41% 42% 44% 26% 27% 16% 18% 33% 35% 40% 26%
(including
construction),
value added (% of
GDP), 2018 (The
World Bank
Country Profile)
Indicator USA Germany China Angola DRC South Ethiopia Rwanda Mauritius South Egypt Algeria Nigeria
Africa Sudan
Exports of goods 12% 47% 20% 29% 34% 30% 8% 17% 41% 37% 19% 26% 15%
and Services (%
of GDP), 2018
(The World Bank
Country Profile)
Imports of goods 15% 41% 19% 23% 37% 30% 23% 34% 54% 29% 29% 32% 18%
and services (% of
GDP), 2018 (The
World Bank
Country Profile)
Net lending −5.2% 0.5% 15.8% −6.8% N/A −4.2% −4% −3.1% −1.9% N/A −11% N/A N/A
(+)/Net
borrowing (−) (%
of GDP), 2018
(The World Bank
Country Profile)
Adapted from The World Bank Country Profiles (2020), Transparency International’s Corruption Perception Index (2018), World Happiness Report
2019 (Helliwell et al. 2019); Human Development Report (United Nations Development Programme 2019)
1
AFRICA’S ECONOMIES
9
10 B. ROBINSON
Fig. 1.1 Population and poverty levels in Africa (World Bank 2019)
Sudan with GDP contraction of 10.8% has 33.2% of its wealth held by
the 10% wealthiest of the population.
Other indicators reflect the impact of these problems. Referring to
Table 1.1 (The World Bank Country Profiles), life expectancy at birth
in the USA, Germany and China are in the 76–81 range, while it is in the
range of 54–60 for Angola, the DRC, South Sudan, and the lowest is 54
in Nigeria. Secondary school enrolment in the USA and Germany is just
under 100%, but 35% in Ethiopia, 41% in Rwanda, 42% in Nigeria, and a
dismal 11% in South Sudan.
constant theme throughout the book and one of the important contribu-
tions the book made was the proposed African Tree of Organic Growth
Paradigm depicted in Fig. 1.2.
Without getting into the complexities of economic growth versus
inclusive growth versus organic growth, organic growth was defined as
‘pursuing a path of national well-being for all citizens through the effec-
tive development of core resources and critical assets of the country’
(Jonker and Robinson 2018).
In other words, instead of adopting a ‘one shoe fits all’ approach to
development in Africa, the African Tree of Organic Growth acknowledges
that every country within Africa is fundamentally different, each with its
own unique resources, assets and structures at a particular point in time—
the roots of its organic growth. The roots could either be strong or be
indicative of shortcomings and constraints to development.
The roots detailed are the following (Table 1.2).
The trunk of the African Tree of Organic Growth depicts the growth
channels to produce wealth and capital. The trunk is a two-way channel
of conducting and transforming the ‘water and nutrients’ available from
the roots to produce the leaves and fruit. There is also the return
flow between the leaves and fruit back towards the roots —the future
Fig. 1.2 The African Tree of Organic Growth (Jonker and Robinson 2018)
12 B. ROBINSON
Table 1.2 The roots of the African Tree of Organic Growth (Jonker and
Robinson 2018)
Table 1.4 The leaves and fruit of the African Tree of Organic Growth (Jonker
and Robinson 2018)
Social wealth where rights and duties are upheld, social indicators such as life
expectancy is improved, and law and order are maintained
Cultural wealth depicted by a strong cultural identity where diverse cultures and values
are respected and celebrated, and freedom of expression supported
Natural capital where environmental sustainability is prioritised, finite resources
protected and efforts are made to mitigate climate change externalities
Human capital is developed to improve knowledge and research, skills and
competencies, and productivity
Institutional capital is reflected through effective government and governance,
institutional strength, and fairness and justice
Produced capital outcomes of infrastructure, production capacity, and innovation and
technology
Financial capital of the availability of development finance; improved savings and
investment and the partnering with international players
Economic wealth that ensures employability, economic participation and indigenous
entrepreneurship
the cost of transport and logistics or provides access to power and crit-
ical services. If not, Investors in zones may have to manage without or
provide their own infrastructure, at a significant cost.
These and other examples will be highlighted as the book progresses
through the Chapters.
from a high in the 1980s of 30–40 conditions towards 10 and less from
the late 2000s.
It is interesting to note that the conditions per country has varied quite
significantly with the highest number of conditions (40 and more) in
Algeria and the Republic of Congo to less than 10 in Sudan, Seychelles,
Lesotho and Djibouti. Hernandez suggests a number of reasons for this
discrepancy, including the timing of the loans (1980s and 1990) for
Algeria and the Republic of Congo, and the value of the loans (2008–
2013 and of value of less than $20 million) for Djibouti, Lesotho and the
Seychelles.
1.4.1.3 OECD
The Organisation for Economic Co-operation and Development
(OECD) has its historical roots in the Organisation for European
Economic Cooperation that was established after World War II in 1948,
initially financed by the US, to reconstruct countries devasted by the
ravages of war. It grew into a global organisation with 36 member
countries and 3 ‘key partner’ countries including South Africa, the only
country from Africa. These countries account for 80% of world trade and
investment (OECD 2019).
The OECD primarily assists with informing policy and supporting and
monitoring policy implementation, standard setting such as the OECD
Guidelines for Responsible Business Conduct, and multi-stakeholder
global collaboration The OECD has regional initiatives in Africa that
helps ‘facilitate policy benchmarking and the exchange of good prac-
tices between countries in a specific geographical area within and across
regions; help(s) guide countries towards globally recognised standards
and ambitious reform agendas to unlock greater prosperity and well-
being for citizens’. The OECD Development Centre is a forum for policy
dialogue with developing and emerging economies to develop policy that
stimulates growth and improves living conditions.
1. Not creditworthy: These are countries with a GNI per capita below
an established threshold updated annually and are only eligible for
concessional loans from the African Development Fund.
2. Blend countries: These are countries below the pre-determined GNI
per capita but who are creditworthy. They are eligible for African
Development Fund and African Development Bank resources.
3. Countries above the operational GNI level and creditworthy. These
countries are eligible for African Development Bank funding only.
22 B. ROBINSON
Table 1.5 The seven aspirations of Agenda 2063 (African Union 2020)
Aspiration Goals
Project Details
1. Integrated high-speed train network: The project aims to connect all the
African capital cities and commercial
hubs in Africa through an African
High-Speed Train Network to improve
connectivity, reduce transport costs of
transport and ease congestion of current
and future transport networks
2. African Commodities Strategy The development of an African
Commodities Strategy is seen as key to
enabling African countries to add value,
extract higher rents, integrate their
global value chains, and promote vertical
and horizontal diversification in
commodities—thus transforming Africa
from a raw materials supplier for the
world to utilising its own resources to
promote economic development
3. African Continental Free Trade Area In order to boost Africa’s trading
(AfCFTA) position in the global economy, the
AfCFTA aims to accelerate intra-Africa
trade for sustainable development. It has
some lofty ambitions, such as doubling
intra-Africa trade and strengthening
Africa voice in global trade negotiations
4. The African Passport and Free This project aims to remove restrictions
Movement of People on African’s ability to travel, work and
live within Africa
5. ‘Silencing the Guns’ by 2020 ‘Silencing the Guns’ acknowledges the
debilitating impact of wars, civil conflicts,
gender-based violence, violent conflict
and genocide on Africa, and the
programme aims to address this through
various interventions including the
operationalisation of an African Human
Security Index
6. Implementation of the Grand Inga Dam The Grand Inga Dam could generate
Project 43,200 MW of power and move much
of Africa towards reliable and affordable
electricity access
(continued)
1 AFRICA’S ECONOMIES 25
Project Details
(continued)
26 B. ROBINSON
Project Details
financial management
(continued)
29
30
Adapted from ‘Development Financing in Africa’ by the United Nations Economic Commission for Africa, 2017; ‘African Economic Outlook 2020’
by the African Development Bank (2020b); the ‘EY’s Attractiveness Report, 2018’ and ‘The African Tree of Organic Growth’ (Jonker and Robinson
2018)
AFRICA’S ECONOMIES
31
32 B. ROBINSON
References
African Development Bank. 2020a. [Online]. Available from: https://www.afdb.
org/en. Accessed 24 Feb 2020.
African Development Bank. 2020b. African Economic Outlook 2020 [Online].
Available from: https://www.afdb.org/en/documents/african-economic-out
look-2020. Accessed 27 Feb 2020.
African Union. 2020. Agenda 2063 [Online]. Available from: www.au.int.
Accessed 19 Feb 2020.
Bogetić, Ž., and L. Smets. 2017. Association of World Bank Lending with Social
Development Policies and Institutions. © World Bank [Online]. Available
from: https://ieg.worldbankgroup.org/sites/default/files/Data/WorldBank
PolicyLending.pdf. Accessed 17 Feb 2020. License: Creative Commons Attri-
bution License (CC BY 3.0 IGO). http://creative-commons.org/licenses/
by/3.0/igo/.
EY. 2018. EY’s Attractiveness Program. Africa. Turning Tides [Online].
Accessed from: https://www.ey.com/Publication/vwLUAssets/ey-africa-
attractiveness-survey-2018/$File/ey-africa-attractiveness-survey-2018.pdf.
Accessed 2 Mar 2020.
Helliwell, J., R. Layard, and J. Sachs. 2019. World Happiness Report 2019. New
York: Sustainable Development Solutions Network [Online]. Available from:
https://worldhappiness.report/ed/2019/#read. Accessed 7 Jan 2020.
Hernandez, D. 2017. Are “New” Donors Challenging World Bank Condition-
ality? World Development 96: 529–549.
International Bank for Reconstruction and Development. 2020. © World Bank
[Online]. Available from: https://www.worldbank.org/en/who-we-are/ibrd.
Accessed 17 Feb 2020. License: Creative Commons Attribution License (CC
BY 3.0 IGO). http://creative-commons.org/licenses/by/3.0/igo/.
1 AFRICA’S ECONOMIES 33
1945 ‘neutralised’ Japan, and China found itself free to determine its own
future fate.
The Nationalist government took over the country’s administration
after the war, but the communists were well organised and equipped
thanks to arms surrendered by the Japanese and Soviet armies, and had
their ranks increased by deserters from the Nationalist army. The ensuing
Chinese Civil War resulted in most of mainland China being in control
by the Communists, who established their capital in Peking. The Nation-
alist government eventually relocated to Taiwan, an area which is still
in dispute regarding Chinese sovereignty, and the Communist Party of
China came to power in 1949.
Mainland China found much of its infrastructure and industry devas-
tated after years of war and conflict. The transportation, communication
and power systems were not well developed. The agricultural sector was
faltering. The economy was on a poor footing with rampant inflation.
This was the state of the nation that Mao inherited, and he soon began
trying to change that.
The immediate priority of government was to normalise the economy
and get the necessary infrastructure up and running. The banking system
was nationalised, and the People’s Bank of China established. Inflation
was stabilised through a guaranteed currency value, unified monetary
system, credit control and better management of government budgets.
In order to stimulate the economy, state trading companies were estab-
lished, state-owned enterprises further developed, and private companies
were increasingly brought under state control. Landownership was funda-
mentally changed, with 45% of arable land expropriated from landlords
and productive farmers and redistributed to farm families who previously
had no land of their own. These farmers were encouraged to coop-
erate amongst themselves in so-called mutual aid teams. The efforts were
reasonably successful, and the economy improved.
In the 1950s China entered into an alliance with the Soviet Union for
specialist civil and military products, and loan agreements were concluded
to finance these. The focus was on heavy industry, especially military
equipment to the detriment of consumer goods, and many factories were
established up to the 1960s with the Soviet’s assistance. Their new-found
military might was demonstrated in the Korean War and the invasion of
Tibet.
The first Five-Year Plan of 1953–1957 adopted the Soviet model
of industrial growth and socialisation that included state ownership of
2 CHINA’S SURGE IN GROWTH FACILITATED … 37
of transporting the Chinese Red Guards, and factories were placed under
the leadership of revolutionary committees which included the Chinese
Liberation Army. Scientists, engineers and others were demoted or even
jailed. Imports of foreign equipment was banned—which resulted in
many years of stagnant technological advancement. Focussed on elimi-
nating the cultural traditions in favour of radical social revolution, the
Red Guard invaded homes, and books and art were destroyed. The
educational sector collapsed, the political system was in turmoil, and the
economy weakened and was embattled for a further decade.
Slowly but surely, political stability was restored, and the economy
began to slowly grow in the early 1970s. Communist Party of China
Committees replaced revolutionary committees, and well-educated and
skilled labour were once again employed. Universities re-opened, and
there was some effort to open the county to the outside world, and
foreign investment in certain industries was encouraged. Industrial output
and agricultural production increased significantly. There was, however,
a movement by the ‘Gang of Four’ who through their media strength,
sowed seeds of uncertainty in the mid-1970s and created a power struggle
and policy inaction. This countered economic advances made during the
previous years. After the arrest of the Gang of Four, Deng Xiaoping took
over the reins of the country.
Deng Xiaoping revitalised the Four Modernizations (modernising agri-
culture, industry, defence and science and technology) and introduced
sweeping changes: Amongst others, foreign trade was to be increased;
managers and economic decision makers would take precedent over party
officials; workers would be incentivised; research and education was to be
increased. A 10-year plan for the period of 1976–1985 period was devel-
oped that prioritised industry and agriculture. Key to the success of this
plan was the establishment of Special Economic Zones.
virus is still uncertain (Fig. 2.1). The export orientation of the Zones
and their spectacular success is reflected in the growth of exports as a
percentage of GDP from 4.556% in 1978 doubling to 11.02% in 1982
after just 4 years, reaching a high of 36.04% in 2006, before dropping to
a strong level of 19.52% in 2018 (Fig. 2.2). Not only were the economic
indicators strong, but the societal improvements were just as impressive:
From a poverty rate of 88% in 1981, it was less than 1% in 2019 with the
government planning to eradicate poverty by 2020—850 million people
were lifted out of extreme poverty.
The definition in this book of Special Economic Zones is wide as
described in the book’s front pages, and refers to economic development
zones promulgated as Special Economic Zones, as well as the Indus-
trial Development Zones, Export Processing Zones, Industrial Parks,
and a myriad of other formats, all of which are specific interventions or
investments for economic growth. China has numerous of these types of
economic zones and clusters, but the attention of this Chapter is mostly
40 B. ROBINSON
Fig. 2.2 Exports of goods and services (% of GDP)—China (World Bank 2020)
Fig. 2.3 Location on the Special Economic Zones in China (Google Maps)
that already had a long history of contact with the rest of the world, and
that were close to the established commercial and industrial hubs of Hong
Kong, Macao and Taiwan. From the outset, they were encouraged to take
a very different approach with open and innovative policies, that if proven
successful, could be rolled out throughout the country.
The success of the zones was almost immediate. By 1981, the four
Special Economic Zones accounted for 59.8% of total FDI in China,
mostly thanks to Shenzhen which contributed 50.6%. Hong Kong was
helpful in providing much needed Foreign Direct Investment in many of
the production centers of the Zones and other areas. The growth rates of
China’s GDP between 1980 and 1984 grew at 10% per annum, buoyed
by Shenzhen’s growth of 58% during this period, followed by Zhuhai at
32%, Xiamen at 13%, and Shantou at 9%. Between 1988 and 2006 the
other large Special Economic Zones of the province of Hainan, Shanghai
Pudong New Area and Tianjin Binhai New Area were initiated.
Encouraged by the success of the Special Economic Zones and to
support the opening of the economy, the government in 1984–1988
introduced smaller zones called ‘economic and technological develop-
ment zones’, known better as industrial parks—14 of these zones were
established in cities in the Pearl River Delta, the Yangtze River Delta,
and the Min Delta. The success of these supported the decision to create
another 35 of these variants in 1992 that included inland regions, and
since then the number has continued to grow.
There were other variants to these zones with specific objectives. Some
of these are detailed in Table 2.1.
Another contributor to China’s economic growth worth mentioning
is that of industrial clusters. These often emerge naturally, although
in China, they have been given significant support. They are mostly
labour intensive and found in the manufacturing sector, although this
is changing, and more of these clusters are now found in the high-end of
the value chain. Often, they are found within the large Special Economic
Zones and are an important contributor to the Zones’ own success.
In order to gain a better idea of the history, structure, and functioning
of Chinese Special Economic Zones, three Zones in the country were
visited during my research. These visits and resultant first-hand knowl-
edge gained served as the foundation for the development of the Chinese
Model of Special Economic Zones described in the next Chapter—this
Model is referred to throughout the book as a benchmark against which
various African Special Economic Zones are evaluated. The observations
2 CHINA’S SURGE IN GROWTH FACILITATED … 43
are described in the following case studies of the Shenzhen, Zhuhai and
Shantou Special Economic Zones.
Fig. 2.4 KK100: Second tallest building in Shenzhen with 100 floors
from the period indicate Shenzhen was a small-sized city at that stage,
but things were about to change…
In 1978, the Third Plenary Session of the Eleventh CPC Central
Committee resolved to ‘Reform and Open up’ the Chinese economy,
with Deng Xiaoping proposing Special Economic Zones as a principal
method to do this. Xi Zhongxun, father of today’s President Xi Jinping,
played a pivotal role during this period. After a turbulent history with
46 B. ROBINSON
Building was built in the early 1980s in just 37 months and became the
tallest building in China at the time.
There were momentous cultural and societal changes during this
period. Concepts such as all people ‘eat from the same pot’ were abol-
ished, signifying a move towards a free market system. Market reform
was incremental and was introduced through the ‘Four-Step Measures’
for price reform of Shenzhen:
was required that optimised the city’s industry structure while further
developing new and hi-tech industries.
In 2008 Shenzhen became the national pilot city of innovation.
Six strategic emerging industries were identified and prioritised: Bioin-
dustry; internet; new energy; new material; cultural innovation; and new
generation information technology. Its vision was to be an international
innovation city with world influence.
Shenzhen wanted to be a model ‘Eco-environment Friendly City’ or
so-called ‘Model City of Ecological Garden in China’. From an environ-
mental perspective, it focussed on being a low-carbon economy through
energy-saving real-estate developments, supporting the introduction of
zero-emission electric vehicles, and innovative methods of generating
power, such as the garbage burning power plant in the Nanshan district.
Urban planning was adjusted to improve land utilisation with important
infrastructural projects in transport, communication, power, water and gas
to improve service capabilities in a pollution-free and low carbon manner.
The area of the Shenzhen Special Economic Zone was also increased from
the original 417 km2 to 1991 km2 .
Major infrastructural projects during this period included the China
South Logistic Park; the new Stock Exchange; Shenzhen Hi-Tech Indus-
trial Park; Dafen Cultural Industry Park; Futian Transport Hub; Yantian
Port; and improving facilities at Futian Port.
China has struggled with corruption, and there was a renewed effort
to mitigate the problem through improving Communist Party conduct,
upholding integrity and fighting corruption. Supervision over party
conduct and government ethics was strengthened.
The phase also built on previous advances in improving the well-being
of its citizens through the initiative of ‘Promoting the Construction of a
Harmonious Society’. In order to this, it focussed on strengthening social
management, improving public service, promoting welfare, and generally
ensuring that the success of the city was enjoyed and shared by the people
of the society. This included the improvement of the social security system
and provision of Medicare. Terms such as ‘Harmonious Shenzhen’ and
‘Safe Shenzhen’ were used to reflect the city’s commitment to a safe and
enjoyable lifestyle.
The ‘10 Concepts of Shenzhen’ epitomise the innovative, inclusive and
values-driven philosophies of the Shenzhen Special Economic Zone:
54 B. ROBINSON
Fig. 2.9 Seashore of high-rises: Zhuhai Yanlord Riverside Centre; Statue of the
Fisher Girl
following: In 1993 Zhuhai issued the first national social insurance regu-
lation; in 2002 it established serious illness medical insurance for migrant
workers; 2007 saw the introduction of free education for local primary
and secondary school students; and in 2018 tickets for city bus routes
were lowered to 1 Yuan (Guangdong China 2019).
The Zhuhai Special Economic Zone seems to have found the balance
between driving economic growth whilst ensuring the environment is
protected and the well-being of its people is enhanced.
Fig. 2.14 Port and railway station connecting Shantou to China and the rest
of the world
Initially the Zone experienced rapid growth after the Shantou Special
Economic Zone was designated in the 1980s, with investors attracted
by incentives such as duty-free exports and reduced import taxes; rela-
tively low wages; and excellent infrastructural resources. Much of the
investment was from the Asian Pacific region. In the 1990s, the Chinese
Government split the city into 3 cities of Shantou, Jieyang and Chaozhou,
with Shantou Special Economic Zone being enlarged from the Eastern
Suburbs to covering the entire city.
The division of the city is one of the reasons advanced for the Shantou
Economic Zone experiencing a downturn, as much of its manufacturing
and agricultural capacity was lost through the division; limited fiscal
resources were split too thinly; and the three cities were now in fierce
competition to each other. Another is the Asian financial crisis of 1998—
the Shantou economy was strongly linked to the Asian Pacific region
which was their major source of foreign capital and the market for their
exports. The economy even entered a contractionary period between
1998 and 2002. The city also had a problem with tax evasion and
smuggling which was a deterrent to investment (Chai 2017).
Bowen Chai (2017) makes a valuable observation as to why the
Shantou Special Economic Zone’s trajectory changed its course for the
negative after the splitting of the city into three: Chai suggests the
Shantou-Jiyang-Chaozhou had a history of almost a thousand years with
the same culture, history and economy—they were reliant on one another.
The initial success of the Shantou Special Economic Zone was a function
of the holistic contribution of the three regions, while the separation of
the region into the three cities compromised this delicate balance.
2.8 Conclusion
The preceding discussion and evaluation of the three Chinese Special
Economic Zones provided the foundation for the depiction of a Chinese
Model of Special Economic Zones that was adopted and that evolved
over time. This will be the focus in the next Chapter as I construct the
Chinese Model of Special Economic Zones—the model is envisaged as a
useful benchmark for the evaluation of Special Economic Zones in Africa
conducted later in the book.
60 B. ROBINSON
References
Chai, B. 2017. The Research on the Stagnant Development of Shantou Special
Economic Zone Under Reform and Opening-Up Policy. University of Penn-
sylvania Scholarly Commons. Accessed from: https://arxiv.org/ftp/arxiv/pap
ers/1711/1711.08877.pdf. Accessed 10 Mar 2020.
Guangdong China. 2019. Zhuhai Special Economic Zone Marks 39th Anniver-
sary [Online], August 28. Accessed from: http://www.chinadaily.com.cn/reg
ional/2019-08/27/content_37505873.htm. Accessed 4 Apr 2020.
World Bank. 2020. China Country Overview. © World Bank [Online]. Accessed
from: https://www.worldbank.org/en/country/china/overview. Accessed
12 Mar 2020. License: Creative Commons Attribution License (CC BY 3.0
IGO). http://creative-commons.org/licenses/by/3.0/igo/.
Zeng, D. 2010. Building Engines for Growth and Competitiveness in China:
Experience with Special Economic Zones and Industrial Clusters. © World
Bank [Online]. Accessed from: http://documents.worldbank.org/curated/
en/294021468213279589/pdf/564470PUB0buil10Box349496B01PU
BLIC1.pdf. Accessed 4 Mar 2020. License: Creative Commons Attribution
License (CC BY 3.0 IGO). http://creative-commons.org/licenses/by/3.0/
igo/.
CHAPTER 3
Fig. 3.1 One of the original planning documents for the Shenzhen Special
Economic Zone, dated 1986: ‘General Planning of Shenzhen Special Economic
Zone’
• Infrastructure was of
Pillar 7: paramount importance
• Significant investment by
government in transport,
Infrastructure power, water and waste,
and ICT infrastructure
Fig. 3.2 The 7 Pillars of the Chinese Model of Special Economic Zones
64 B. ROBINSON
• Phased approach
Protocol 1: developed as lessons were Protocol 2: • Reduced bureaucracy
learnt and mistakes made • Simplified local
Phased • Successes benchmarked Ease of government
and applied to other business administraƟon
approach
emerging SEZs
• Multipronged approach
• State Owned Enterprises played
an important initial role
Protocol 5: • Domestic investment was through Protocol 6:
public, private, and public-private
• Development prioritised
Favourable partnerships Modern modern service industry
investment • FDI encouraged through Service
incentives, service, infrastructure Industry
climate
and market access
• Foreigners were given ‘national
treatment’
Fig. 3.3 The 12 Pillars of the Chinese Model of Special Economic Zones
3 THE CHINESE SPECIAL ECONOMIC ZONE MODEL … 65
Sustainable development
Protocol 1: Protocol 2: Protocol 3: Protocol 4: Protocol 5: Protocol 6: Protocol 7: Protocol 8: Protocol 9: Protocol 10: Protocol 11: Protocol 12:
Phased Ease of Preferential Innovation Favourable Phased Modern International Addressing Social Export Diversified
approach business policies & learning Investment approach service cooperation short- system orientation industries
Climate delivery comings
Fig. 3.5 The contribution of consumption, investment and net exports to GDP
Growth (China Economic Update, World Bank 2019a: 11)
Table 3.1 A summary of the 3D’s (World Bank, Innovative China: New Drivers
for Growth 2019b: 19–149)
3D’s Summary
Table 3.2 A summary of the Six Strategic Choices (World Bank, Innovative
China: New Drivers for Growth 2019b: 19–149)
(continued)
3 THE CHINESE SPECIAL ECONOMIC ZONE MODEL … 71
Fig. 3.7 The impact of the 3D’s on the production Frontiers 3D’s (World
Bank, Innovative China: New Drivers for Growth 2019b: XIX)
Two case studies are presented that expand of two elements of the
New Drivers for Growth available to China. Firstly, the Xiong’an New
Area and the Belt and Road Initiative.
Fig. 3.8 The Baiyangdian Lake area with fields of the giant lotus flowers
Fig. 3.9 Typical streets of the Xiong’an area—Far from the high-rise city it is
to become
Fig. 3.13 The Belt and Road Initiative (World Bank 2020)
78 B. ROBINSON
3.7 Conclusion
The Chinese are not afraid of failing. They are afraid of not trying.
Their innovative approach of trying, succeeding and failing, and learning,
have led to the hugely successful application and replication of Special
Economic Zones to facilitate sustainable development for China.
‘If it works, copy it’ as one of my Chinese colleagues explained.
African countries can benefit not only from the investment by the
Chinese in important infrastructural projects, investment in African
Special Economic Zones, and Chinese investing in their own Special
Economic Zones in Africa, but Africa has an enormous amount to learn
from China’s model and adapting it to African nations’ specific contexts.
There are of course many reciprocal benefits to China, notably, these
investments hold the promise to shift the production possibilities frontier
for the country as it embarks on its next stage of economic development
in the face of an economic slowdown. It is in the interest of the Chinese
for African Special Economic Zones to succeed.
This chapter was important as it studied and presented China’s Model
of Special Economic Zones, as a construct and benchmarking tool against
which African Special Economic Zones are further evaluated in the
Chapters that follow.
References
Wong, F. 2019. Xiong’an New Area: President Xi’s Dream City. China Briefing,
26 March. Accessed from: https://www.china-briefing.com/news/xiongan-
new-area-beijing-tianjin-hebei/. Accessed 20 Mar 2020.
World Bank. 2019a. China Economic Update December 2019: Cyclical Risks
and Structural Imperatives. © World Bank [Online]. Accessed from: https://
www.worldbank.org/en/country/china/publication/china-economic-upd
ate-december-2019. Accessed 31 Mar 2020. License: Creative Commons
Attribution License (CC BY 3.0 IGO). http://creative-commons.org/lic
enses/by/3.0/igo/.
World Bank. 2019b. Innovative China: New Drivers of Growth. © World
Bank [Online]. Accessed from: https://openknowledge.worldbank.org/han
dle/10986/32351. Accessed 31 Mar 2020. License: Creative Commons
Attribution License (CC BY 3.0 IGO). http://creative-commons.org/lic
enses/by/3.0/igo/.
World Bank. 2020. Belt and Road Initiative. © World Bank [Online].
Accessed from: https://www.worldbank.org/en/topic/regional-integration/
3 THE CHINESE SPECIAL ECONOMIC ZONE MODEL … 81
China in Africa
Table 4.1 Excerpts from the Five Major Pillars of China and Africa’s strategic
partnership (Xi 2017: 496–497)
1. We should remain committed to political equality and mutual trust. China strongly
believes that Africa belongs to the African people and that African affairs should be
decided by the African people
2. We should remain committed to mutually beneficial economic cooperation…
requires us to facilitate Africa’s development efforts and ultimately deliver common
development through mutually beneficial cooperation
3. We should remain committed to mutually enriching cultural exchanges
4. We should remain committed to mutual assistance in security
5. We should remain committed to solidarity and coordination in international affairs
4 CHINA IN AFRICA 87
Table 4.2 Excerpts from the Ten Cooperation Programs of China with Africa
(Xi 2017: 498–501)
It is in line with the trend of the times and serves the interests of Chinese
and African people to build a community with a shared future for mankind,
an open, inclusive, clean, and beautiful world that enjoys durable peace,
universal security, and common prosperity, and a new type of international
relations featuring mutual respect, equity, justice and win-win cooperation.
this regard, such as through the implementation of the Belt and Road
Science, Technology and Innovation Cooperation Action Plan and the
China-Africa Science and Technology Partnership Program 2.0.
The Fourth Industrial Revolution is acknowledged in the Beijing
Action Plan (2019–2021) when it described the increasing role of arti-
ficial intelligence and quantum computing, and how quantum physics
principles on computing will change the face of operating systems, cyber
security, big data, block chains and other applications. China committed
to applying its strength in these areas to support Africa.
4.1.6 Health
China actively engages with African Nations in their efforts to improve
and ensure responsive public health care systems. China supports various
efforts in health control, prevention and treatment. More effective
hospital management is encouraged in Africa with cooperation between
respective professional and specialised health departments, and efforts
have been made to train medical specialists, medical staff, public health
workers and administrative personnel in African Countries. It works
closely with African health programmes such as the African Center for
Disease Control and Prevention; and China has established several China-
Africa Friendship Hospitals and provides a number of mobile medical
services. China has helped build capacity in the production of essential
medicines and contributed to technology transfer in pharmaceuticals.
China supports anti-malarial efforts in Africa and is contributing
towards the objective of eradicating AIDS, TB and Malaria by 2030.
China has a history of assisting Africa during its health crises, such as
during the Ebola outbreak and more recently the COVID-19 pandemic,
where it supplied a wide-range of support, guidance and anti-epidemic
supplies.
4.1.9 Trade
China-sub-Saharan Africa trade has grown by 26% per annum since 1995,
reaching $170 Billion in 2013, and China accounts for about 24% of sub-
Saharan Africa’s total trade from just 2.3% in 1995, although sub-Sahara
Africa’s share in Chinese trade was only 3% in 2013. Figure 4.1 (Pigato
and Tang 2015: 5).
Sub-Saharan Africa’s exports to China have grown faster than its
imports, generating a positive trade balance (Fig. 4.2). Exports are
mainly in resources and agricultural commodities, such as oil, uranium,
aluminium, zinc, phosphates, copper, nickel, gold, timber, rubber, coffee,
cotton, cocoa, fish and cashew nuts. Imports from China are quite diver-
sified although consumer goods represent the largest share (Fig. 4.3)
(Pigato and Tang 2015).
Africa with its large, but mostly poor population, has been an ideal
market for low-value mass produced products from China. Chinese
importing companies in Africa have prospered with a vast network of
formal and informal trade throughout Africa. While this has led to
94 B. ROBINSON
Fig. 4.1 Trade between China and sub-Saharan Africa: Relative Trade Shares
(Pigato and Wang 2015, source World Integrated Trade Solution Data, World
Bank)
Fig. 4.2 Trade between China and sub-Saharan Africa: Imports, exports, and
trade balance (Pigato and Wang 2015, source World Integrated Trade Solution
Data, World Bank)
Fig. 4.3 Sub-Saharan Africa’s imports from China (Pigato and Tang 2015,
source World Integrated Trade Solution Data, World Bank)
Fig. 4.4 Chinese FDI Flows to SSA, 2003–2013 (Pigato and Tang 2015,
sourced from UNCTAD 2014 and MOFCOM 2014)
4 CHINA IN AFRICA 97
Fig. 4.6 Chinese FDI in sub-Saharan Africa, by sector (%) (Pigato and Tang
2015, sourced from State Council of China, 2013)
poor maintenance and conflict; and the countries did not need to raise
finance and incur debt for their already fragile economies.
There has been criticism though of China’s infrastructural investments
in Africa. Professor Tang (2010) uses the terms ‘Locomotive’ versus ‘Bull-
dozer’ approaches in terms of the strategy applied by the Chinese and
their African counterparts in infrastructural projects. Although not exclu-
sively referring to the Angola Mode approach, his analysis considered the
cases of Angola and the DRC: The Bulldozer approach was one where
the speed of the project was of paramount importance—get the project
done as expeditiously as possible! This approach was useful in alleviating
bottlenecks, but due to the use of mostly Chinese labour, equipment and
construction materials, it had very little other benefit, and sometimes
had long term negative results. For example, the lack of maintenance
and management, due to lack of capacity, led to almost immediate prob-
lems, delays and cancellations of the newly Chinese built Lobito Corridor
Railway in Angola (Duarte et al. 2015). The locomotive approach takes
longer but has greater socio-economic spin-offs. This approach encour-
ages more use of local labour, SMMEs, and local materials, and thus
should result in some skills transfer, enterprise development, sustainable
employment and community development.
A concern and criticism has been that China’s demand for African
resources would lead to the so-called ‘resource curse’ which results in
over-allocation of financial resources to mining activities and facilitating
infrastructure for mining production, and does not contribute to broad
economic development across sectors. There is evidence though that this
is not the case. Alexis Habiyaremye (2015) found that the infrastructure
for resources agreements do not result in resource dependence by African
countries, if anything, his research suggests that the eradication of infras-
tructural constraints due to China’s approach contributed to improved
export diversification.
China has for some time provided concessionary loans, and in some
cases, provided debt forgiveness for struggling African nations. For
example, at the 2003 FOCAC Summit, China announced debt forgive-
ness towards 31 African countries totalling $1.27 Billion. The Beijing
Action Plan (2018) of 2019–2021 confirmed Africa’s gratitude to China
for exempting outstanding interest-free government debts owed by
Africa’s Lesser Developed Nations which had matured at the end of 2015.
Table 4.3 Fallacies and facts about the impact of China on Africa (Jonker and
Robinson 2018: 277)
The first BRIC Summit was held in 2009 in Russia. The following
extract from the joint statement following the Summit reflects the vision
of the association:
Table 4.4 Summary of the FOCAC Beijing Action Plan 2019–2021 (2018):
Industrialisation and Special Economic Zones
FOCAC Beijing Action Plan (2019–2021): Industrialisation and Special Economic Zones
1.4 China and Africa will take the Belt and Road Initiative as an opportunity to strengthen
multi-dimensional, wide ranging and in-depth cooperation for mutual benefits and common
development and 1.5 includes China and Africa jointly building the Belt and Road
1.8 China will launch eight major initiatives including an industrial promotion initiative, an
infrastructure connectivity initiative, a trade facilitation initiative, a green development
initiative, a capacity building initiative, a health care initiative, a people-to-people exchange
initiative and a peace and security initiative in close collaboration with African countries to
support African countries in achieving independent and sustainable development at a faster
pace
3.2 Economic Cooperation: Industry partnering and industrial capacity cooperation
• The two sides will fully tap into China’s strengths in equipment and technology, draw on
the complementarity of the industrial supply and development needs of the two sides,
and promote the growth of real economies
• China encourages policy-based financial institutions, developmental financial institutions,
the China-Africa Development Fund, the China-Africa Fund for Industrial Cooperation
and the Special Loan for the Development of African SMEs to scale up support for
China-Africa industrial capacity cooperation to boost the industrialization of Africa
• The two sides will advance industrial capacity cooperation along with the implementation
of the Belt and Road Initiative
• China will step up support in the development of industries in Africa including
processing and manufacturing and the development of special economic zones and
industrial parks, and support Chinese private enterprises in setting up industrial parks
in Africa and carrying out technology transfer , to help African countries build more
diversified economies and stronger capabilities for self-driven development
• African countries will continue to improve the legal framework and infrastructure, and
provide efficient and results-oriented government services wherever possible to create a
more enabling environment for attracting investment from Chinese enterprises and for
industrial capacity cooperation
(continued)
4 CHINA IN AFRICA 105
FOCAC Beijing Action Plan (2019–2021): Industrialisation and Special Economic Zones
South Africa joined BRICS in 2010, and the association represented over
41% of the global population in 2015 and accounted for 23.2% of the
world’s GDP in 2018 (BRICS 2020). Importantly, this grouping of coun-
tries signifies significant growth compared to industrialised countries: For
the period 1981–2013 real GDP growth was 6.3% per annum for BRICS
countries, compared to 2.4% for industrialised countries, although there
are significant differences in growth between the BRICS countries, with
9.5% in China, 6.1% in India, 2.7% in Brazil, and 2.4% in South Africa
(Nayyar 2016: 581).
In addition to bilateral meetings and side-line meetings of the G20
and UN General Assemblies, Annual BRICS Summits are held: Brazil in
2010; China 2011; India 2012; South Africa 2013; Brazil 2014; Russia
2015; India 2016; China 2017; South Africa 2018; and Brazil 2019.
China proposed BRICS Plus in 2017 to enhance cooperation between
BRICS and various other developing nations in Africa and elsewhere.
BRICS now has significant influence, has reached common agree-
ment on a variety of financial and economic issues, and BRICS has
campaigned for World Bank and IMF reforms. Importantly, from the
African perspective, BRICS has expanded its external relations to include
that of the African Union and eight of the African Integration Asso-
ciations. The New Development Bank (BRICS Bank) was established
in 2014, and the Treaty for the Establishment of a BRICS Contingent
Reserve Arrangement was entered into, both of which would serve to
finance development within BRICS Plus. Various cooperation agreements
106 B. ROBINSON
Table 4.5 Summary of the FOCAC Beijing Action Plan 2019–2021 (2018):
Areas of strategic cooperation
FOCAC Beijing Action Plan (2019–2021): Other strategic areas of strategic economic
cooperation
(continued)
4 CHINA IN AFRICA 107
FOCAC Beijing Action Plan (2019–2021): Other strategic areas of strategic economic
cooperation
4.3 Conclusion
There can be no doubt that China is having a significant impact on
Africa’s development trajectory. Be it through direct investment, coop-
eration programmes, strategic relationships, geopolitical partnerships,
development assistance, and humanitarian support, bilateral relations are
at an all time high. In addition, institutions and initiatives such as FOCAC
and BRICS has introduced a multilateral approach between China and
the Africa continent. While outside the ambit of this book, the Belt and
Road Initiative (watch this space for a planned book on the Belt and Road
Initiative from an African perspective) and the 2021 launch of the African
4 CHINA IN AFRICA 109
Table 4.6 Selected excerpts from the BRICS Summit Declaration, Brasilia
2019 (2020)
6. We reiterate the urgent need to strengthen and reform the multilateral system,
including the UN, the WTO, the IMF and other international organizations, which we
will continue working to make more inclusive, democratic and representative, including
through greater participation of emerging markets and developing countries in
international decision-making
8. We express our commitment to sustainable development in its three
dimensions—economic, social and environmental—in a balanced and integrated
manner. All our citizens, in all parts of our respective territories, including remote
areas, deserve to fully enjoy the benefits of sustainable development
23. We recall the importance of open markets, fair, just and non-discriminatory
business and trade environments, structural reforms, effective and fair competition,
promoting investment and innovation, as well as financing for infrastructure and
development. We stress the need for greater participation of developing countries in
global value chains. We will continue to cooperate within the G20 and advance the
interests of EMEs and developing countries
26. We reiterate the fundamental importance of a rules-based, transparent,
nondiscriminatory, open, free and inclusive international trade. We remain committed
to preserving and strengthening the multilateral trading system, with the World Trade
Organization at its center. It is critical that all WTO members avoid unilateral and
protectionist measures, which run counter to the spirit and rules of the WTO
29. We will explore in appropriate fora ways to promote and facilitate investments in
productive sectors, e-commerce, MSMEs, infrastructure and connectivity, which will
help to promote economic growth, trade and job creation. In so doing, we will take
into account national imperatives and policy frameworks, with the aim of enhancing
transparent, effective and an investment-friendly business environment
32. We acknowledge the progress made by the New Development Bank towards
expanding its membership. The expansion of the NDB membership in accordance with
its Articles of Agreement will strengthen the Bank’s role as a global development
finance institution and further contribute to the mobilization of resources for
infrastructure and sustainable development projects in BRICS and other EMDC’s
38. We welcome the holding of the BRICS Business Forum and acknowledge the
efforts of the BRICS Business Council (BBC) in promoting trade and investment
among its members by fostering cooperation in areas such as infrastructure,
manufacturing, energy, agribusiness, including biotechnology, financial services, regional
aviation, alignment of technical standards, skills development and digital economy
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CHAPTER 5
With the relationship between China and Africa having been detailed, it
is appropriate to introduce the topic of Special Economic Zones in Africa,
and China’s facilitating role in the investment in Special Economic Zones
in Africa. The Chapter begins with detailing Special Economic Zones in
Africa, then discusses Chinese policy towards Special Economic Zones
globally, and then specifically hones in on Chinese owned and managed
Special Economic Zones in Africa.
Special Economic zones are not a Chinese ‘trademark’ and have been
around globally for centuries, in various formats even before China’s
ventures into Zones. Shannon, Ireland was the first modern Special
Economic Zone. In the 1970s, countries in East Asia and Latin America
experimented with Export Processing Zones to support labour inten-
sive industries, and by 1986 there were 176 Export Processing Zones in
47 countries (Zeng 2016). This trend has continued to proliferate. The
evolution of SEZ’s is portrayed by Baissac (2011) in Table 5.1.
5.1.1 Investment
In terms of investment, while the African zones do attract foreign direct
investment, figures trail far behind what other developing nations’ zones,
such as Bangladesh, Dominican Republic, and Vietnam have been able to
achieve. However, as a percentage of African countries’ FDI, the zones do
contribute to some level of investment. Table 5.3 details these differences
(the single units refer to single unit factories that are deemed to be Special
Economic Zones benefitting from the various incentives, but that operate
throughout Ghana and Kenya).
The number of companies investing is also much lower, with a
seemingly preference by firms for ‘single unit’ options (Fig. 5.1).
Ownership structure was similar between African and other devel-
oping nations analysed, with the majority being foreign owned, although
Senegal and Tanzania were predominantly locally controlled (Fig. 5.2).
5.1.2 Exports
Some African Special Economic Zones have been quite successful in
increasing and sustaining the level of exports. Ghana is one example,
and while much is attributable to cocoa products which are processed in
these zones for the export market, other products for the export market
114 B. ROBINSON
Country Total SEZ FDI Stock SEZ FDI per capita SEZ FDI as % of
(2008) ($m) (2000–2008) ($) total national
FDI (2000–2008)
Bangladesh 1435 6 30
Dominican 2611 141 18
Republic
Vietnam 36,760 325 100
Ghana (Tema) 68 3 48
Ghana (single 2806 120
units)
Kenya (EPZs) 162 6 20
Kenya (single 155
units)
Nigeria N/A <1 <1
Tanzania 210 5 18
Fig. 5.1 Number of firms operating in the Economic Zones, 2009 (Farole
2011)
have shown good results, such as prefabricated housing and plastic house-
hold goods produced in the Tema Zone. Kenya, Nigeria, Tanzania and
Senegal performed less well. As the African Zones were more recent
developments, it could be argued that investment and export growth
5 THE EMERGENCE OF CHINESE INTEREST … 115
Fig. 5.2 Ownership structure of SEZ Investments, 2009 (Farole 2011: 74)
could increase as they grow, however, when one compares the time frame
against Zones in China and other developing nations, African Zones
do not seem to be experiencing the exponential growth seen elsewhere
(Fig. 5.3).
5.1.3 Employment
The African Special Economic Zones were not a major contributor to
employment levels in the countries under analysis and were far below the
levels of other developing countries if one considers Honduras and the
Dominican Republic. Lesotho is the exception—this is likely the result of
the small size of the country and relative size of the Zone. The employ-
ment contribution of the various Special Economic Zones is depicted in
Table 5.4.
Thomas Farole’s work serves as a useful introduction to Special
Economic Zones in Africa for this book—Farole’s analysis depicted above
suggests that African Zones are not achieving what they could and should
be achieving in Africa in terms of attracting investment, diversifying and
116 B. ROBINSON
Fig. 5.3 SEZ export growth trajectories by year of operation (Farole 2011)
Bangladesh 218,299 3%
Dominican Republic 124,517 30%
Honduras 130,000 30%
Vietnam 1,172,000 19%
Ghana (Tema) 2025 3.5%
Ghana (single units) 26,534
Kenya (EPZs) 15,127 15%
Kenya (single units) 15,551
Lesotho 45,130 >80%
Nigeria (Calabar) (est.) 1156 <1%
Nigeria (Onne, oil & gas) 20,000 N/A
Tanzania 7500 2.5%
5 THE EMERGENCE OF CHINESE INTEREST … 117
growing exports for countries, and contributing to job creation and other
socio-economic factors. Farole’s analysis will be revisited later in the book
against my analysis of African and Chinese Special Economic Zones in
Africa.
(continued)
5 THE EMERGENCE OF CHINESE INTEREST … 119
(continued)
120 B. ROBINSON
(continued)
5 THE EMERGENCE OF CHINESE INTEREST … 121
(continued)
122 B. ROBINSON
(continued)
5 THE EMERGENCE OF CHINESE INTEREST … 123
Source Adapted from Newman and Page (2017: 7–14). This content is reproduced with special
permission of UNU-WIDER, Helsinki, the original publisher of the referenced research work: Indus-
trial clusters: The case for Special Economic Zones in Africa, WIER Working Paper, No. 2017/15:
https://doi.org/10.35188/UNU-WIDER/2017/239-7
Carolina in the US. This was followed by some other notable investments:
Fujian Huaqiao Company built an industrial and trade zone in Cuba in
2000; Haier and a Pakistani company, Panapak Electronics, built a indus-
trial park in Lahore in 2001; a Chinese company began an industrial zone
in Chambishi in Zambia in 2003; a $300 Million trade center designed to
host 4000 Chinese companies was constructed by the China Middle East
Investment and Trade Promotion Centre and Jebel Ali Free Trade Zone
in 2004; and a Chinese trade and industrial park was initiated in South
Carolina by the Tianjin Port Free Trade Zone Investment Company and
the United States Pacific Development Company in 2004 (Bräutigam and
Tang 2011a).
In 2006 the Chinese government announced the establishment of 50
overseas economic and trade cooperation zones as a key element to China
implementing their ‘going out’ policy, as detailed in their 11th five-year
plan. The approach, as discussed in Chapter 2, was experimental and
gradual.
124 B. ROBINSON
Angola New legislation was passed in 2015 that established rules for the
creation and functioning of SEZs
Congo Four foreign trade zones are in the planning process
DRC Several SEZs are planned over the coming years. They include
Kinshasa-Inga-Matadi-Banana; Ilebo-Tshikapa-Kananga-Mbuji; Mayi
Kolwezi-Likasi-Lubumbashi-Sakania;
Uvira-Bukavu-Goma-Beni-Bunia; and Kisangani-Bumba-Mbandaka
Djibouti A number of new SEZs are planned over the coming years. They
include: Khor Ambado Free Zone; Jabanas Free Zone; UKAB
Holdings Free Zone; Fabtec Industries Free Zone; and the Djibouti
Free Trade Zone
Gabon SEZs are planned for Franceville, Port Gentil and Nyoni
Kenya SEZs have been approved for Mombasa, Lami, and Kisumu, and
some EPZs are to be converted into SEZs as part of Kenya Vision
2030
Mozambique A special tax and custom regime is being created for the Zambesi
Valley until 2025
Nigeria A number of Zones are in the process of been developed. Some new
Zones planned include the Ossiomo FTZ; Enugu Power &
Industrial Development Free Zone; Warri Industrial Business Park;
Kogi Free Zone; Baklang Free Zone; Madewell & Textile INC Free
Zone; Sahara Offshore Logistics Base Free Zone and various Airport
Free Zones
South Africa SEZ in progress and envisioned include Mthata; Harrismith;
Johannesburg; Tubaste; Musina; Nkomazi; Upington; Bojanala; and
Atlantis
Sudan Free Trade Zone in progress in Kosti
Tanzania The Bagamoyo SEZ and Kigoma SEZ are planned
Zambia Under development is the Lumwana MFEZ which will include the
manufacture of explosives, agro-processing, horticulture fisheries, and
hotel accommodation
Source Adapted from Newman and Page (2017: 17–18). This content is reproduced with special
permission of UNU-WIDER, Helsinki, the original publisher of the referenced research work: Indus-
trial clusters: The case for Special Economic Zones in Africa, WIER Working Paper, No. 2017/15:
https://doi.org/10.35188/UNU-WIDER/2017/239-7
Table 5.7 Objectives of China’s overseas economic zones (Bräutigam and Tang
2011a)
1. Increase demand for Chinese-made machinery and equipment and provide after-sales
support
2. By producing in overseas countries such as in certain African countries, China would
avoid trade barriers and be afforded the opportunity (such as AGOA) to export these
goods to Europe and North America
3. It would help boost China’s own domestic restructuring and move up the value
chain at home
4. Create economies of scale for overseas investment and support small and medium
enterprises to venture overseas in ‘groups’
5. Transfer China’s success in Special Economic Zones to other developing countries
to help recipient countries in their own development whilst benefitting China
A critical aspect is that the developers must have a profit motive as this
was viewed as an important contributing factor to Zones’ success, and the
Ministry of Commerce of China (MOFCOM) emphasized that projects
should be market driven. Companies are expected to take the lead, while
the Chinese government plays a supportive role with generous financial
and non-financial incentives (Zeng 2016).
MOFCOM utilises a competitive tender process for Zone projects,
with winning bids receiving a range of incentives, including RMB200
Million in grants and up to RMB2 Billion in long-term loans. Chinese
companies investing in the zone are also incentivised to do so. The
MOFCOM’s Special Fund for Economic and Technological Cooperation
allows investors to receive up to 100% rebate on the interest paid on
Chinese bank loans. MOFCOM had already invested $700 million in the
construction of 16 Special Economic Zones outside of China, with about
200 companies operating in these Zones with the support of an invest-
ment of $2.5 billion. These incentives reduce the risk of investment and
are performance based with benchmarking evaluations taking place every
1–2 years. The China-Africa Development Fund (CADF) is an additional
development finance instrument that is available to investors in African
Zones (Zeng 2016).
126 B. ROBINSON
(continued)
128 B. ROBINSON
investing in the Zones. The Chinese government did not get much
involved in the design or operation of the Zones. Chinese embassies
also encourage Chinese companies to invest in the zones. The
government has been known to intervene on rare occasions when
problems are encountered with the Zones, but generally, China
has had a ‘hands-off’ approach towards African policies towards the
Zones.
2. Chinese developers
The developers of the Chinese Special Economic Zones in Africa
have been both state-owned and private enterprises from China. As
5 THE EMERGENCE OF CHINESE INTEREST … 129
5.5 Conclusion
The day of writing this conclusion, the trade-war between China and
the US had seemed to be in the distant past after simmering down,
only to be re-ignited during tensions around the COVID-19 pandemic.
Having originated in Wuhan, China, in December 2019 the epidemic in
the country was contained through swift action by the Chinese authori-
ties within a short period of two months, and by early March 2020, the
cumulative total of cases were 82,295, and new cases on the 14th of April
were at 46. At the beginning of March 2020, the US had 75 cases, but by
the end of March it had reached 189,967 confirmed cases, almost double
5 THE EMERGENCE OF CHINESE INTEREST … 131
that of China, and by 14 April 2020, the figure had reached 613,886
cases and was continuing to rise at an alarming, though decreasing rate
(Worldometer.info 2020).
The US President, Donald Trump’s mercurial nature and indecision
regarding the virus at this stage was quite clear, and the search for scape-
goats for the problem became paramount. While having been advised of
its severity by US authorities, and the World Health Organisation (WHO)
declaring the disease a public health emergency on the 30th of January
2020, President Trump referred to it initially as a virus similar to influenza
that was under control, and only declared a national emergency of the
13th of March 2020. The President made reference to the ‘Wuhan Virus’
or ‘Chinese virus’ and has questioned the veracity of the figures of the
Chinese. This has been much to the ire of the Chinese, as could be
expected, as it was clearly laying the blame of a terrible situation at the
feet of China. Another institution blamed was the WHO authority, which
President Trump accused of being ‘wrong about a number of things’
and ‘China-centric’, and on the 14th of April 2020, the president cut-off
funding for the organisation.
In stark contrast, the relationship between China and Africa and many
nations throughout the world, has been bolstered by the support China
has given to their fight for survival against the Coronavirus. On the 13th
of April, Wang Yi, the Chinese State Councillor and Foreign Minister
make a phone call to the Chairperson of the African Union, Moussa Faki
Mahamat. The conversation was as follows:
References
Baissac, C. 2011. Brief History of SEZs and Overview of Policy Debates. In
Special Economic Zones in Africa: Comparing Performance and Learning
from Global Experience, ed. T. Farole. Washington: The International Bank
for Reconstruction and Development/The World Bank. © World Bank.
[Online]. Accessed from: http://documents.worldbank.org/curated/en/996
871468008466349/pdf/600590PUB0ID181onomic09780821386385.pdf.
Accessed 23 Apr 2020. License: Creative Commons Attribution License (CC
BY 3.0 IGO). http://creative-commons.org/licenses/by/3.0/igo/.
Bräutigam, D., and X. Tang. 2011a. Chinese Investments in Special
Economic Zones in Africa. In Special Economic Zones: Progress, Emerging
Challenges, and Future Directions, ed. T. Farole and G. Akinci,
69–100. Washington: The International Bank for Reconstruction and
Development/The World Bank. © World Bank. [Online]. Accessed
from: http://owa.baku8km.khazar.org/bitstream/20.500.12323/2799/1/
special%20economic%20zones.pdf#page=93. Accessed 22 Apr 2020. License:
Creative Commons Attribution License (CC BY 3.0 IGO). http://creative-
commons.org/licenses/by/3.0/igo/.
Bräutigam, D., and X. Tang. 2011b. African Shenzhen: China’s Special Economic
Zones in Africa. The Journal of Modern African Studies 49 (1): 27–54.
Farole, T. 2011. Special Economic Zones in Africa: Comparing Performance
and Learning from Global Experience. Washington: The International Bank
for Reconstruction and Development/The World Bank. © World Bank.
[Online]. Accessed from: https://openknowledge.worldbank.org/handle/
10986/2268. License: CC BY 3.0 IGO http://documents.worldbank.org/
curated/en/996871468008466349/pdf/600590PUB0ID181onomic097
80821386385.pdf. Accessed 23 Apr 2020.
Newman, C., and J. Page. 2017. Industrial Clusters: The Case for Special
Economic Zones in Africa, WIER Working Paper, No. 2017/15, ISBN
978-92-9256-239-7, The United Nations University World Institute for
Development Economics Research (UNU-WIDER), Helsinki. https://doi.
5 THE EMERGENCE OF CHINESE INTEREST … 133
Special economic zones in Africa will not be successful unless they are
competitive in the global arena. To illustrate this, some economic theory
will be useful. Firstly, let’s review concepts of international business, such
as mercantilism and the theories of absolute and comparative advantage.
Mercantilism, dating back to the sixteenth century postulates that
countries should export more than it imports, thus maintaining a trade
surplus. This was regarded as creating wealth for a country, while a
deficit was seen as reducing wealth. This view is certainly still held by
some politicians in recent times, with politicians such as the US past-
President Donald Trump holding neo-mercantilist views which equated
trade surpluses with economic and political power, a view that motivated
the mutually devastating trade war with China.
Absolute advantage suggests that productive resources should be
applied in the production of goods for which a country has an abso-
lute advantage, and trade in goods (import) where it doesn’t have a
competitive advantage. So, as China has developed and become more
technically savvy while experiencing higher wages, they would have an
absolute advantage over let’s say Senegal, in the production of mobile
phones. Senegal on the other hand has lower wages and better produc-
tive capacity to produce labour intensive goods, such as kitchen utensils.
there due to this advantage, access to the local market, and trade oppor-
tunities with more developed nations. These companies are competitive
due to the very nature of globalisation.
The following section is a meta-analysis of what African countries offer
in terms of Special Economic Zones to lure investors, including Chinese
investors. The data has been obtained from various internet sources which
are detailed in the reference list at the end of the Chapter. The list is
relatively comprehensive, but is limited to those countries which publish
information on the various incentives and advantages that their coun-
tries offer investors in their Special Economic Zones. It is also limited to
English versions of the information, so there may be some bias towards
English official-language countries.
In addition, observations are made and discussions with investors from
the various Special Economic Zones are shared, to provide some deeper
insights into these issues. This is aimed to emphasize the weighting
Chinese investors may place on these issues in their investment decision.
The Chapter has the following structure: It explores some of the tax
incentives, tax exemptions, subsidies and preferential financing facilities
offered by host countries; the ease of doing business; the management
and infrastructure provided; the location of the zone and the market
opportunities it offers; the human and other resources that are available;
foreign ownership limitations, repatriation of profits and currency issues;
lifestyle available for Chinese expatriates; global financial initiatives; and
China’s policy towards the host country and to Africa.
Cameroon’s Industrial Free Zones Ten-year tax holiday on all taxes. From
then on, a flat tax rate of 15% on
corporate profits for perpetuity
Djibouti Free Zone Exemption of corporate and income tax
Gabon NKOK SEZ 0% Corporate Income Tax and 0%
property tax
Ghana (Tema Export Processing Zone and 100% exemption from payment of
others) income tax on profits for 10 years which
will not exceed 15% thereafter
Kenya SEZs 10% corporate tax for the first 10 years
after the start of operations; 15% for the
following 10 years; and 30% from then
on. Investment deductions are allowed
from between 100–150% for
construction and machinery purchases
Madagascar Free Zone Income tax is exempt during the first
5 years, and 10% after that for
processing and intensive production.
2 years tax exemption for service sector
companies, followed by a 10% income
tax rate. 15 years tax exemption for
other companies, followed by a tax rate
of 10%
Malawi Export Processing Zones Exemption of corporate tax. 100%
allowance on buildings, plant and
machinery. 25% export allowance on
revenue for non-traditional exports. No
taxes on gains from the sale of shares
held for more than a year. Carry
forward of loss for up to 7 years
Mauritius Freeport Zero percent corporate tax
Mozambique SEZs The incentive scheme differs for SEZ
developers, investors and service
enterprise. For developers, a 5-year tax
exemptions is granted, with a 50%
reduction for the following 5 years, and
25% after than. Businesses investing in
the zone qualify for a 3-year exemption,
and 50% for the following 5 years
(continued)
142 B. ROBINSON
Namibia Export Processing Zones (The EPZs have been accused of being a
tax haven and the Namibian
Government is introducing new SEZ
legislation to counter the misuse of the
incentives)
Exempt from corporate income tax
Nigerian Export Processing Zones All companies and individuals operating
in these zones are allowed a full tax
holiday from Federal, State and Local
Governments
100% capital allowance on qualifying
building and plant equipment
expenditure
Senegal Special Economic Zone An exemption from the flat rate
minimum tax on companies. 15%
corporation tax. Exemption from income
tax
Sierra Leone Tax holiday for 3 years. Accelerated
depreciation of 40% on plant and
equipment the first year and loss carry
forward opportunities
South Africa Corporate tax rate reduced to 15%.
Special allowance for expenditure on
buildings at a rate of 10% per annum.
Youth employment tax benefits
Sudan Free Zones Business tax exemptions and complete
exemption from personal income tax for
foreigners
Tanzania Free Economic Zones 10-year Corporate Tax holiday and 25%
tax rate for the subsequent 10 years.
100% investment deduction on capital
expenditure within 20 years. 10 year
withholding tax holiday on dividends for
non-residents
Togo Export Free Zone No tax during the first 10-year’s of
operation, 15% thereafter. Tax
exemption on dividends during the first
10 years for non-Togolese shareholders.
Payroll tax at the reduced rate of 2%
Uganda Free Zones 10-year Income tax exemption for zone
developers and operators subject to
minimum investment amounts.
Exemption from tax on plant and
machinery used in the Free Zones for
5 years upon disposal
(continued)
6 CRITICAL ISSUES FOR CHINESE INVESTMENT … 143
Zambia Multi Facility Economic Zones Zero percent tax rate on profits for a
period of 5 years; 50% of profits taxed
from years 6–8; and 75% of profits taxed
for years 9–10. Zero percent tax rate for
dividends for 5 years. Investments of
more the US$500,000 are allowed
accelerated depreciation on capital
equipment and machinery for five years
(continued)
6 CRITICAL ISSUES FOR CHINESE INVESTMENT … 145
Table 6.4 Duty free imports of capital equipment and raw materials
(continued)
148 B. ROBINSON
Togo Export Free Zone Exemption from all duties and taxes
on import of raw material as well as
machinery and plant equipment
Uganda Free Zones Exemption from duties on imported
inputs for the exclusive use of the
development of the business, and for
production output of the business
enterprise
Zambia Multi Facility Economic Zone Zero percent import duty rate on
capital equipment and machinery
Nigerian Export Processing zones Rent free land at construction stage, thereafter,
rent becomes payable
Togo Export Free Zone Preferential tariffs on utility services of electricity,
water and telephone
these and other services such as assisting with the application of labour
regulations, the application for work permits, guiding investors with
import and export logistics, assisting with utility connections, and regis-
tration with tax authorities. They can also include a customs office which
will be detailed later in the chapter. Table 6.6 describes some of the ease
of business initiatives available to Chinese investors.
Cameroon’s Industrial Free Zones The National Office for Industrial Free
Zones operates as a one-stop shop and
aims to expedite investment approvals
and respond to investors’ needs
Gabon NKOK SEZ Gabon’s Special Economic Zone
facilitates approvals, company registration
etc. and aims to build a business-friendly
ecosystem
Ghana (Tema Export Processing Zone and Minimal customs formalities
others)
Kenya SEZs One-stop shop service to assist new
companies with regards to labour
regulations, work permits, import–export
logistics, applications for utility
connections, and registration with tax
authorities etc.
Malawi Export Processing Zones The Malawi Investment and Trade
Centre (MITC) acts as a one-stop shop
to assist investors and exporters
Rwanda’s Kigali Special Economic Zone Streamlined government red tape
Senegal Special Economic Zones Streamlined business systems in the
country including company registration
within 24 hours
South Africa One-stop investor service. The
commercial service (Coega SEZ)
provides business analyst services.
Simplified business start-up and license
requirements
Togo Export Free Zone Modern government systems to reduce
bureaucracy, increase transparency and
lower administrative costs.
Single-window system for customs
administration and paperless trade
processes to boost cross-border and
international trade
Uganda Free Zone One-stop center for reducing red tape
Zimbabwe Export Processing Zones One-stop shop investment centre to
facilitate investment, permits and
accessing incentives
6 CRITICAL ISSUES FOR CHINESE INVESTMENT … 151
Cameroon’s Industrial Free Zones The National Office for Industrial Free
Zones is responsible for the granting of
licenses, permits and other authorisations
to businesses and zone developers and
operators. It undertakes to issue licenses
to operate within 30 days of a request. In
conjunction with the country’s
Investment Promotion Center, it assists
businesses throughout the formation and
establishment process
Gabon NKOK SEZ Investment and industry related approvals
are centralised. 24-hour turnaround for
the registration of a company; 7 days for
the issue of exemption certificates; 7 days
for obtaining technical approval, GSEZ
entry authorisation and certificate of
compliance
Ghana (Tema Export Processing Zone and No importing licensing requirements
others)
Kenya SEZs One License requirement with rapid
project approval
Nigerian Export Processing Zones Waiver on all import and export licenses
Rwanda’s Kigali Special Economic Zone One stop registration and licensing
South Africa No license fees in the customs and
control area
Zambia Multi Facility Economic Zones Free facilitation for application of
immigration permits, secondary licenses,
land acquisition and utilities
Cameroon’s Industrial Free Zones The National Office for Industrial Free Zones
operates as a one-stop shop’ to facilitate customs
procedures. It provides streamlined, on-site
inspection procedures and immediate transfer of
goods and services to and from the port of
embarkation or debarkation
Kenya SEZs All zones have an onsite customs office for
customs documentation and clearance
South Africa Customs unit provides simplified customs
procedures
Tanzania Free Economic Zones On site custom inspection of goods in lieu of
off-port inspection
Uganda Free Zone On Site customs inspection
156 B. ROBINSON
The problem with poor accessibility was well illustrated in the Ogun-
Guangdong Free Trade Zone. Even though the Ogun State had promised
to improve access routes, this had not happened. The result was that
the roads were in a terrible state of affairs, and coupled to corruption
along the route, the cost of transporting materials and products was sky-
rocketing in addition to transport times being radically increased. There
is no doubt that this would serve as a major deterrent to investment there
in the future.
The Chambishi Multi Facility Economic Zone in Zambia was very
different on this point. The zone had a state railway line running through
the zone. It also had good roads linking the zone to the various logistical
routes. This was critical as the Zone is ‘deep’ in Africa which necessitates
the transport of goods overland for 1000s of kilometres to Dar es Salam,
Beira or Walvis Bay. New roads were evident—a Zambian project, but
built by the Chinese. Even the airport was being re-built, with current
flights to the nodes of Johannesburg and Addis Ababa providing easy
access to expatriates from China and other African nations.
Location is generally also considered from the perspective of a local
work force and stable social and political environment. Once again,
Ogun-Guangdong Free Trade Zone serves as an example of a problem-
atic location. The Zone’s operators inadvertently found themselves in
the midst of community problems with local strife with the local kings
disputing each others legitimacy, land claims by community members, and
locals plating crops within the Zone and then demanding remuneration
for the crops. It was a messy state of affairs, and the regional government
was doing little to help alleviate the problem.
Location is of course critical with mining related activities. The Cham-
bishi Multi Facility Economic Zone is in the heart of the copper belt
of Zambia. The ‘supply chain is complete’ it was explained—the Special
Economic Zones naturally attracted suppliers for the mining sector.
Safety in general was an important consideration. The Ogun-
Guangdong Free Trade Zone had been moved from its initial intended
location due to a violent attack on Chinese nationals during their prelim-
inary investigations. Zambian investors mentioned that the safety of the
country was certainly an attraction—violent attacks were scarce with only
theft being a problem in the country.
Table 6.11 provides some insights into the location advantages
promoted by Special Economic Zones.
158 B. ROBINSON
Djibouti International Free Trade Zones Djibouti is a centre of global trade routes
and on two of the three busiest shipping
routes globally. With the new railway line
linking Djibouti to Addis Ababa in
Ethiopia, the zone also has access to the
East and Central African markets
Ghana (Tema Export Processing Zone and Ghana is centrally located and a good
others) access point to West Africa. Accra in
Ghana serves as the Secretariat of the
African Continental Free Trade Areas
(AfCFTA)
Kenya SEZs Inter-regional trade hub with good
transport facilities such as the US$3.6
billion SGR railway line linking Mombasa
to Nairobi
Malawi Export Processing Zone Companies can apply for EPZ status if
they produce exclusively for export. The
location can be anywhere of their
choosing
Mauritius Freeport Freeport has direct access to modern port
facilities. Value added logistics services are
also provided including containers yards
and maintenance facilities
Namibian Export Processing Zones Businesses are free to establish themselves
anywhere in the country
South Africa The SEZs are strategically positioned at
commercial and logistics hubs allowing
for access to the South African and
Southern African market, while also some
being strategically located at international
ports or airports for global access
Sudan Free Zones The Red Sea Free Zone is well
positioned on the Red Sea coast with
access to the regional and global market
Uganda Free Zones Export opportunities in the COMESA
market of 19 member countries
Zambia Multi Facility Economic Zones Zones such as the Chambishi MFEZ are
situated in the heart of the copper-belt
6 CRITICAL ISSUES FOR CHINESE INVESTMENT … 159
Fig. 6.2 One in four proportion of the world’s people in 2050 will be from
sub-Saharan Africa (World Bank 2020)
160 B. ROBINSON
Nigeria, has the biggest population in Africa with over 200 million
people, and is expected to double that, if not more, by 2050. Investors in
Nigeria’s zones emphasized the lucrative domestic market, and regional
market. Like South African being the springboard to the Southern African
market, Nigeria offered an opportunity to capitalise on the Western Africa
and Central African market. This was confirmed by all investors spoken
to, who also emphasised the positive economic impact of producing in
Nigeria for the Nigerian market—it is better than importing; products
are much cheaper; and job creation is bolstered.
But it wasn’t all smooth sailing in accessing the domestic market
of Nigeria by Chinese investors. Contradictory policy and regulations
resulted in the situation where some companies were disallowed to sell
on the domestic market. ‘The first two years we were doing nothing’
explained one investor, as they weren’t allowed to sell to the local market
until regulations were amended. The investor spoke of two companies
that he was aware of that had closed as a result of this problem.
As touched upon earlier, production for the export market for certain
industries, such as the textile industry, is difficult for inland zones due
to transport costs. The domestic market, on the other hand, holds enor-
mous potential. The Eastern Industrial Park in Ethiopia is well positioned
to produce for the domestic market, and a denim factory visited was
reaping the rewards of an unsaturated market for clothing in the country.
The zone had approximately 30 textile companies, many small, family
owned, businesses. Their investment decision was based purely on the
large domestic market.
Government has however, begun placing pressure on Zones to
produce exclusively for export. It was mentioned by one investor that
there were 15 Industrial Parks in Ethiopia, but not all were successful.
One of the prevalent problems they experienced was their initial commit-
ment to produce for the export market, but it was cost-prohibitive to do
so, and factories simply had no competitive advantage. The 2nd phase of
the Eastern Industrial Park proviso was that investors were expected to
produce 100% for the export market. This was expected to be a major
deterrent to further investment by Chinese companies.
Some Special Economic Zones actively encouraged investment for the
purposes of selling to the domestic market. This would make sense for
6 CRITICAL ISSUES FOR CHINESE INVESTMENT … 161
The nature of these attributes would determine scale and type of invest-
ment. A simple example of this was in the Lekki Free Trade Zone—
while Nigerians are generally well educated, critical skills were lacking
in the technology sector. This resulted in many Chinese companies
being assembly plants rather than original goods manufacturing facilities.
Another example is the Ogun-Guangdong Free Trade Zone—the zone
had access to relatively cheaper labour than Lagos, and was an important
differentiator between the two Nigerian zones.
Zambians were considered as well educated with the propensity to
benefit from skills training. The Sino-Zam Vocational College of Science
and Technology had been established, with skills training specifically
oriented towards the mining sector—the zones positioning within the
copper-belt region made these skills critical to investors.
Gabon NKOK SEZ promoted the fact that it had ‘relaxed and flexi-
ble’ labour legislation, and Ghana highlighted their competitive minimum
daily wage. South Africa, known for its restrictive labour legislation,
were at pains to point out the various incentives that were in place for
youth employment and skills development, and Coega SEZ provided
recruitment facilities and apprenticeship training centres to help support
investors with critical skills provision.
6 CRITICAL ISSUES FOR CHINESE INVESTMENT … 163
Zambia and Zimbabwe, tourists can buy these (they are often counter-
feits as the original notes are in such demand) for a couple of US$—their
value now is as a collectable souvenir.
Another aspect is the restriction of currency exchange and the repa-
triation of profits. Ethiopia is a good example of a country grappling
with currency problems. Dollar accounts may, without the authorisation
of investors, be converted to the Ethiopian Birr. This makes it difficult
to import critical supplies and equipment, and can be a problem when
trying to repatriate profits. Investors need to be assured that their return
on investment can be channelled back to them when necessary.
Some countries and Zones authorities have provided security in this
regard—see Table 6.14, as well as introduced other guarantees regarding
profits and their repatriation. Djibouti, Cameroon and most of the coun-
tries listed in Table 6.14 offer free repatriation of capital and profits,
providing surety to the investor that they can exit their investment and
retain their profits. Other incentives regard the ability to hold foreign
currency accounts, and thus not be at risk of local currency fluctuations
(Mauritius Freeport and Namibian Export Processing Zone).
6.7 Lifestyle
Lifestyle offered by the host country isn’t high on the list of priorities
as can be evidenced by some Special Economic Zones being situated in
some of the most inhospitable regions of the African continent. At the
Ogun-Guangdong Free Trade Zone, the Chinese spoke of the sacrifices
they had made in coming to the country; how they had to leave their
partners in China; the difficulty of supporting their families in China
when so far away. ‘We are here to work’ was a common refrain. One
investor expressed the culture shock of moving to Nigeria, and the diffi-
culties experienced in communicating (he couldn’t speak English) and
managing his staff.
Chinese operators made some effort to provide a homely environ-
ment in these zones for Chinese residents. Speaking to Chinese expatriates
living in the Lekki Free Trade Zone, they described the boredom of living
in the area. The Zone had what they term a ‘camp’, which provided a
clinic with free facilities, and kitchens for Chinese and Nigerians working
within the zone, but apart from that, there wasn’t much to do. This
was about to change with the investment of a shopping centre within
the zone that would have restaurants and other lifestyle facilities for the
166 B. ROBINSON
(continued)
6 CRITICAL ISSUES FOR CHINESE INVESTMENT … 167
The United States enacted the African Growth and Opportunity Act
(AGOA) in 2000 as an intervention to support development in sub-
Saharan Africa by providing duty-free enhanced access to US markets.
The list of Africa countries that are AGOA Beneficiaries is signif-
icant: Angola, Benin, Botswana, Burkina Faso, Burundi, Cameroon,
Cape Verde, Central African Republic, Chad, Comores, Congo, the
Democratic Republic of Congo, Djibouti, Eswatini, Ethiopia, Gabon,
Gambia, Ghana, Guinea, Guinea Bissau, Ivory Coast, Kenya, Lesotho,
Liberia, Madagascar, Malawi, Mali, Mauritania, Mauritius, Mozambique,
Namibia, Niger. Nigeria, Rwanda, Sao Tome, Senegal, Seychelles, Sierra
Leone, South Africa, South Sudan, Tanzania, Togo, Uganda and Zambia
(2021).
The benefits cover over 6000 products that can be exported to the
US (www.agoa.info provides the full list in their FAQ section). Reading
through the list, some products stand out, such as footwear and textiles.
Some Chinese investors have taken advantage of the Act to set up produc-
tion facilities in Africa and export to the US. A prime example is the
Huajian Shoe Factory in the Eastern Industrial Park in Ethiopia.
Economic Partnership Agreements (2021) exist between the European
Union and the African trade blocs of the East African Community,
the Economic Community of West African States and the Southern
African Development Community. These agreements aim to remove trade
barriers, with the long-term vision of a continent-to-continent free trade
agreement between the European Union and Africa’s Continental Free
Trade Area (AfCFTA). It is in effect a duty-free, quota-free agreement
providing preferential market access to the EU for African goods. In a
6 CRITICAL ISSUES FOR CHINESE INVESTMENT … 169
the China Development Bank and the Agricultural bank have after all
provided financing for Special Economic Zones and Zones’ investors,
while also partnering with the African Development Bank, which in turn,
also facilitated financing. An example of this is in Zambia. The Zambian
government had for many years had a positive relationship with China,
and while the government initially supported the establishment of Special
Economic Zones in the country, it lacked the finances and expertise
to develop such zones. The Chinese government helped indirectly. The
Chinese owned and managed Special Economic Zones in the country was
a result of amongst other funding sources, the Export–Import Bank of
China. There was also a sense of patriotism by the Chinese Zones oper-
ators, and they explained that China’s policy support made them believe
that their investment was safe, and protected from host country ‘issues’.
The Chinese government’s positive attention to Nigeria encouraged
the establishment of the Lekki Free Trade Zone and facilitated investors
putting their money on the table. A packaging company employee in the
Ogun-Guangdong Free Trade Zone explained how the initial investment
was motivated by the business owner visiting the region on other business,
but coming from Guangdong Province in China, he thought it may be a
good idea to invest in the Zone representing his province.
The Eastern Industrial Park operators mentioned the value of repre-
sentatives from both the Chinese and Ethiopian Government visiting the
Zone. This was good ‘propaganda’/public relations for the zone, and
indicated a commitment by the Chinese government to the zone.
• Some countries
introduced a wide range • Investments in SEZs were
of initiatives to facilitate • A wide range of financial Protocol 4: generally low-skilled / semi-
Protocol 2: ease of business Protocol 3: incentives were offered skilled industries
• In-house one-stop shops for both foreign and local • While some SEZs had training
investors Innovation
Ease of and customs office were Preferential centres or colleges to boost
effective • These varied significantly and learning
business Policies skills for SEZ investors, these
• Bureaucratic red-tape was between SEZs were in the minority
generally a constraint to
effective business
Fig. 6.3 The pillars and protocols of the Chinese model of special economic
zones that attract Chinese investment to African zones
172 B. ROBINSON
References
African Growth and Opportunity Act. 2021. AGOA.info. [Online]. Accessed
from https://agoa.info/about-agoa.html.
Economic Partnerships. 2021. European Commission. [Online]. Accessed from
https://ec.europa.eu/trade/policy/countries-and-regions/development/eco
nomic-partnerships/.
Generalized System of Preferences. 2021. UNCTAD. [Online]. Accessed
from: https://unctad.org/topic/trade-agreements/generalized-system-of-pre
ferences.
World Bank. 2020. Population Estimates and Projections. © World Bank.
[Online]. Accessed from: https://datacatalog.worldbank.org/dataset/popula
tion-estimates-and-projections. Assessed 7 July 2021). License: Creative
Commons Attribution License (CC BY 3.0 IGO). (http://creative-commons.
org/licenses/by/3.0/igo/).
There are two underlying themes to this chapter, namely the impact of
wage levels , productivity and labour legislation on attracting invest-
ment in African Special Economic Zones and their appeal from a Chinese
investors perspective, and the opportunity that investment has on localised
job creation and skills transfer in African countries.
The chapter considers the state of employment, skills and productivity
in Africa, detours into a discussion on labour economics, returning to
the choice by Chinese investors of employing home or host country
employees. It then reflects on some of the field research conducted in
Ethiopian, Zambian, and Nigerian Special Economic Zones. Finally, a case
study is presented on South Africa’s labour environment and the Coega
Special Economic Zone with reflections on the Chinese Model of Special
Economic Zones.
So, how big is this problem? This section serves to highlight the
employment problem in Africa while the case study on South Africa and
the Coega Special Economic Zone later in this Chapter will provide some
more in-depth analysis from a country perspective.
(continued)
7 LABOUR: OBSTACLES AND OPPORTUNITIES 179
(continued)
180 B. ROBINSON
(continued)
7 LABOUR: OBSTACLES AND OPPORTUNITIES 181
Source Adapted from The World Bank’s data on completion rates and tertiary education enrolment
rates (2021a)
100
Fig. 7.1 Labour
supply in rural areas
during urbanisation
Labour
supply in
rural areas
0 100
MigraƟon of labour from
rural to urban areas
7 LABOUR: OBSTACLES AND OPPORTUNITIES 183
100
0 900
New labour entrants
from rural areas
1000
Fig. 7.3 Skills training units
and productivity
ProducƟvity
in Units
0 $100
Cost of training
7 LABOUR: OBSTACLES AND OPPORTUNITIES 185
1000
Fig. 7.4 Productivity units
and wage rates
ProducƟvity
in Units due
to training
0 $100
Wage rates as
producƟvity
improved
salary—in this case US$200 was the example given. This made it afford-
able for a ceramic factory in Ogun-Guangdong zone to employ 2000
workers for their labour intensive, but relatively lower-skilled, factory.
Interestingly, the decision to invest in Ogun-Guangdong Free Trade Zone
rather than the Lekki Free Trade Zone, both in Nigeria, was motivated
by the relatively cheaper wages in the Ogun state, which was more rural
that the Lekki Free Trade Zone.
Wages did tend to be higher in the Zones than surrounding areas,
regionally or nationally. In the Chambishi Multi Facility Zone, labour
negotiations resulted in wages being above the minimum wage. Investors
in the Eastern Industrial Park, who aimed to attract efficient Ethiopian
staff and to retain their staff, offered the financial incentive of higher
wages. The higher wage rate was justified due to the individuals’ contri-
bution to productivity—a reflection of the economics detailed previously.
As mentioned before, many companies provided extensive training, and as
skills improved, so did the wages of these Ethiopian employees in an effort
by companies within the Zone to retain their semi-skilled employees. This
was especially necessary as companies that did not train employees often
‘poached’ semi-skilled employees by offering better wages—a bone of
contention in the Zone.
In the Eastern Industrial Park, new companies would recruit staff
through either the Zone’s labour office, or simply go to the main gate.
Most of these new employees were unskilled labour and they fulfilled
unskilled labour requirements for companies. Providing some form of
training assisted in filling the gap for semi-skilled labour requirements.
For higher skilled employees, recruitment was via the colleges. However,
the problem that the zones investors experienced, was that most of these
new recruits had no practical skills—this was different to their experience
in China where students would normally spend a year gaining prac-
tical experience through some kind of apprenticeship before entering the
workforce. This is turn pushed up wages for skilled workers and they
were in short supply. A pharmaceutical company representative in the
Eastern Industrial Park explained that they wanted to train local people
to replace the Chinese, but that this was difficult to achieve when it came
to specialised skills they required.
In Nigeria, the sense was that Nigerians were in general well educated,
and a good source of labour for the Zones’ requirements. Yet, investors
in the Special Economic Zones visited still found there to be a lack of
specialised skills. This restricted the type of industries that were suitable
188 B. ROBINSON
often prefer employing local labour and upskilling them when possible,
rather than employing Chinese labour.
Fig. 7.5 South Africa’s GDP growth (annual %) (The World Bank 2020)
7 LABOUR: OBSTACLES AND OPPORTUNITIES 191
“a huge garbage heap filled with bad things”, “life is over”, “danger and
death”, “a man-made grave”, “a monster”, and “a black heart full of
sorrow and pain; the heart is broken, angry, sore and sad”.
Employment levels in South Africa are extremely low, and while govern-
ment over the years has continually emphasised the need to create and
sustain employment, policies have had limited impact. The problem is
exacerbated by a population that continues to increase and unemployment
is the burden of the younger generation.
Statistics from Stats SA ((2) 2020) indicates very little change year-
on-year between 2018 and 2019, and from a manufacturing perspective,
jobs were actually contracting (Table 7.3). In terms of full-time employees
over the same period, there was a decrease of employment of 0.2% overall,
192 B. ROBINSON
Population demographics
Race: 80.8% Black; 8.6% Coloureds; 8% Whites; 2.6% Indians/Asians
Age: Two-thirds of the population under the age of 35 years with one-third aged
younger than 15 years
Education
20 years and older: 13.9% had some post-school education or tertiary qualification
20 years and older: 43.6% had grade 12
20 years and older: 13.7% regarded as illiterate
53.8% of those employed held Matriculation certificates (grade 12)
21.3% of those employed had tertiary education
Proportion of the employed with higher education qualifications increased by 24.5%
from 1.2 million in 2010 to about 1.5 million in 2017
About 2 million workers only had primary/lower education
Educational enrolments
Enrolments in Higher Educational Institutions increased by 9.3% from 892,936 in
2010 to 975,837 in 2016
The share of these enrolments in Technical and Vocational Educational and Training
(TVET) college enrolments increased by 13.4 percentage points from 28.6% in 2010
to 42% in 2016
Enrolments in Science, Engineering and Technology increased from 28.1% in 2010 to
30.3% in 2016, while humanities increased from 40.6 to 42.6%; the share of
enrolments for Business, Economics and Management decreased from 31.2 to 27.1%
Enrolments in the Sector Education and Training Authorities (SETAs) increased with
the total number of learnership registrations increasing by 105.7% from 49,309 in
2010 to 101,447 in 2016
Skills programme registrations increased by 105.8% from 63,659 in 2010 to 131,017
in 2016
Artisanal programmes enrolments tripled from 9316 in 2010 to 30,817 in 2016
Completion rates for learnerships increased from 69% in 2010 to 57% in 2016
Completion rate for artisanal learning programmes improved by 32 percentage points
from 37% in 2010 to 69% in 2016
Unemployment amongst the various population race groups
75% of the working age population are black
90% of unemployed persons are black
21.8% of coloureds were unemployed
10.1% of Indians/Asians were unemployed
7.1% of whites were unemployed
(continued)
194 B. ROBINSON
Source Adapted from the Skills Supply and Demand in South Africa Report (Department of Higher
Education and Training 2019)
7 LABOUR: OBSTACLES AND OPPORTUNITIES 195
more disengaged they become with the job market. Technical and Voca-
tional Education and Training (TVET) colleges are seen as a solution
to providing skills for employment. Currently there are about 50 such
colleges operating from 364 campuses throughout the country, but
students (and their parents) still seem to be biased towards the more
prestigious universities than colleges. Marumo and Sebolaaneng recom-
mend that there needs to be closer ties between higher education and
secondary schools to provide career guidance for scholars that will assist
them in finding work after graduating. It was also recommended that
TVET colleges and universities shift from a theoretical focus toward
providing practical skills that are relevant and immediately applicable to
the job market.
South Africa has also experienced the so-called ‘Brain-Drain’ of crit-
ical skills. South Africans with sought after skills often succumb to the
attractiveness of employment outside of the country. Higher wages, better
social security benefits and safety in the face of violent crime in South
Africa is one side of the coin. The other is the perception that South Africa
does not offer employment opportunities and job security in the face of
Broad-Based Black Economic Empowerment (B-BBEE) policies of the
country to address historic racial inequalities—this will receive attention
later in the chapter.
An initial report on the impact of the COVID-19 pandemic and subse-
quent lockdown (Stats SA 2020) indicated that 8.1% of respondents who
had been employed had lost their jobs and 1.4% became unemployed in
approximately the first month of the lockdown. Those who had lost their
jobs indicated that this was the result of their place of work closing down.
The percentage of participants who reported that they earned no income
rose from 5.2 to 15.4% by the sixth week of the lockdown. South Africa is
regarded as a country with one of the most severe lockdowns, and at the
time of writing this Chapter, few concessions had been made. The long
terms effects of the lockdown and the COVID-19 cost to the economy
is likely to be extensive even in the face of numerous stimulus packages
offered by the South African Government. It is likely that jobs will be
obliterated during this period.
Productivity in South Africa is a problem. The benefits of a productive
work-force are quite obvious and have direct benefits for the economy:
there is a strong correlation between national productivity and levels
of unemployment, crime, poverty, education and living standards; the
more productive an economy, the more competitive it will be globally
7 LABOUR: OBSTACLES AND OPPORTUNITIES 197
The Special Economic Zones Act of 2014 also allows for different cate-
gories of Special Economic Zones including a free port; a free trade zone;
an industrial development zone; and a sector development zone.
202 B. ROBINSON
agreement that has been entered into with China which will provide a
forum for Chinese officials to share their experience on Zones in order
to equip policy-makers, development practitioners and operators with the
planning, technical, managerial and operational know-how. This could be
a valuable intervention—learning about, and hopefully applying, some of
the critical success factors embedded in the Chinese Model of Special
Economic Zones.
There is a concern though for South Africa’s future efforts to indus-
trialise. The term ‘radical economic transformation’ has become populist
rhetoric by many a politician, and citizens disheartened by years of poor
governance and deteriorating well-being have latched onto the term in
the hope that the policy will provide a quick-fix to the country’s woes.
The Industrial Policy Action Plan 2018/19–2020/21 refers precisely to
this term, and without admitting the contribution poor governance has
had on industrialisation, it suggest that the critical constraint to the IPAP
programme over the previous 10 years has been a lack of transformation
and hence stipulates the objective of “transforming the racially skewed
ownership, management and employment profile of the economy”:
Fig. 7.6 Trends in the number of work stoppages in South Africa, 2014–2018
(Department of Employment and Labour 2019: 2)
day. They attribute some of the action to organised resistance against the
governing ANC—organisations such as the Concerned Citizens Group,
the Western Cape Anti-Eviction Campaign, the Anti-Privatisation Forum,
Landless People’s Movement, many of which adopted class-based political
ideologies.
Another study of the frequency of community protests (Alexander
et al. 2018) use much stronger terminology—they describe the volatility
as ‘turmoil’ and ‘rebellion’. They further explain that this definition is
broader than service delivery protest which is popularly used to depict
the inability of government to provide certain essential services, social
services and infrastructure for a multitude of reasons. The definition
excludes ‘labour-related’ and ‘crime-related’ unrest—labour related unrest
has been dealt with to some extent in the previous section, while ‘crime-
related’ unrest is more ominous in nature where criminality is veiled
7 LABOUR: OBSTACLES AND OPPORTUNITIES 207
Fig. 7.8 Trends in working days lost in South Africa (Department of Employ-
ment and Labour 2019)
SEZ, Musina
B. ROBINSON
OR Tambo SEZ,
Johannesburg
MaluƟ-A-Phofung
SEZ, Harrismith
Fig. 7.9 South African Special Economic Zones (Map data: Google Maps, AfriGIS)
7 LABOUR: OBSTACLES AND OPPORTUNITIES 211
to ‘pluck’ (as in Carpe Diem’s ‘to pluck the day’ meaning) opportu-
nities for industrial development in geographic areas, rather than them
attempting to capitalise on short-term windows of incentives provided by
government in ‘fluid policy environments’ (2012: 119). Taylor mentions
two such locality opportunities in existing industries for Coega investors:
Automotive, agro-processing and logistics.
Coega is perfectly situated in the country’s automotive heartland and
lends itself to investments in this sector. Volkswagen Group South Africa
was established in Uitenhage, an industrial town in the Nelson Mandela
Metropolitan Municipality in 1946 and is today Germany’s largest invest-
ment in South Africa. It is also home to the manufacturer IZUZU and
there are approximately 150 vehicle component manufacturers in the
province. It made perfect sense for the Chinese automaker BAIC to there-
fore invest in the Zone. Daimler Chrysler is situated nearby in the Buffalo
City Municipality in the same province of the Eastern Cape. In addi-
tion, the Eastern Cape Province had a strong agricultural sector, hence
agro-processing opportunities are rife and investments in the Zone in this
sector have begun to materialise (Fig. 7.12).
This Chapter has been dedicated to ‘people’ (Fig. 7.12) from the
perspective of the labour market. It has described how the South African
Industry sector Type of occupational task SEZ rate (from 1 Sept 2017) Department of Labour Minimum
wages (from 1 Sept 2017)
Service providers Task Grade A (Watchman, security officer Entry rate: R25.02 Minimum wage as per Department of
Grade E, general assistant) Zone rate: R26.94 Labour for Security Officer Grade E:
Calculating the monthly wages at 22 days per R4102.00
month at the Zone rate: R26.94 × 9 h per day
× 22 days = R5334.12
Task Grade D (Kitchen supervisor, driver, R37.76 Minimum wage as per Department of
security officer Grade B) R37.76 × 9 h per day × 22 days = R7476.48 Labour for Security Officer Grade B:
R4668.00
Task Grade E (Senior clerk, chef, security R44.50 Minimum wage as per Department of
officer Grade A) R44.50 × 9 h per day × 22 days = R8811.00 Labour for Security Officer Grade A:
R5209.00
LABOUR: OBSTACLES AND OPPORTUNITIES
217
218 B. ROBINSON
South Africa has, however, been grappling with power supply issues
since 2009, and ‘loadshedding’ has been introduced on numerous occa-
sions to protect the integrity of the countries power grid. This is a major
concern for investors that require uninterrupted power supply—one casu-
alty was the loss of anchor tenant Rio Tinto who abandoned their plans
to construct an aluminium smelter in Coega (Fig. 7.15).
References
African Development Bank. 2020. African Economic Outlook 2020 [Online].
Available from https://www.afdb.org/en/documents/african-economic-out
look-2020. Accessed 27 Feb 2020.
7 LABOUR: OBSTACLES AND OPPORTUNITIES 221
4.1.1 China will enhance assistance to African countries, LDCs in particular, to deepen
South–South cooperation and promote common development
4.1.2 The African side applauds China’s efforts in helping African countries reduce
poverty, improve people’s livelihood and implement the 2030 Agenda for Sustainable
Development under the Assistance Fund for South–South Cooperation. China will
share more of its development practices with Africa, support cooperation with Africa on
economic and social development planning, and continue its support through the Fund
to African countries for achieving the SDGs and Agenda 2063 of the African Union
4.1.4 China will extend US$15 billion of grants, interest-free loans and concessional
loans to Africa. For those of Africa’s least developed countries, heavily indebted and
poor countries, landlocked developing countries and small island developing countries
that have diplomatic relations with China, the debt they have incurred in the form of
interest-free Chinese government loans due to mature by the end of 2018 will be
exempted
4.2 This section provides a range of cooperation undertakings to improve medical
health and public access to public health
4.3 The Action Plan provides details of China’s support for improving access to quality
education and skills transfer. This includes a range of scholarships and exchange
programmes and the roll out of Confucius Institutes in Africa
4.4 This section relates to the sharing of China’s Poverty Reduction Experience—some
details are as follows:
4.4.1 The African side appreciates China’s active efforts in implementing the
China–Africa poverty reduction plan, the “Happy Life” and other poverty alleviation
projects to help Africa improve rural public service, enhance skills training for better
employment, improve the environment and living conditions of rural communities, and
protect the health and well-being of African women and children. The African side
appreciates China’s exemption of outstanding interest-free government debts owed by
African LDCs maturing by the end of 2015
4.4.2 China will continue to support the poverty reduction efforts of Africa to deliver
a better and happier life to African people
4.4.4 China will continue to organize workshops on poverty reduction policies and
practices tailored to the needs of African countries, offer degree education on poverty
reduction and development for African countries, and help train specialized personnel
from Africa. China will continue to create new models of training to maximize the
effect and put in place a China–Africa poverty reduction training and exchange network
spread of the virus and calling it the ‘Chinese virus’ or ‘kung flu’.
China counteracted, affirming its support of the World Health Organ-
isation, accused by the USA and others of bias towards China. China
adopted the knick-named ‘masked diplomacy’, initially providing personal
protective equipment (PPE) to 18 countries in Africa mostly in West
Africa; sent medical teams to support health services in Ethiopia and
Algeria; while also providing technical and medical advice on treating
COVID-19 in Mozambique. Private Chinese individuals contributed as
well, with the much-publicised donations of medical equipment and
supplies to Africa’s Centre for Disease Control and Prevention. African
countries burdened by economic troubles were also supported—debt
service suspension agreements were reached with 12 African countries
and waivers were provided on matured interest-free loans for 15 African
countries.
An ‘Extraordinary China–Africa Summit on Solidarity Against
COVID-19’ was held in June 2020, with representatives from China, the
African Union, and various African leaders. The Summit was focussed on
addressing the threats the pandemic posed on the health and economic
welfare of African countries with various undertakings by China to
support mitigating the damaging effects of the various lockdown inter-
ventions and lives lost to COVID-19. It made the commitment that
should China develop a vaccine against the coronavirus, it would make
this available to developing countries.
It is not all rosy though. There have been criticisms against Chinese
investors in Africa. The mining sector is one area that has received nega-
tive publicity in this regard: accusations of evictions and displacement
of communities; damage to communal land; lack of community engage-
ment; and exploitation of workers and harmful working conditions.
Figure 8.1 illustrates how poorly maintained the roads are to the Ogun-
Guangdong Free Trade Zone—the Zones investors confirmed that they
will be partly rebuilding this road which will be invaluable to the local
community’s access to the city of Lagos.
most Chinese working within the zones. Not all Chinese investors and
workers were negative though. Speaking to an investor of a small service
company, he declared Zambia as being good: ‘business is good, tired of
city life in China’, preferring the friendly people, landscape, climate and
more laid-back Zambian pace of life. In actual fact, he had encouraged
family to come visit and tour Zambia.
When I posed the question of what the biggest difference was between
China and Nigeria, one interesting response was that in China people
are of the ‘same tribe, same language’, but in Africa, there are just so
many tribes, cultures, traditions and religions. One example provided by
a ceramic factory owner at Ogun-Guangdong Free Trade Zone in Nigeria
was the difficulty of operating 24 hours, with the Christian component
of the workforce unwilling to work Sundays and those of the Islam faith
adhering to Friday prayers. Once the investor understood these differ-
ences, he adapted the work schedules to alternate between Christian
and Muslim employees to allow them to participate in their respective
religious activities. Language is also an obvious problem—most of the
Chinese engineers and operators were unable to speak any English. The
work ethic differed as well, with one Chinese investor explaining that ‘the
way they think and work: totally different… Chinese work hard and fast,
push Nigerians to do the same, leads to lots of arguments’.
Having considered the social aspect of these Chinese Special Economic
Zones in Africa, attention is now directed towards the environmental
impact of these zones.
1. China should set its own target of mitigating its own greenhouse
gas emissions
2. China should support developing and least developed countries,
such as is the case in many African countries, in achieving their
targets through financial assistance, technology transfer and capacity
development.
This would also imply, at the very least, that China’s footprint in Africa,
through its developmental support and foreign direct investment, is
responsible in terms of mitigating greenhouse gas emissions.
The submission then details specific actions that China has embarked
upon, or intends to embark upon, to combat climate change. These
actions are detailed in Table 8.2.
In 2009, China committed to the 2020 goal of lowering carbon dioxide emissions per
unit of GDP by 40–45% from the 2005 level; increase the share of non-fossil fuels in
primary energy consumption to 15%; and increase forested area by 40 million hectares
and forest stock volume by 1.3 billion cubic meters compared to the 2005 levels
China has implemented the following plans: The National Program on Climate
Change; the Work Plan for Controlling Greenhouse Gas Emissions during the 12th
Five-Year Plan Period; the Comprehensive Work Plan for Energy Conservation and
Emission Reduction for the 12th Five Year Plan Period; the 12th Five Year Plan for
Energy Conservation and Emission Reduction; the 2014–2015 Action Plan for Energy
Conservation, Emission Reduction and Low-Carbon Development; and the National
Plan on Climate Change (2014–2020)
By 2014 China achieved the following: Carbon dioxide emissions per unit of GDP was
33.8% lower than 2005 levels; the share of non-fossil fuels in primary energy
consumption was 11.2%; forested area and forest stock volume increased by 21.6
million hectares and 2.188 billion cubic meters compared to the 2005 levels; the
installed capacity of hydro power was 300 gigawatts (2.57 times that of 2005); the
installed capacity of on-grid wind power was 95.81 gigawatts (90 times that of 2005);
the installed capacity of solar power was 28.05 gigawatts (400 times that of 2005); and
the installed capacity of nuclear power was 19.88 gigawatts (2.9 times that of 2005)
By 2030, China’s intends to achieve the following: Achieve the peaking of carbon
dioxide emissions around 2030 and making a concerted effort to peak early; to lower
carbon dioxide emissions per unit of GDP by 60–65% from the 2005 level; to increase
the share of non-fossil fuels in primary energy consumption to about 20%; and increase
the forest stock volume by about 4.5 billion cubic meters from the 2005 level
The submission also details the following intended policies and measures to combat
climate change: Implement proactive national strategies on climate change; improve
regional strategies on climate change; build a low-carbon energy system; build an
energy efficient and low-carbon industrial system; control emissions from the building
and transportation sectors; increasing carbon sinks; promote a low-carbon ‘way of life’;
enhancing climate resilience; innovating a low-carbon development growth pattern;
supporting science and technology improvements around climate change; providing
financial and policy support; promoting a carbon emission trading market; improving
statistical and accounting systems for Greenhouse gas emissions; stakeholder
participation; and promoting international cooperation on climate change
8 THE SOCIAL AND ENVIRONMENTAL IMPACT … 239
Table 8.3 Chinese water-related policies (Adapted from Key Water Policies,
Chien 2019)
Policy Objective
Implementation Plan for the War on Urban Reduce the water cleaning rate to over
Black and Smelly Water Body Control 90% for cities by the end of 2020
Special Action Plan for the Environmental Cities are to complete a campaign for
Protection of National Drinking Water Sources environmental protection by 2019
Opinions on Innovation and Improvement of Improve pricing mechanisms on urban
the Price Mechanism for Promoting Green water supply
Development
Assessment Standards for National Requirements to qualify as a
Water-saving Cities water-saving city
Table 8.4 Chinese industry and technology-related policies (Adapted from Key
Policies: Industry and Technology, Chien 2019)
Policy Objective
Three-year Action Plan for Resolutely Winning Water use to be improved to prevent
the War on Pollution Prevention and Control pollution
of Industry and Communication Industry
Notice on Promoting Financial Support for Support of innovative green
Industrial Green Development in development
Country-level Regions
Notice on Issuing the Appraisal Indicator Revision and consolidation of
System of Clean Production for 14 Sectors indicator systems for cleaner
production
Action Plan for the Pollution Prevention and Specific intervention to promote green
Control of Waste Lead-acid Batteries development of the lead-acid industry
China and Africa will enhance policy dialogue and technological exchanges on energy
and resources, coordinate each other’s energy and resource strategies, conduct joint
research, and formulate energy development plans that are operable and based on local
conditions. The two sides will work together for the establishment of a China–Africa
Energy Cooperation Center in Africa to further advance energy exchanges and
cooperation
The two sides encourage and support Chinese and African companies, while upholding
the principle of mutual benefits, to work together in energy trade and the investment,
development and operation of energy projects, carry out demonstration projects in
green energy financing, and explore green and sustainable ways of energy
cooperation. China will support the development of renewable energy, mainly solar
energy in Africa as well as the use of battery storage and strengthening of the
electricity grid
The Chinese side supports Africa’s capacity-building in the energy sector, and will
provide professional training for personnel from competent authorities, research
institutions and key companies of relevant countries to improve Africa’s capabilities in
developing and managing their own energy systems
The Chinese side will, on the basis of respecting the will of African countries, explore
third-party cooperation with Africa in the energy sector, where each side can leverage
their strengths, provide policy recommendation for Africa’s energy development, and
work for progress of relevant projects
The two sides will actively consider the joint establishment of a China–Africa
Geoscience Cooperation Center for joint research on national resources sustainability
and environment, in order to gain greater ability for the sustainable development
and utilization of national resources by the respective countries
coastal and marine economic zones, emphasis is made that such develop-
ment and cooperation should promote “sustainable approaches that are
environmentally, socially and economically effective”.
Table 8.6 specifically refers to environmental protection and the
mitigation of climate change detailed in the Action Plan.
The commitments are far reaching, and include a strategic approach
through the China–Africa Green Development Plan, to practical interven-
tions around issues such as mitigating the risks of climate change; pollu-
tion control; smart cities; low-carbon development; forest management;
combating desertification; protecting wildlife including specific efforts
to combat illegal trade in wildlife; and supporting disaster management
when environmental disasters occur (highlighted).
244 B. ROBINSON
The African side appreciates China’s efforts in actively implementing the China–Africa
green development plan to improve Africa’s capacity for green, low-carbon and
sustainable development, and also China’s efforts in implementing projects on clean
energy, wildlife protection, environment-friendly agriculture and smart cities, and
China’s support in Africa’s endeavor toward green, low-carbon and sustainable
development
China has decided to undertake 50 projects for green development and ecological
and environmental protection in Africa to expand exchanges and cooperation with
Africa on climate change, ocean, desertification prevention and control, and
wildlife protection. China will also work with Africa to raise public awareness of
environmental protection
The two sides will work together to set up a China–Africa environmental cooperation
center, and deepen environment cooperation through more policy dialogue and joint
research on environmental issues and stepping up exchanges and cooperation on the
environment industry and technical information sharing, among others. China will
continue to implement the China–Africa Green Envoys Program to strengthen
Africa’s human capacity for environmental management, pollution prevention and
control, and green development, and continue to enhance capacity-building and
promote the green development of Africa
The two sides will promote cooperation on sustainable forest management, and
conduct practical cooperation in the trial, demonstration and extension of programs
between Chinese and African governments and research institutes to achieve
sustainability in forest management and contribute to global ecological
governance
The two sides will work together to build a China–Africa Bamboo Center and actively
support Africa’s capacity-building in the sustainable management of bamboo and
rattan resources, the innovative development of bamboo and rattan industries, the
development of their products and poverty alleviation, and relevant industrial policy
and standardization. The two sides will work to carry out international bamboo and
rattan demonstration projects and improve Africa’s ability to utilize rattan and bamboo
resources in a sustainable manner and to modernize the industry
China will support Africa in its capacity-building for the prevention and treatment of
desertification. China welcomes African countries to use its model and technology of
desertification treatment in light of their real needs and apply it locally through
demonstration projects
(continued)
8 THE SOCIAL AND ENVIRONMENTAL IMPACT … 245
The African side highly appreciates Chinese government’s support for Africa’s efforts
to protect wildlife resources and crack down on poaching and illegal trade in
wildlife, and its own initiative to stop domestic commercial ivory processing and
sale. The two sides will enhance cooperation in the protection of wildlife, and better
communicate and consult each others’ positions on inter-governmental agreements,
international conventions and other multilateral occasions. China will continue to
collaborate with African countries on improvement in capabilities for wildlife
protection, provide ecological protection training opportunities and explore
cooperation on demonstration projects, combat illegal trade in wildlife and wildlife
products, and incentivize those who have made outstanding contribution in
anti-poaching and combating the illegal trade of wildlife
China will continue to provide Fengyun meteorological satellite data, products and
necessary technical support for African countries, and to provide meteorological and
remote-sensing application equipment, education and training support for African
countries, in order to contribute to the implementation of the integrated African
Strategy on Meteorology (Weather and Climate Services), and to better equip African
countries for disaster prevention and mitigation as well as climate change response
China will deepen pragmatic cooperation with African countries under the framework
of Climate Change South-South Cooperation, and help African countries
strengthen climate change adaption capabilities through providing assistance in kind
and capacity-building training to jointly meet the challenge posed by climate change
The two sides will improve the multi-tiered dialogue mechanism on disaster prevention,
mitigation and relief, and expand exchanges over risk monitoring and evaluation of
drought, application of anti-drought technology, community-level drought
resistance capabilities, emergency response, and post-disaster reconstruction
China will hold regular workshops and training sessions on disaster risk management,
application of disaster relief and mitigation technologies, and public awareness
campaigns for disaster management teams, technical professionals and communities
from Africa. China will, depending on the situation, send experts to local communities
to guide and organize such training and capacity-building activities
In times of disaster emergency, China will provide quick mapping service using space
technology upon the request of African countries
has for decades suffered from mercurial rainfall—the country has experi-
enced numerous severe droughts and floods. Global warming promises to
exacerbate the problem. The study considered various scenarios of climate
change impact, with their Dry2 scenario resulting in a reduction of annual
rainfall over 2045–2055 of 10–25% in the central highlands and 0–10% in
the south, and 25% in the North of the country. The potential impact of
this vulnerability is concerning—47% of Ethiopian GDP is a function of
agriculture; the damage to the road transport system from flooding could
disrupt supply chains; and the ability of dams to provided hydropower
and irrigation may be compromised. The study estimates that under a
Dry2 scenario, GDP losses could be between 6 and 10%.
Ethiopia is also a party and has indicated its intention to limit the coun-
try’s greenhouse gas emissions in 2030 to 145 MtCO2 or lower, which
equates to a 255 MtCO2 reduction from the ‘business-as usual’ scenario
(expected trajectory of emissions without intervention) in 2030—a 64%
reduction (Federal Democratic Republic of Ethiopia’s Intended Nation-
ally Determined Contribution 2015). This sectoral reduction is illustrated
in Fig. 8.6.
Ethiopia has developed the Climate Resilient Green Economy Strategy
(CRGE) to assist in achieving the ambitious target, and the strategy is
integrated into the Second Growth and Transformation Plan. There is
a proviso though: “Ethiopia’s INDC is contingent upon an ambitious
multilateral agreement being reached among Parties that enables Ethiopia
to get international support and that stimulates investments” (2015: 1).
The Chinese government and Chinese investors have introduced a
number of initiatives to assist Ethiopia in combatting climate change: In
2020, China provided Ethiopia with a microsatellite to assist the country
in researching the effects of climate change by monitoring droughts,
floods, water resources and forestry; Chinese funded and built wind
farms (Adama I and II) for cleaner energy production; and Chinese
and other funders financed the contentious Gibe III dam to generate
much-needed hydroelectric power for Ethiopia and the region—while
hydroelectric power is low-carbon by its very nature, concerns have
been raised regarding the negative impact this may have on communities
downstream and the environmental damage caused by such large scale
dams.
As has been previously suggested, Ethiopia is a water scarce country,
which makes it particularly susceptible to climate change. These limited
8 THE SOCIAL AND ENVIRONMENTAL IMPACT … 249
much more detail in this regard. In addition, standards have been set for
air quality, an Environmental Protection Authority has been established,
and various other policy initiatives have been made.
Whether this policy has been effectively implemented, and whether
the regulatory bodies have been established or capacitated to monitor
and enforce the various policies, is questionable. Tefera et al. (2016)
suggests that “the progress achieved so far in adopting wastewater treat-
ment facilities seems to lag behind the target period. In addition, there
is an inadequate supply of air treatment plants in the industrial sectors
that emit pollutant to the environment”. Yale University’s Environmental
Performance Index 2020 (Wendling et al. 2020) ranks Ethiopia 134th of
180 countries. Various sub-indexes are also provided and Ethiopia ranks
as follows: Air quality 90th; Heavy metals 166th; Climate Change 166th;
Pollution Emissions 166th; Waste Management and Water Resources, one
of the pool of countries with a score of 0. These rankings suggest that the
country is struggling to improve environmental standards in the country.
the Ethiopian emission guidelines. While Pb effluents were high from the
tannery, these did not exceed the guidelines (Zinabu et al. 2018).
30 of the companies that have invested in the Zone are textile
companies. They are mostly small companies, some family owned. Their
investment has been galvanised by the more than 110 million popula-
tion in Ethiopia—a lucrative market for their products (the logistical costs
of transport makes exporting prohibitive). The dying process of denims
(one of the factories visited) requires a lot of water, and the wastewater is
discharged. The standards for the quality of the discharged water is low
from a regulatory perspective: “water must not be coloured”. The onus
of responsibility therefore rests on the textile factory owner.
254 B. ROBINSON
• Enterprise development
• Local community • Integration with
• Infrastructure has positive
development and neighbouring cities
spin-offs for local
Pillar 5: urbanisation Pillar 6: • Positive migration and Pillar 7: communities
• Infrastructural benefits urbanisation
• Failure of government to
People • Access to services and Integration • Integration with local Infrastructure meet their infrastructural
facilities communities
obligations
• Conflict with local • Relatively small scale
communities
Fig. 8.12 The African SEZ pillars and protocols of the Chinese Model of
Special Economic Zones in Africa
References
Adeba, D., M. Kansal, and S. Sens. 2015. Assessment of Water Scarcity and Its
Impacts on Sustainable Development in Awash Basin Ethiopia. Sustainable
Water Resources Management 1: 71–87.
António, N., and S. Ma. 2015. China’s Special Economic Zones in Africa:
Context, Motivations and Progress. Euro Asia Journal of Management 44
(25): 79–103.
Bräutigam, D., and X. Tang. 2011. African Shenzhen: China’s Special Economic
Zones in Africa. The Journal of Modern African Studies 49 (1): 27–54.
Chen, Y., A. Ebenstein, M. Greenstone, and H. Li. 2013. Evidence on the
Impact of Sustained Exposure to Air Pollution on Life Expectancy from
China’s Huai River Policy. Proceedings of the National Academy of Sciences
of the United States of America 110 (32): 12936–12941.
Chien, T. 2019. Key Water Policies 2018–2019: China Water Risk, March 19.
Accessed from: http://www.chinawaterrisk.org/resources/analysis-reviews/
key-water-policies-2018-2019/. Accessed 8 May 2019.
8 THE SOCIAL AND ENVIRONMENTAL IMPACT … 257
While this chapter will not address issues such as government policy
towards the environment or labour issues which have been covered in
other Chapters, it will highlight particular areas of interest that were
identified when speaking to zone operators and investors: these include
political leadership commitment to Special Economic Zones; political
stability, security and safety; government policy; corruption; infrastruc-
ture; service delivery; and ease of business. A case study on South African
SEZ’s infrastructure is also provided, before concluding with an evalua-
tion of the pillars and protocols benchmarked against the Chinese model
of Special Economic Zones.
9.1.1 Ethiopia
The general sentiment in the Eastern Industrial Park was reasonably posi-
tive towards the Ethiopian, and China’s, government support for Zones
in the country. The level of support was evidenced by the fact that
the Eastern Industrial Park had been visited on a number of occasions
by high-ranking Chinese and Ethiopian Government officials, and this
produced good publicity for the Zone in China which encouraged further
investment, thus supporting the Zone’s operator’s marketing efforts.
9 AFRICAN GOVERNMENTS’ ENABLING (OR CONSTRAINING) … 263
In its early days, the Eastern Industrial Park was regarded by govern-
ment as an industrial park with no significant incentives or support
for the Zone’s Chinese investors and operators. This resulted in the
investors facing bureaucracies, inefficiencies, high costs for transport, and
currency shortages. Ethiopian legislation also precluded the operators
from sub-leasing land to investors in the zone.
Fei and Liao (2020) describe how a sudden shift in government atti-
tude and policy changed the status quo, and they provide a number of
examples of the positive nature of these changes: Special Economic Zones
were identified in development plans as a key strategy for promoting
agriculturally based, manufacturing-driven and export-oriented industri-
alisation; it supported SEZ development by the federal government or
through public–private partnerships; provisions on government control
of Special Economic Zones were removed; implementation strategies
focussed on creating an enabling environment for Zones; and a wide
range of policies were enacted to attract investors from tax exemptions
to logistical support.
9.1.2 Zambia
The Zambian Government, visibly supported by the Zambian President,
with the help of the Chinese Government and Chinese Financial Insti-
tutions, encouraged and facilitated the Chinese owned Zambia-China
Economic and Trade Cooperation Zone.
This has however changed thanks to the change of governments over
time. The zone operators spoke of the difficulty this created: There was
a perceived lack of understanding by officials of what Special Economic
Zones’ objectives were and what policy instruments were necessary for
them to be successful—“some haven’t even heard of a Zone before”.
This led to a lack of support for the Zone’s activities, and incentives for
investing, being reduced.
According to the Zone’s operators, government had unrealistic expec-
tations of the Special Economic Zone. “They want investment, but don’t
know how it works to attract investment”. One example that was provided
as a disincentive to invest, was property tax, where the more they invested
in property, the more tax they paid.
264 B. ROBINSON
9.1.3 Nigeria
The differences in political willpower are clear between Nigeria, Ethiopia
and Zambia. There are also differences between regional government
support, such as the differences in Federal State support in Nigeria. Two
Special Economic Zones were visited in Nigeria, one in Lagos State where
Lekki Free Trade Zone is situated, the other in Ogun State where the
Ogun-Guangdong Free Trade Zone is home.
The Lagos State leadership have driven the establishment of the
Lekki Free Trade Zone, and while there are certainly shortcomings, the
zone operators do commend the State Government for their support.
The Lagos State Government recognised the need for diversifying the
economy, industrialising, and adopting an export orientated development
approach. Lagos State was ready to embark on a path of internationalisa-
tion and the Chinese Government realised that this signified an opportune
time to reach out and support investment in the region. The Zone
also has a significant Nigerian ownership stake, with 40% of the zone’s
ownership being in Nigerian hands, with Nigerians sitting in important
leadership positions.
There was some mention of certain obligations being unmet, resulting
in the downscaling of the initial project scope. It seems the Chinese
investors and government waited to ensure their investment was met with
Lagos Government commitment to certain infrastructural investments.
The Ogun-Guangdong Free Trade Zone receives much less support
than their counterparts in Lagos State, where broken promises, poor to
non-existent service delivery, and lack of engagement, characterise the
relationship between the Ogun State government and the Zone’s oper-
ators—“they (government) just don’t put the effort in” was a comment
9 AFRICAN GOVERNMENTS’ ENABLING (OR CONSTRAINING) … 265
from one of the Zone operator’s employees. Another investor stated that
“85% of tax income for the state comes from this industrial area (the
Zone and surrounding industrial area), but the state does nothing”. Even
though the state government hadn’t lived up to their commitments, they
were “already ready to collect dividends” from the Zone’s investors. The
issues of friction with communities mentioned in the previous chapter,
and the unwillingness of the State Government to intervene, is another
example of the perceived lack of support the Zone operators experience.
9.4 Corruption
It is a well-known that African Nations all struggle with corruption.
Considering the Corruption Perception Index of 2020 published by
Transparency International, it becomes evident the seriousness of the
problem. Sub-Saharan Africa scores the worst among the world’s regions
with an average of 32 (100 being corruption free and 0 being completely
corrupt). The Corruption Perception Index Map illustrates the degree of
corruption in shades of yellow to red, red being significantly more corrupt
that yellow—the African continent stands out with the darker shades of
red. Figure 9.1 indicates the least and most corrupt countries in Africa in
terms of the index.
The Global Corruption Barometer Africa 2019: Citizen’s Views and
Experiences of Corruption provides even greater detail on the problem.
The survey is extensive, covering 35 African countries with 47,000 partic-
ipants. The findings are disturbing: 55% believed corruption had increased
in the previous 12 months while 23% thought it had decreased; 59%
believed their government were doing a poor job of tackling corruption
and 34% thought their government was making progress in dealing with
corruption; a quarter of participants who had utilised a public service
in the preceding 12 months had had to pay a bribe which equates to
approximately 130 million people, with the percentage being as high as
80% for participants in the Democratic Republic of Congo; while 67% of
participants were fearful of retaliation if they reported corruption.
While there is a view and some empirical research (Quazi et al. 2014)
supporting the hypothesis that corruption increases Foreign Direct
Investment in Africa—the so-called ‘helping hand’ of corruption facili-
tating commerce when institutional capital is lacking, there is also much
evidence to refute this view. The ‘grabbing hand’ of corruption can be
a huge unknown variable for investors and does detract from investors
willingness to invest in Africa.
The countries in which initial Chinese Special Economic Zones were
situated were mostly those with ‘reasonable’ levels of perceived corrup-
tion: Mauritius is one of the best scores at 53; Ethiopia at 38; Egypt and
Zambia at 33; and Nigeria at a lower 25. While Nigeria was low, it is
still a far cry off from the bottom-rung score of 12 for South Sudan and
Somalia. There are concerns that some of these countries are heading
down the slippery slope of corruption, such as Zambia dropping five
points of the Corruption Perceptions Index since 2013.
9 AFRICAN GOVERNMENTS’ ENABLING (OR CONSTRAINING) … 271
9.5.1 Ethiopia
Ethiopia’s government has embraced China’s willingness to invest in
major infrastructural projects, resulting in some of the following major
transport investment: the Addis Ababa modern light rail urban commuter
‘tram’ system; an extensive road network of urban and national roads; and
the important Addis Ababa to Djibouti railway line that serves to connect
land-locked Ethiopia to the world (Figs. 9.2, 9.3, and 9.4).
272 B. ROBINSON
Fig. 9.3 The imposing new railway stations on the outskirts of Addis Ababa
and Dire Dawa
While these projects improve the efficiency of the city of Addis Ababa
and support the logistics of importing and exporting, the road infras-
tructure has also directly linked the city to the Eastern Industrial Park
(Fig. 9.5).
9 AFRICAN GOVERNMENTS’ ENABLING (OR CONSTRAINING) … 273
Fig. 9.4 Queues to board the modern carriages from Dire Dawa to Addis
Ababa
Fig. 9.5 The 3-lane highway between Addis Ababa and the Eastern Industrial
Park
274 B. ROBINSON
9.5.2 Zambia
Zambia has reasonably good roads (the Chinese have contributed to the
building of much of the more recent road infrastructure) and a railway
line traverses the zones, thus connecting the Zone to essential routes to
transport goods and materials. In the zone itself, no infrastructure was
provided by the Zambian government, with the zone operators having
to build all the roads and ensure their own water, sewerage and power
provision.
outcomes such as damage the product and result in labour hours lost;
and the resultant loss of orders due to unreliability of production.
Independent power provision provides the Chinese Zones in Africa
with an enormous competitive advantage for attracting investment. In
Ogun State, it was estimated that the government’s National Electric
Power Authority (NEPA), now replaced by the Power Holding Company
of Nigeria (PHCN), was only able to provide about 3–4 hours of power
per day—the Zone is therefore one of the few location options for a
company wishing to invest in the state.
Even having their own power plant wasn’t without its challenges. At
the Ogun-Guangdong Free Trade Zone, a gas pipeline fed the gas to the
powerplant. However, the quality of the gas was sometimes substandard,
and the reliability of supply of the gas was often erratic—“One month
every year, no gas”—or the pressure too low. Terrorist attacks on the
supply gas lines were one reason. The manager at the Power Plant mused
on another—while Nigeria has vast petroleum resources, the government
didn’t supply these to its own people, preferring to export these natural
resources.
The gas supply problem resulted in the Power Plant having to have
a backup of diesel power generation, which was more expensive. Some
companies in the Zone had opted to invest in their own power genera-
tion to secure their supply. This relatively more expensive supply detracted
from the Zones global competitiveness for FDI from Chinese and other
investors.
Zambia’s local power provision by the state-owned Zambia Electricity
Supply Corporation was also unable to keep with demand, resulting
in 12–15 hours of loadshedding per day. The Chinese investors in the
Zambia-China Economic and Trade Cooperation Zone have invested
US$27 million in building a sub-station to provide power for its investors.
Interestingly, the power station is connected to the national grid and there
is an undertaking by the Zambian government to pay this amount back
(Fig. 9.14).
9 AFRICAN GOVERNMENTS’ ENABLING (OR CONSTRAINING) … 281
Fig. 9.14 The Zambia–China Economic and Trade Cooperation Zone Power
Station
Their Doing Business 2020 report does not paint a good picture for
Africa. Only two African countries score in the Top 50 rankings out of
190 countries in the survey—Mauritius (13) and Rwanda (38). Other
notable countries were South Africa at an ‘average’ of (84) and Zambia
at (85), but many Africa countries found themselves towards the end of
the list: Nigeria (131), Ethiopia (159) and the usual culprits right at the
bottom of the list, Eritrea (189) and Somalia (190).
9 AFRICAN GOVERNMENTS’ ENABLING (OR CONSTRAINING) … 283
9.7.1 Bureaucracy
Bureaucracy was burdensome to most people at the zones. In Ethiopia
a zone operator described the frustration of having to go into Addis
Ababa four times to meet a government employee, and each time, he was
a no-show—‘It takes patience’. An investor said that nobody wants to
finish on time—no “tension”—when referring to an example of it taking
2 months to have a fixed telephone line installed by the state-owned
telecommunications company.
in the zone, but the most significant of such automotive investors is the
Beijing Automotive Industry Holding Co., Ltd., branded as its acronym,
BAIC.
BAIC is a Chinese state-owned enterprise which invested in the region
of ZAR 11 Billion (US$770 million [ZAR1 = $0.07]) in BAIC South
Africa. The South African Industrial Development Corporation, a state
development finance institution, owns 35% of the project (Fig. 9.18).
World class infrastructure All infrastructure is in place including roads, bulk water
and sewer networks, telecommunications sleeve networks,
electrical substations (HV and MV), and overhead power
lines (although, noting the power limitations discussed
earlier)
Regional and international logistics • The zone is strategically positioned on the main
Southern Hemisphere east–west shipping routes
• It is served by two ports with exceptional container
capacity and is the hub of container traffic served by the
world’s top shipping lines; and has superior container,
vehicle, breakbulk and bulk terminals
• It is complemented by direct road and rail links to the
rest of South and Southern Africa (noting, again, the
constraints of the poor rail infrastructure within the
region)
World class support systems • ICT Solutions for supply chain management, budgeting,
procurement and financial management
• Customs Control Areas (CCA) in the Logistics and
Automotive Zones
• In-house expertise in delivering infrastructural projects of
all sizes within budget and on time
One-Stop Investor Services Centre • Full human relations support including recruitment,
training and managing labour relations
• Assistance with visa applications, work and study permits,
applications for municipal services
• Assistance with applying and optimising the benefits of
incentives
• Facilitation of environmental approvals and license
requirements for project development
• Customs services to assist with all South Africa Revenue
Services (SARS) Customs Registrations and permit
processes in preparation for approval of facility for
operational phases
• The Zones ‘Package of Plans’ approach allows statutory
approvals for Site Development Plans and Building Plans
to take place with 10 days
Skills development • Systems are in place to assist investors with skills
development
• Advanced system for registering work-seeker and
competency-based recruitment functionality
• Apprenticeship training centre
Other Other reasons to invest are also detailed, such as the range
of incentives, robust governance to mitigate corruption,
and the environmental attributes and lifestyle offered in the
beautiful Nelson Mandela Bay Municipal area and its cities
• PoliƟcal leadership support • Government support varies
from significant to minimal, • SEZ policy driven by industrial
varies significantly between policy
countries and tends to change over
Pillar 1: • Policy uncertainty
Pillar 2: Ɵme and due to leadership Pillar 3:
• Support deteriorates, or • ConflicƟng incenƟves and
9
changes disincenƟves
improves, over Ɵme
Leadership • Diīerences in support can • Export orientaƟon limiƟng FDI
• Support can fluctuate with Government vary between naƟonal, Government
support • Import restricƟons
change of leadership support regional and local level Policy • Currency fluctuaƟons problemaƟc
• PoliƟcal stability influences • CorrupƟon not eīecƟvely
investment in SEZs addressed
Fig. 9.19 The African SEZ pillars and protocols of the Chinese Model of Special Economic Zones in Africa
AFRICAN GOVERNMENTS’ ENABLING (OR CONSTRAINING) …
289
290 B. ROBINSON
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Blimpo, M., and M. Cosgrove-Davies. 2019. Electricity Access in Sub-
Saharan Africa: Uptake, Reliability, and Complementary Factors for Economic
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PART IV
This book has considered Special Economic Zones in China and the
lessons that their successes, and sometimes failures, have for African
Special Economic Zones; the factors that attract investment in zones by
the Chinese and others; the socio-environmental impacts of zones, and
the enabling or constraining impact host governments and their policy
interventions have had on the success of these Zones. Chinese owned
and operated Zones in Africa, and non-Chinese African Zones have been
evaluated through a variety of case studies and the sharing of insights
from investors garnered during visits to a variety of Zones on the African
continent.
Special Economic Zones that have been relatively successful and that
provide insights into the face of African Special Economic Zones of the
future are reflected upon in this chapter—these are the Special Economic
Zones in Mauritius and Rwanda.
Taking the lessons from the Chinese Model of Special Economic
Zones and introducing some home-grown lessons from the Mauritian and
Rwanda case studies, the Pillars and Protocols are revisited and reflected
upon in terms of their propensity to attract Chinese investment to Africa’s
Special Economic Zones. Three new Arches are introduced to the model,
which is then renamed the African Model of Special Economic Zones.
Fig. 10.1 Rwanda’s GDP from 1960 to 2020 (Word Bank 2021)
296 B. ROBINSON
has positioned itself as 4IR ready, with the best network readiness in the
region and 95% 4G LTE network coverage with over 7000 km of fibre.
The country prides itself on an investor friendly environment, ranking
38 on the World Bank’s Ease of Doing Business Index, and is 2nd in
Africa in this regard. It assesses and revises its business environment on
an annual basis and introduces investor-friendly reforms where shortcom-
ings are identified. Business registration is free and quick—6 hours to
register a business. The one-stop center assists with investment and post-
investment support—a dedicated team will guide the investor throughout
the process. Visas and work permits are relatively easy to obtain on arrival,
with exclusions allowed for residents of African Union member countries.
Incentives are significant. A seven-year tax holiday is provided for
investment of more than US$50 Million. Corporate income tax is 15%
if 50% of production is exported outside the region or investment is
in specific high priority sectors; and 0% tax is payable if the regional
headquarters are in Rwanda. Accelerated first-year depreciation rate of
50%. Duty free imports of machinery and inputs within the East African
Community. There are specific incentives geared towards priority indus-
tries, for instance, ICT firms are allowed VAT exemptions on IT equip-
ment. There are no restrictions on foreign ownership; no restriction on
capital flows; and capital gains tax exemptions are provided on the sale or
transfer of shares.
Chinese investment in the country are clearly discernible: The Kigali
City Tower, the tallest building in Kigali, was built by the Chinese as well
as numerous public and private buildings; public service facilities; and
many roads and other infrastructure are thanks to the Chinese govern-
ment and Chinese investors. The fact that Kigali has so little in terms
of minerals and other extractive resources and their landlocked status
that limits exports in any case, supports the view that while China does
covet Africa’s abundant resources, this is not the only motivation for their
investment.
The Kigali Special Economic Zone (2020) (Fig. 10.2) was a merger
between the previous initiatives of the Kigali Free Trade Zone and the
Kigali Industrial Park. Prime Economic Zones Ltd is the promoter, devel-
oper and operator of the zone with socio-economic development objec-
tives as the primary goal—job creation and skills transfer; technological
transfer; increased tax revenue thanks to an increased tax base; envi-
ronmental protection; industrial development including sectors requiring
specialised infrastructure; import substitution; and export growth and
diversification. It has accessed over US$100 million to develop the zone in
two phases. The first phase provided for the provision of superior service
infrastructure of roads, power, water, as well as fibre optic cables, with a
total of 97 plots over 98 hectares. The second phase of about double the
size, with one particular plot earmarked as an ICT Park.
The Zone has been relatively successful in attracting foreign investors
in the following industries: Construction, manufacturing, agro processing
and food processing, beverages, textiles clothing and leather, wholesale
Fig. 10.3 China Star Construction in the Kigali Special Economic Zone
300 B. ROBINSON
Fig. 10.4 Carnegie Mellon University Africa in the Kigali Special Economic
Zone
and skills transfer, and investments such as the Carnegie Mellon Univer-
sity Africa (Fig. 10.4) is entrenching the zone as an innovation hub for
Rwanda, the region, and the continent. So, the question can be posed,
what has facilitated the relative success of the Zone?
• Modelled on internaƟonal
Fig. 10.7 Protocol 1
Protocol 1: best pracƟces
of a phased approach • Annual business
Phased environment revision and
approach investor-friendly reforms
• Reduced bureaucracy
Fig. 10.8 Protocol of
Protocol 2: • Significant support for
ease of business
investors
Ease of • Simplified local
business government
administraƟon
Indian Ocean. Yet, both countries have defied the odds and become two
of Africa’s flagship economies, and both have adopted Special Economic
Zones as a key tool in economic development.
Mauritius is, however, the benchmark, with undoubtedly the most
successful adoption of the Special Economic Zone framework than
elsewhere on the continent.
It has also leveraged the limited natural resources it had. The estab-
lished sugar industry allowed it to develop its export market and bring
in foreign exchange, helped along by preferential trade agreements. The
natural beauty of the country lent itself to diversifying into the tourism
market, and the islands now support a successful tourism industry.
The economy has been well managed through conservative fiscal and
monetary policy. Good governance and strong institutions contribute
towards it providing an enabling environment for business. If one
considers the Corruption Perceptions Index (2020), sub-Saharan Africa
achieved a low 32/100, while Mauritius achieved 53/100, and ranked
52 out of 180 countries, much higher than most of its African peers.
10 TOWARDS IMPACTFUL SPECIAL ECONOMIC ZONES IN AFRICA 305
• Phased approach
Fig. 10.17 Protocol 1: developed as lessons were
Protocol 1:
Phased approach learnt and mistakes made
• Adapted to economic
Phased
change internally and
approach externally
market, but also facilitated Foreign Direct Investment from Hong Kong
to Mainland China.
Location was mostly well chosen by African Special Economic Zones.
Location to the domestic market was an important consideration for some
investors who wanted to sell goods on the domestic market, although this
was not always possible due to the export orientated policy of the country.
Regional access was also a consideration for investors, such as Mauritius
being regarded as a springboard into Africa. Unfortunately, trade with
neighbouring countries was often constrained by trade barriers or poor
infrastructure. Adoption, and more importantly, implementation of the
African Continental Free Trade Area (AfCFTA) holds much promise to
free up regional trade. Such a trading bloc could negotiate preferen-
tial agreements with other trading blocs. The Chinese Belt and Road
Initiative (BRI) could complement AfCFTA and facilitate significant trade
between African nations and the rest of the world. The importance of un-
restrained trade warrants the inclusion of the second African arch, namely
African Arch 2: Inter and Intra-African continental trade (Fig. 10.22).
While access to markets was one consideration, some zones were
selected for other, justifiable, reasons: Being close to industrial hubs facil-
itates an efficient supply chain and provides a market for goods; raw
materials availability in the area; for mining companies, zones would
need to be in the heart of the mining activity where mineral resources
are found. Labour supply in the area was important, both from the
perspective of investors requiring human resources, but also from the
Sustainable development
Protocol 1: Protocol 2: Protocol 3: Protocol 4: Protocol 5: Protocol 6: Protocol 7: Protocol 8: Protocol 9: Protocol 10: Protocol 11: Protocol 12:
Phased Ease of PreferenƟal InnovaƟon Favourable Phased Modern InternaƟonal Addressing Social Export Diversified
approach business policies & learning Investment approach service cooperaƟon short- system orientaƟon industries
Climate delivery comings
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328 B. ROBINSON
© The Editor(s) (if applicable) and The Author(s), under exclusive 329
license to Springer Nature Singapore Pte Ltd. 2022
B. Robinson, African Special Economic Zones,
https://doi.org/10.1007/978-981-16-8105-9
330 INDEX
automotive, 27, 121, 209, 211, 212, bureaucratic red tape, 148
285 Burkina Faso, 17, 168, 176, 178–180
aviation, 109 Burundi, 78, 113, 168, 176, 178–180
business climate, 70
business confidence, 191
B business environment, 216
balance of payment, 18, 325 business-friendly, 296
Bangladesh, 113, 114 business services, 27
Beautiful China, 239, 241
Beijing, 102
C
Beijing Action Plan
Cabo Verde, 176, 179, 180
2018, 100 Cambodia, 127
2019–2021, 89, 90, 92, 100, 226 Cameroon, 113, 118, 141, 143,
Belarus, 169 150–152, 155, 166, 168, 176,
Belt and Road Initiative (BRI), 71, 178–180
77, 92, 103, 104, 107, 108, 315 Canada, 169
beneficiation, 209, 211 capacity building, 18, 106
of mineral and natural resources, capacity development, 237
201 Cape Verde, 113, 168
Benin, 118, 168, 176, 178–180 capital, 11, 13
bilateral, 89, 129, 233, 262 capital equipment, 163
bilateral financial cooperation, 77 capital flows, 297
bilateral relations, 108, 169, 287 capital formation, 66
bilateral trade, 88 capital gains tax, 140
Blue/Ocean Economy, 23 capital gains tax exemptions, 297
blue economy, 107 capital markets, 15, 16
Botswana, 15, 26, 130, 168, 176, Central Africa, 14, 160
179–181 Central African Republic, 168, 176,
bottlenecks of infrastructure, 98 178, 179
Brain-Drain, 196 certificates of origin, 129
Brazil, 102, 103 Chad, 168, 176, 178–180
bribery, 143 chemicals, 27
BRICS bank, 19 children, 90
BRICS (Brazil, Russia, India, China China, 4
and South Africa), 19, 88, 323 China-Africa Developmental
BRICS Plus, 102, 103 Financing Forum, 107
Broad-Based Black Economic China-Africa Development Fund
Empowerment (B-BBEE), 163, (CADF), 104, 125, 126
196 China-Africa Financial Cooperation
broken promises, 313 Consortium, 107
bureaucracy, 20, 49, 154, 219, 252, China-Africa Fund for Industrial
263, 283, 296, 313, 319 Cooperation, 104
INDEX 331
economic development, 225, 303 environment, 74, 78, 90, 92, 101,
economic growth, 10, 14, 17, 27, 37, 108, 148, 199, 227, 235, 237,
97, 182, 201, 209, 216, 235, 242, 296, 302, 322
250, 269 environmental agency, 247
economic growth and diversification, environmental compliance, 246
13 environmental consideration, 62
economic participation, 13 environmental controls, 255
Economic Partnership Agreements environmental degradation, 225, 235
(2021), 168 environmental impact, 241, 247, 255
economic performance, 3 environmental impact assessments,
246
economic policy, 191, 197
environmental negligence, 66
economic reforms, 305
environmental policy, 250
economic slowdown, 80
environmental protection, 242, 244,
economic transformation, 105 250, 298
education, 21, 27, 28, 70, 87, 91, environmental regulation, 255
162, 177, 186–188, 193, 196, environmental security, 241
226, 227, 296, 302, 303, 316, environmental standards, 322
324 environmental support, 242
education and skills, 12 environmental sustainability, 10, 13,
Egypt, 9, 14, 15, 88, 102, 117, 23
126–129, 270, 271 Equatorial Guinea, 113, 176, 178,
electricity, 153 179
electricity supply, 202 equipment, 161
Emerging Market and Developing Eritrea, 90, 113, 118, 176, 178, 180,
Economies (EMDEs), 108 282
Emerging Market Economies (EME), Eswatini, 88, 100, 102, 168, 176,
108 179, 180
emerging market investors, 27 Ethiopia, 9, 10, 15, 17, 22, 26, 90,
emerging markets, 109 102, 127–130, 154, 156, 158,
employability, 13, 90 168, 175, 176, 178, 179, 184,
186, 189, 228, 230, 247, 248,
employment, 18, 99, 115, 175, 204,
250, 251, 262, 264, 267, 270,
216, 227, 251, 305, 325
271, 276, 282, 283, 325
employment regulations, 283
ethnic, 303
enabling environment, 263 Europe, 21, 77
energy, 27, 97, 101, 106, 108, 109, European Union, 168, 169
212 European Union’s Coutanou
enforcement of regulations, 255 Agreement, 94
enterprise development, 99, 229, 317 exchange programmes, 227, 233
entrepreneurs, 261, 281, 309 exchange rates, 268
entrepreneurship, 13, 16, 30, 70 excise duty, 146
334 INDEX
interest free concession, 18 Kenya, 17, 26, 78, 113, 114, 116,
interest-free loans, 227 118, 124, 141, 146, 148,
interest rate, 15 150–152, 155, 158, 168, 176,
internal reserves, 19 179, 180, 226, 295
International Bank for Reconstruction knowledge-based economy, 296
and Development (IBRD), 17 Korea, 36
international best-practices, 319 Kuznets’s curve, 235, 322
international cooperation, 62, 238,
323
International Development L
Association (IDA), 17 labour, 68, 94, 98, 241
International Monetary Fund (IMF), labour cost, 161
16, 18, 100, 105, 108 labour disputes, 162
international trade, 11, 18 labour-employer relations, 208
investment, 95, 103, 105, 109, 113, labour environment, 214
175, 261, 262, 264, 271, 280, labour force growth, 66
285, 293, 296, 306, 307, 313, labour intensive, 42, 111, 137, 186,
314, 319 187, 316, 325
investment climate, 321 labour legislation, 161, 175, 189,
investment decision, 139 208, 216
investment-friendly, 109 labour market, 181, 209, 213, 215,
investment incentives, 65 305
investment promotion, 296 labour market policies, 208
investor confidence, 66 labour market reform, 209
investor friendly, 305 labour office, 187
investor-friendly reforms, 319 labour productivity, 161
investors, 298 labour regulations, 149
Ivory Coast, 168 labour supply, 315
land, 68
land claims, 157
J land reforms, 65
Japan, 169 land utilisation, 53
job creation, 160, 161, 175, 190, language, 235
197, 208, 209, 228, 229, 267, language barriers, 162, 317
285, 287, 298, 299, 307, 314, Latin America, 111, 242
317, 321, 324 law and order, 13
job market, 196 law enforcement, 90
justice, 28 leadership, 264
leadership support, 62, 213, 301, 312
learning, 65, 66
K Lesotho, 18, 26, 115, 168, 176,
Kazakhstan, 169 179–181, 246
338 INDEX
U
Uganda, 26, 78, 113, 122, 142, 145, W
148, 150, 155, 158, 167, 168, wage levels, 94, 175, 216, 316
176, 178, 179, 295 wage rates, 181, 186, 307
unemployment, 181, 191, 195, 196, wages, 184, 185, 316
203, 208, 212, 226, 305, 316 water, 129, 153, 274, 318
unionisation, 189 water pollution, 239
unions, 312 water resource, 20
United Kingdom, 169, 177, 181 water scarcity, 239, 250
United Nations 17 Sustainable water treatment, 276
Development Goals, 27 well-being, 11, 19, 23, 27, 28, 57,
United Nations Framework 90, 203, 226, 227, 237, 302,
Convention on Climate Change 309, 316
(2015), 236 West Africa, 14, 228, 265
United Nations (UN), 89, 90, 105, Western Africa, 160
108, 323 Western Europe, 27, 241
United States’ African Growth and Western Sahara, 3
Opportunity Act (AGOA), 94 wildlife protection, 93
INDEX 345
Win-Win, 103 Y
win-win cooperation, 89 young, 216
women, 23, 90, 227 youth, 23, 108, 194, 195, 265, 296
working conditions, 228 youth employment, 162
work permit, 149, 297, 306
work stoppages, 207
work visa, 152 Z
World Bank, 16, 100, 105, 108 Zambia, 26, 78, 95, 113, 123, 124,
127–130, 143, 145, 146, 148,
World Bank Group, 17
151, 158, 162, 164, 167, 168,
World class infrastructure, 155, 284
170, 175, 176, 179, 180, 186,
World Health Organisation, 228
188, 230, 235, 246, 247, 263,
World Trade Organisation, 43, 108
264, 268–270, 274, 276, 280,
282
Zhuhai, 40, 54
X Zimbabwe, 14, 15, 89, 90, 95, 113,
Xiamen, 40 123, 150, 164, 176, 177, 179,
Xi, Jinping, 73, 77, 85, 108, 239, 312 180, 212
Xiong’an New Area, 73 zone infrastructure, 153