Dar faces 1.6trn/- loss over EPZ limitations

Dr Chami
Tanzania stands to lose revenue estimated at a staggering US $1 billion (1.6trn/-) over the next five years,  due to gross limitation of the Special Economic Zones   (SEZs) and Export Processing Zones (EPZs) programme.

The zones have the potential for exporting goods worth $300 million every year, but only $400 million has  been realized from goods exported during the last five years.

The minister for Industry, Trade and Marketing, Dr Cyril Chami, says notable achievements have been recorded  in that line of business, but they would have been bigger, were it not for a couple of stumbling blocks.

He was speaking  in Dar es Salaam yesterday, at the inauguration of a new  Board of Directors  for the Economic Processing Zones Authority (EPZA), an event at which Prime Minister Mizengo Pinda was the guest of honour. 

Dr Chami  cited  delays caused by congestion at the Dar es Salaam port, lack of reliable electricity, delay in issuance of work permits  and difficulties  in securing tax exemption as investment incentives, as among the major stumbling blocks.

Those problems posed a serious challenge, the minister noted, telling the audience further: “The challenges include lack of enough fund allocation from the government budget, which causes the Export Processing Zones Authority (EPZA) to fail to execute fully its development plans.”

He pointed out that failure by the government to allocate enough funds for development of  areas that had been earmarked as investment centres, curtailed  the authority’s capacity to meet obligations such as compensating people who would have to vacate them, and infrastructure development.

The minister cited a 60 acre area in Kurasini for the envisaged  China-Tanzania Logistic Centre, whose current residents would  be compensated to the collective tune of  about Sh60 billion. The centre would be a major holding centre for Chinese goods and host a variety of factories.

Dr Chami said the ministry and EPZA were currently engaged in a spirited joint bid to secure soft loans from the governments of China and Japan, as well as the  World Bank, the African Development Bank, and local pension funds, to push the programme forward.

Earlier, EPZA Director General Dr Adelhelm Meru said despite the challenges, the outgoing board had seen the number of companies licensed under the EPZ programme growing to 63, creating direct employment for 14,000 people and  indirect jobs  for 60,000  others. 

“For the past five years, the value of invested capital has grown to about $712 million and exports have also increased to $390 million to date,” he said.

He explained, however, that, the current data fell short of the Authority’s strategic plan of seeing the value of exports reach $300 million a year.The EPZs programme in Tanzania was established in 2002 by the Export Processing Zones Act,2002, which was amended in 2011.

Source: The Citizen,www.thecitizen.co.tz, by Al-amani Mutarubukwa
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