African manufacturers and industrial policy stakeholders are calling for an urgent redesign of the continent’s special economic zones (SEZs) architecture, warning that the current model, built on tax incentives, enclave infrastructure, and export orientation, can no longer deliver the industrial transformation Africa requires.

President of the Pan-African Manufacturers Association (PAMA), Mansur Ahmed, noted that with over 200 SEZs operational across 47 of the continent’s 54 countries, the model has reached its structural limits and called for urgent reforms.

He noted that Africa’s SEZs were designed as responses to structural economic weaknesses, offering islands of regulatory predictability, concentrated infrastructure and fiscal incentives within economies constrained by unreliable power, congested ports and regulatory opacity. He said the approach delivered visible results then.

He noted that Nigeria, Morocco, Egypt, Ethiopia and Kenya used zones as instruments of industrial ambition, attracting foreign direct investment and stimulating export growth.

However, Ahmed said, regional distribution remains uneven with North Africa accounting for approximately 29 per cent of continental SEZs, East Africa (26 per cent), West Africa (24 per cent), Southern Africa (15 per cent) and Central Africa (six per cent).

According to him, Nigeria and Morocco host the highest number of operational zones with governance structures that are predominantly hybrid. Approximately 53 per cent operate under public–private partnerships, 38 per cent remain publicly managed, he said. Only nine per cent, he said, are fully private.

He listed five persistent design flaws that threaten the long-term credibility of the SEZ model, including domestic market leakage, shallow industrialisation, fiscal exposure without capability gain, inconsistent enforcement, fragmented management, limited inter-agency coordination and limited regional integration.

He added that the case for structural reform is reinforced by rapid shifts in the global economic environment.

“Carbon border adjustment mechanisms threaten export competitiveness for African manufacturers. Digitalisation demands real-time customs integration and regional value chains under AfCFTA require rules-of-origin sophistication and cross-border coordination that existing enclave models are ill-equipped to provide.

“The political economy of SEZs is also shifting. As domestic manufacturers outside the zones increasingly question competitive fairness, governments face mounting pressure to reconcile incentive regimes with the principles of national industrial equity,” he said.

He outlined a six-point reform agenda that would shift Africa’s zones from exceptionality to integration, from temporary policy exceptions to enduring instruments of industrial strategy.

“Second-generation zones must close the domestic leakage gap. Secondly, general-purpose zones dilute competitive advantage and a reformed model should establish sector-specific and corridor-based zones, including agro-industrial processing belts tied to agricultural clusters, pharmaceutical and medical manufacturing hubs, automotive component ecosystems and green manufacturing and renewable technology parks. Third, a new category, Industrial Capability Zones, would integrate technical universities, vocational institutes, R&D centres, technology incubation hubs, and export manufacturing clusters within a single ecosystem.

“Second-generation zones must align production structures with AfCFTA rules of origin, facilitate trade in intermediate goods across borders, integrate regional logistics corridors, and support distributed manufacturing ecosystems.”

Also, instead of blanket tax holidays, incentives should be conditional and performance-linked: tied to domestic value-addition thresholds, technology transfer benchmarks, employment intensity targets, verified export diversification and structured SME integration ratios and finally, SEZs must institutionalise supplier ecosystem platforms, including certified local supplier registries, anchor firm–SME matchmaking programmes, zone-linked financing facilities, and technology upgrading grants for domestic firms,” he said.

He said if well designed and effectively implemented, a reformed SEZ framework would increase domestic value retention, correct competitive distortions between zone and non-zone manufacturers, deepen regional supply chains, reinforce fiscal discipline, build technological capability, and align industrial competitiveness with economic equity.

“Most importantly, it would reposition African SEZs from transitional policy instruments to permanent drivers of structural industrialisation, fit for the demands of the AfCFTA era,” he said.