The Zimbabwean government plans to re-establish special economic zones to salvage the ailing manufacturing industry, state media reported Wednesday.
Zimbabwe has fallen into one of the continent's worst de- industrialization since the economy entered a decade-old recession in the late 1990s.
Despite a mild economic recovery since 2009, the country's manufacturing industry failed to attract meaningful investment over the past three years, according to the Confederation of Zimbabwe Industries.
The state newspaper The Herald said the government plans to declare Bulawayo a special economic zone to help the country's second largest city regain its status as Zimbabwe's industrial hub.
Other major cities like Beitbridge, Mutare, and Norton are likely to be declared special economic zones. Businesses in these zones are entitled to preferential policies that have not been disclosed yet.
Special economic zones existed in Zimbabwe. Originally set up in 1987, the zones operated as export processing zones. But the operations ceased after the inception of Zimbabwe Investment Authority which replaced the Export Processing Zones Authority -- the governing body of the special economic zones.
State media said the re-establishment of special economic zones comes at a critical time as there is urgent need to formulate measures to revive the economy.
Zimbabwe's economy shrank by about 50 percent from 1995 to 2008. While the economy finally picked up in 2009 sustained by a mining boom, the growth has slowed down to a forecast 3.4 percent this year.
After veteran President Robert Mugabe's party romped to election victory in July, the government has been pushing for implementation of a controversial policy that some critics say is detrimental to foreign investors' confidence.
A centerpiece of the ruling Zanu-PF party's policies, the indigenization policy requires foreign businesses valued over 50, 000 U.S. dollars to cede 51 percent of the share-holding of their Zimbabwean operations to black Zimbabweans. But the ruling party said the policy is necessary to empower the black Zimbabweans who were marginalized during the colonial years before the country's independence from Britain in 1980.