Developing African countries could attract substantial foreign direct investment (FDI) if they developed special economic zones (SEZs) and improved international trade.
Chinese economist Jason Cheng said this during the 2017 seminar for journalists from African countries in Beijing, China.
He said for African developing countries to grow at a fast rate, governments need to build land and develop resources to make foreign investments easy.
SEZs are designated areas within a county with special economic regulations and aim at increasing trade, investment, job creation and effective administration to encourage easy setting up of business in a country.
Since 2009, special economic zones have been set up in several African countries including, Mauritius, Ethiopia, Nigeria, Egypt, Algeria and neighbouring Zambia while more are under preparation.
However, Cheng said most of the SEZs in Africa are underutilised which calls for the need for African governments to quicken their use.
In Malawi, a few firms are producing at the Export Processing Zones (EPZ), some of which are also exporting through the African Growth Opportunity Act (Agoa).
In a recent interview, Minister of Finance, Economic Planning and Development Goodall Gondwe said there is need for thorough analysis before Malawi introduces the zones as what might have worked elsewhere might not work for Malawi.
In China, SEZs were first developed in 1980 with an aim to make China the hub of regional trade.