EPZA opts for bond, share-sell to develop SEZs
The Export Processing Zones Authority (EPZA) has embarked on an ambitious plan to engage the private sector in its entirety to develop Special Economic Zones (SEZ) through the capital markets by issuing bonds or share sales.
The authority wants to tap the opportunity offered by capital markets in particular the Dar es Salaam Stock Exchange (DSE) a move that will boost the country’s exports.
The EPZA Director General Charles Itembe said recently after meeting with Orbit Securities, an investment advisor in the implementation of the plan, that they have received some advice and are exploring the best options.
“We have received various pieces of advice from stakeholders who participate in the capital markets…and we see the direction is that we can get the financial innovation solutions to stimulate the development of vertical infrastructures like industrial sheds and warehouses as well as other logistics equipment to be used in the development of SEZs,” he said.
The EPZA provides developers’ licences to manufacturers in SEZs that allow exporting up to 80 per cent of the goods, thus boosting foreign exchange earnings but also guarantee increased employment opportunities for Tanzanians.
Mr Itembe said the funds sourced from the main capital market can help in swift and easy implementation of the SEZs projects because they are mobilised at one time rather than involving individuals, the process that can take a long time and delay the country’s SEZ development.
Thus, he added, getting a huge sum of money at one time can help stimulate many investment areas, improve investment climate and speed of investing and through this plan the government will be involved in laying basic fundamental infrastructures to open these areas for the private sectors to invest in vertical infrastructures like industrial sheds, warehouses as well factories of highest priorities.
Therefore, by doing this pooling of financial resources will attract large capital from local investors including retail, corporate, institutional as well as foreign investors can invest in vertical infrastructures like industrial sheds and warehouses for renting industrial spaces.
“It is through this ambitious plan that domestic investors with small capital can join together with big investors in different schemes like industrial real estates to construct the industrial sheds and warehouses for renting industrialists,” he said.
Through this financial innovation, various funds are likely to be created and allow Tanzanians to increase their disposable income by renting industrial space across Special Economic Zones.
“We have initiated talks with some stakeholders including the United Nations Capital Development Fund (UNCDF), FSD Africa, Afrieximbank and Yusra Sukuk Company Ltd who have a wide network with global investors to bring green financing.
“Through this, we can help individual Tanzanians participate in the huge investment targeted including the Bagamoyo Special Economic Zone where we have concluded the master plan and feasibility study,” he said.
The alternative financing option is the right way to bring huge infrastructure capital and speed up productive investments to the nation and also for individuals through the capital markets.
“We have already involved Orbit Securities as an investment advisor and we are continuing to get various stakeholders views.
“We have also engaged and received advice from the Capital Markets and Securities Authority (CMSA) and DSE and we continue to visit other experts who are market participants,” he said.
He said upon the completion of the move of getting stakeholders’ views then EPZA will be in a position to be in consultation with the government through the Ministry in the President’s Office, Planning and Investments, and the Ministry of Finance on how to use effectively alternative source of financing to increase productivity as well as getting sufficient funds to develop all the SEZs.
