Employment creation and structural transformation are amongst the two
major challenges facing the countries of Sub-Saharan Africa at present.
Based on the understanding that appropriate growth policies will be able
to address these challenges, this paper examines whether Special
Economic Zones (SEZs) could be an important ingredient of such
strategies. So far many African SEZs have been unable tocreate
significant employment or foster structural change. However, there are
some positive exceptions with respect to employment creation in
countries such as Mauritius, Kenya, Lesotho, Madagascar and Ghana. The
SEZs that have contributed to structural transformation are located
mainly outside Africa (e.g. Malaysia and Singapore) and these
experiences show that it takes a great deal of complementary policies to
enhance the positive impacts.
We argue that SEZs may still play a more important role in SSA as long
as SEZs are retooled to 1.facilitate growth adequately using good
quality policies and adequate support institutions; 2. emphasise the
clustering aspects of zones and 3. are able to adapt to new global
conditions. This involves taking risks which may only pay off when
policies can be implemented consistently backed up by significant
capacity and fit in with overall growth strategies.
The evidence on the success and failure of using SEZs as a growth and
employment policy tool seems to indicate that social cohesion,
employment generation, and structural transformation are often found
together. We suggest there is a virtuous circle amongst social cohesion,
good quality growth policies and beneficial outcomes, which in turn
increases social cohesion.
We also provide new econometric evidence which suggests that SEZs in
Kenya have helped to create some 40,000 manufacturing jobs and increased
manufacturing labour productivity by some 20% in the decade to 2006 (or
2% per annum). This suggests that in principle it is possible for SEZs
to be both job creating and productivity enhancing, although there are
also questions about whether the transformative productivity effects can
be sustained forever.
Kingombe, C.; te Velde, D.W. Structural Transformation and Employment Creation: The Role of Growth Facilitation Policies in Sub-Saharan Africa. The World Bank, Washington DC, USA (2012) v + 26 pp.
Structural Transformation and Employment Creation: The Role of Growth Facilitation Policies in Sub-Saharan Africa