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Africa expands use of EPZs.

A number of African countries are adopting privately run Export Processing Zones (EPZs) to stimulate export development. These countries expect to attract export businesses from the United States, Europe and Japan to create jobs, exchange technology and increase economic growth. When the zones in Togo and Kenya become fully operational later this year, they will be the first privately run EPZs in sub-Saharan Africa.

Export Processing Zones are special areas in a developing country where local and foreign industrial enterprises produce goods for international markets. These areas are usually exempt from normal tax codes, custom, duty and labor restrictions. These exemptions allow firms to flourish.

In countries such as Cameroon, Namibia and Congo, the zones are still on the drawing board. But in Togo and Kenya, EPZs are almost ready to start operation.

In Togo the buildings, roads and telecommunications facilities needed for the zone are being constructed by a consortium of three firms, led by the U.S. giant Trammell Crow Construction Co. In Kenya, EPZ legislation is already in place; and Sameer Industrial Park Ltd., the Nairobi EPZ, is fully constructed and seeking tenants.

Government-operated EPZs have existed in Liberia and Senegal, but they have failed to keep foreign investors. "African governments don't provide the same kinds of services that a private developer who has to make money is impelled to provide," says Michael Stack, director of special projects at the Overseas Private Investment Corp., a U.S. development agency. "The private developer can respond quickly to the needs of tenants, because he doesn't have to operate an unwieldy bureaucracy."

However, interest in Togo's EPZ has been good. More than 36 firms have gained admission. According to Mark Apter, president of the Togo Information Service in Washington, D.C., there are five American firms and a cross-section of European and African firms. So far, no African-American owned firms are involved in any of the EPZs.

Fritz McLymont, chair of the international trade division of the National Minority Business Council, says African-Americans should get involved in African EPZs. "[EPZs] can give us access to different markets that we cannot access from the United States. African-American firms can take capital and technology to Africa and get lower production costs. Productivity is the name of the game, and if we can bring capital, management experience and technology to the formula, our African partners will be in a much better position," asserts McLymont.

Robert Starling Pritchard, chairman of the PanAmerican/PanAfrican Association Inc., in Baldwinsville, N.Y., adds: "We can compete in the international market if we go to less developed countries and produce for export."
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Title Annotation:Export Processing Zones
Author:Chigbo, Okey
Publication:Black Enterprise
Date:Feb 1, 1992
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