Special Economic Zones in the OIC Region:
Learning from Experience
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shop’ for investors. Within some zones, particularly within Sub-Saharan Africa (SSA), this has
hindered the promotion of zones and the facilitation of investor interest.
The operational ‘know-how’ and lack of institutional knowledge is a key challenge for
developers when identifying partners to provide the operational and zone management
functions. There have however been some successes in this regard in certain zones such as the
Lekki Free Zone based on the influence of Chinese Investment. The Chinese stakeholder has
conducted several workshops/study tours for local partners to understand the Chinese/East
Asian experiences in SEZ development and to facilitate knowledge sharing practices.
4.5.1.4 Key Challenge 4: Poor Quality Business Case and Economic Rationale
The scale, geographic location and development model of SEZs are key challenges for OIC
Member Countries and there have been particular examples of where a lack of economic
rationale for SEZ development has led to failure of the zone. In order to achieve success there
must be a clear link between the attributes of the zone and government policy objectives to
ensure that the zone programme is solidly rooted and is likely to attract strong political and
institutional support. In addition, SEZs need to be integrated into the wider economy and a clear
understanding of how SEZs can help to address national economic development and economic
priorities needs to be established.
Box 21 - SEZ Development in Nigeria – Calabar EPZ
There have also been documented challenges in terms of developing a strong economic case for
site location and sector selection. In some OIC Member Countries there may be a strong political
will regarding the decisions about site location and sector selection. International experience
has shown that the location of an SEZ in a country, and particularly its proximity to major trade
gateways such as ports and airports, is critical to SEZ success and growth.
The decision to establish EPZs in Nigeria in the 1990s was based on a vision to increase
manufacturing exports. A decision was made to establish a ‘flagship’ EPZ in the Cross Rivers State
in the City of Calabar. At that time however, Calabar was not a major manufacturing or logistics
centre within the country and the port of Calabar was relatively small compared to other ports
within Nigeria. The port was not located in a strategically advantageous location and as such there
were significant challenges in attracting export-orientated investment to the zone. As a
consequence, the zone failed to develop as planned.