Sustainable Special Economic Zones (SSEZs) are designed to scale up low carbon, circular economy solutions to problems of industrial development in high risk environments. SSEZs represent the next horizon in industrial development; moving beyond “do no harm” principles of export processing zones and low-carbon zones, to driving positive commercial, social and environmental impact.
After 30 years of increasing inequality and environmental degradation, a ‘New Growth Paradigm’ is needed. Special Economic Zones (SEZs) have been identified as an inclusive growth model to enhance economic development and deliver on The UN Sustainable Development Goals. A SEZ is an area carved out by government, subject to different regulations to the rest of its national territory, offering incentives to create a favourable business environment and induce industrial investment.
The aims of a zone include increased trade balance, employment, increased investment, job creation and effective administration. However, SEZs have not had uniform success as in many cases they have:
failed to attract investment;
are socially and/or environmentally damaging;
have failed to catalyse growth beyond their enclaves.
A new growth paradigm is needed, and SYSTEMQ believe Sustainable Special Economic Zones (SSEZs) can be the catalysts of that. SSEZs actively drive attainment of the SDGs by mandating sustainable operating principles, supporting inclusive businesses and developing impact orientated synergie. This represent the next horizon in industrial development; moving beyond “do no harm” principles of export processing zones and low-carbon zones, to driving positive commercial, social and environmental impact. In practice this means three things:
Mandating sustainable operating principles
Circular principles are applied to core facilities and design of base
SDG policies are mandated for all companies on site to ensure social and environmental protection
Supporting inclusive businesses
Sectors are targeted that enhance social and environmental outcomes
Companies are supported to develop sustainable and inclusive supply chains
Developing impact orientated synergies
Assets and auxiliary businesses are developed to encourage inclusive businesses, support social mobility and facilitate resource optimisation
What IS SYSTEMIQ doing?
SYSTEMIQ is working with the owners of the privately owned LADOL Free Zone in Lagos to develop the world’s first SSEZ. This zone will act as a blueprint for sustainable industrialisation, and a proof point of the SSEZ concept. The Zone is committed to hosting innovative local and international tenant businesses within a fully circular industrial system to drive commercial success and realise the SDGs in Nigeria. Through a combination of sector synergies and renewable energy, the planned power costs of the zone have been reduced by 90% - (Figure A).Through our partnerships with P4G, this approach is now being scaled up to both Kenya and Ethiopia where the first generation of sustainable industrial development in East Africa is about to take off.
How are we doing it?
SDG sector identification – We identify sectors with outsized SDG impact. We take a systemic approach linking sector impact into regional context and local assets, deploying expertise for example, in land use master planning and social impact mapping.
SDG policies & operating procedures – We support the design of policies and procedures to enhance the SDGs. These go beyond baseline environmental management, and include social components such as upskilling, professional development and gender empowerment.
Tenant acquisition – We develop innovative and aligned tenants, bringing in international best practice and local champions. We focus on value enhancement in order to cultivate an environment conducive for technology transfer and local content development.
Funding – We create a platform comprising trusted assets reducing perceived and actual capital risk. Building on the blended finance models we support funding mechanisms that can bring down funding costs.
Smart Design – We curate tenant selection to maximise industrial symbiosis to improve operating conditions and reduce costs. Applying circular design principles, we work with technical partners to support master planning, digitisation and waste utilisation.
Coalition building – We build networks of support to ensure long term viability. Working with global and local stakeholders we align policy, cluster development and communities