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You would not think it judging by the attention they receive, but special economic zones (SEZs) fail more often than they succeed. This is all the more true when SEZ policy regimes are evaluated in terms of how much additional value they create. When viewed in this light many SEZ regimes worldwide are expensive failures.

After sinking about R6bn into it, the Nigerian government’s Calabar Free-Trade Zone is a huge white elephant. India was one of the first countries to experiment with SEZs in the 1960s but the programme, which consists of hundreds of zones, has so far resulted in customs revenue losses of at least R700bn, with debatable developmental benefits. When considering whether this programme has been worthwhile, all the alternative ways in which this enormous amount could have been spent to stimulate development should be considered...

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