Free economic zones in Tanzania

Special economic zones (SEZs) have been successfully used as an industrial policy tool in many countries. Efforts to create SEZs in Tanzania began in 2002 and were boosted by the creation of the Export Processing Zones Authority (EPZA) in 2006.

The key objectives of EPZA are to attract and promote export-oriented investments through the EPZ and SEZ programs, assist investors under the EPZ and SEZ programs, and issue EPZ and SEZ licenses to investors. Once an investor obtains an SEZ or EEA license, no other license is required except in highly regulated industries such as food and medicine.

Special economic zones include export processing zones, free ports, free trade zones, industrial parks, science and technology parks, ICT parks, agricultural free zones, tourism development zones and business incubators.

SEZs in state special economic zones and industrial parks

The government is developing industrial parks in Tanzania as a platform to support industrialization. The first government industrial park was built in 2006 in Mabibo Outer Dar es Salaam, which proved to be a successful proof of concept for industrial parks. in Tanzania with diversified industrial activities.

• SEZ Benjamini William Mkapa

The Benjamin William Mkapa SEZ was the first industrial park established and owned by the government, which offers serviced land for lease to SEZ investors. The park is strategically located in the outer zone of Mabibo, along the Nelson Mandela Road (Dar es Salaam). The park covers a total area of 65 acres, while industrial sites and factory buildings occupy 74% of the area, equivalent to 48 acres. The government, through the EPZA, supervised the construction of infrastructure in the BWM-SEZ in 2006.

The constructed infrastructure includes serviced industrial sites, a clinic building, a canteen building, shopping arcades, a water tank, a customs building, roads, street lights, a fence and an administrative block with sufficient office space. There are a total of 14 projects, mainly carrying out production activities for export, with serviced areas allocated in the park.

•  Bagamoyo SEZ

The government, through EPZA, is developing the mega-industrial and commercial park “Bagamoyo SEZ” covering an area of 9,800 hectares, located in Bagamoyo, a coastal region, 50 km north of the city of Dar es Salaam. The project is being developed under the Special Economic Zone (SEZ) scheme and will provide EEA and SEZ investors with world-class industrial infrastructure, efficient government services, and favorable financial and non-fiscal incentives. The park is already home to 11 licensed companies, most of them at various levels of development, with the exception of one, which is fully operational. Investors can rent empty land for their own development.

• Nala Special Economic Zone

The Nala Special Economic Zone covers an area of 1,500 acres (Phase I - 100 acres) and is located in the Nala district, approximately 21 kilometers from the center of Dodoma city, adjacent to the Dodoma Highway — Singida. The project site is located in close proximity to a standard gauge railway (less than 10 km). A phased approach to development will be adopted, with the initial phase (Phase I) involving the development of 100 acres.

The project site is connected to all the necessary supporting infrastructure (gravel road, electricity, water and telephone communications) and has already attracted significant investment. This is the ongoing construction of a large fertilizer plant, namely Intracom, which is being built by investors from Burundi and upon completion, its annual capacity is expected to produce a total of 600,000 tons of fertilizers. and 300,000 tons of limestone.

• FEZ Mtwara

The Mtwara SEZ covers an area of 2600 hectares, which was allocated for the Mtwara SEZ. Only 110 acres of land near the port of Mtwara were declared in the government gazette as a free port zone.

• Tanga SEZ

The Government of Tanzania has allocated a project area of 1,363 hectares of land in the Tanga region, Nima region, for the Special Economic Zones project. Compensation was made on an area of 750 hectares. Tanga City has been identified as the proposed location for a development cluster as a starting point consisting of various major infrastructure programs required to enable Tanga City to develop as the eastern gateway for the northern regions. The city has been identified as the international gateway to the region via the Tanga Super Corridor – Dodoma and also as a center for international trade and commerce. Investors are also welcome to jointly develop industrial parks with the government. The site is connected to the national grid and water is also available in the area from TANGA WSSA and can be connected upon request. Water supply in Tanga town is very reliable and the area is close to the Tanga-Pangani road.

• Bunda — SEZ Mara

The land has been surveyed, graded, fully compensated, owned by the government under the Export Zone Authority (EPZA) and reserved for industrial development. Bunda — one of the cotton producing areas in Tanzania. 5 km west of Bunda town in Ghouta district, 67 km from Musoma town, Mara region, the area is 1284 hectares (3173 acres) with plots of varying sizes from 2 to 4 hectares (5-10 acres).

• Manyara

EPZA has an investment area of 500 hectares, equivalent to 1253 acres. The site is located in the Manyara region in the small town of Mererani in the Simanyiro district. The area is accessible by road, electricity and water. The government is currently in the early stages of development of this area, creating all the necessary infrastructure in its territory so that it can be used for industrial purposes and economic activities.

• Kigamboni
• Ruvuma
• Magnoni

SEZ of local self-government

To keep pace with economic growth and to help the central government create infrastructure for industrial parks in various parts of the country, the SEZ Act allowed local governments to develop and own SEZ areas by creating adequate basic infrastructure and then attracting investment in these areas. To achieve these goals, the following regions have already created SEZs, and some regions have already started activities in these areas.

• Kigoma SEZ

The project covers an area of 3000 hectares. The first phase of the project consists of an area of 691 hectares that has already been developed by the Kigoma Regional Secretariat, while the remaining land will be developed jointly with the private sector through a PPP. The feasibility study and master plan for the first phase of the project have been completed. The park has developed into an industrial and commercial complex and a trading center with neighboring countries. Investors are encouraged to develop Kigoma Industrial Park, commercial and ICT parks, warehouses, hotels, banks, schools, hospitals, residential complexes, etc.

• Geita SEZ
• Songwe SEZ
• SEZ Nyaishimbi Kahama Shinyanga
• SEZ Nyamhongoro Ilemela Mwanza

SEZs owned by private companies

In terms of investment, under the SEZ Act 2006, private companies are allowed to build or own special economic zones (SEZs), which means building basic infrastructure including roads, electricity, water and fencing, and then inviting other companies to come and rent or buy industrial sites for operating factories using EPZ and SEZ licenses. These investors will be provided with all the benefits as investors located in state SEZs.

At the moment, thanks to this system, Tanzania has received some investors who have built special economic zones, namely:

• Kamali SEZ — Bagamoyo
• Global SEZ — Mkuranga
• SEZ Star City — Morogoro
• FEZ Khifadi — Dar es Salaam
• Kisongo SEZ — Arusha
• Kilwa SEZ — Coastal Region
• Mkinga SEZ — Tanga
• FEZ Vigora Kisarawe Pwani
• Magnis Technologies (T) Ltd (SEZ “Nachu”)
• Mingxin Ltd — Pwani
• Heritage Empire SEZ (Cabodia Industrial City)

Autonomous EPZ

The Export Trade Zones (ETZ) Act 2002, which was also amended in 2006, allows individuals to own an EPZ, that is, to have a factory that produces goods for export. Thanks to this program, more and more companies continue to produce for export in various parts of mainland Tanzania. The advantage of this program is that one can build his own factory anywhere in mainland Tanzania, in an area that he likes and suits his investment project, and receive all the benefits of investors located in SEZ zones.