Windhoek-Finance Minister Caller Schlettwein’s proposal in his budget speech at the beginning of March this to repeal the existing Export Processing Zone (EPZ) Act and to introduce Special Economic Zones, with a specific sunset clause for current operators with EPZ status, is expected to affect at least 18 enterprises operating on the current EPZ programme. The enterprises are operational mainly in the mineral processing, manufacturing and assembling sectors and constitute a total investment of about N$9 billion since inception of the EPZ programme.
According to the chief executive officer of the Offshore Development Company (ODC), Phillip Namundjebo, the enterprises operational in the EPZ programme export on average goods worth N$2.9 billion per quarter each year of which the direct economic productive jobs are just over 1,900 while indirect jobs are more than 3,900. ODC is the state-owned enterprise under the Ministry of Industrialisation, Trade and SME Development, that is directly responsible for the EPZ regime.
“EPZ enterprises’ contributions towards local procurement of goods and services amount to N$2.4 billion on average each year through the services by local contractors/suppliers, namely, utilities, logistics, professional fees such as auditors, legal matters, security services and maintenance providers to the building and equipment, and other related goods and services,” said Namundjebo.
He added that the government is at an advanced stage to implement the policy framework regarding the current operational EPZ enterprises as well as future investment incentives. “Government will communicate this matter after due processes and considerations are met,” said Namundjebo in response to queries from New Era.
When tabling the national budget on March 7, Schlettwein proposed the phasing out of preferential tax treatment only granted to some existing manufacturers to achieve equity and equal treatment of all operators.