Special Economic Zones (SEZs) have traditionally been seen as tools for export growth and job creation. However, to make meaningful progress toward SDG 1, African countries must expect SEZs to deliver more than employment numbers.
Jobs alone do not reduce poverty if they do not offer fair wages, skills development, and real opportunities for advancement. For SEZs to contribute effectively to poverty reduction, they must create quality jobs that improve household welfare and support wider community development.
This shift requires governments to redesign and evaluate SEZs based on development outcomes rather than job counts or tax incentives. Incentives must be tied to verified results such as skills training, local hiring and career progression. Training centres, apprenticeships, and strong linkages between SEZ firms and local SMEs should be part of every zone. Labour protections and transparent reporting systems are essential to safeguard workers’ rights and income security.
When SEZs are guided by these principles, they evolve from isolated industrial enclaves into real anti-poverty platforms with long-term community impact.
Evidence from Africa
Examples across the continent cites both the potential and limitations of SEZs. In Ghana, SEZs employ more than 40,000 workers directly, along with thousands indirectly. While this shows their ability to absorb labour, many of the jobs remain low-skilled with limited opportunities for advancement. Weak local sourcing further reduces community-level benefits. As a result, the impact on poverty reduction remains modest.
Studies by UNCTAD and the World Bank show similar patterns across Africa. SEZs can generate significant employment, but their developmental benefits depend on deliberate policies that strengthen worker skills, improve job quality and deepen linkages with local suppliers. The emerging SDG Model Zone framework reflects this approach by measuring development outcomes rather than job numbers alone.
Research by the French Development Agency in 2025 provides additional evidence. Morocco’s Tanger Med has grown into a competitive automotive hub with strong supplier networks. Ethiopia’s industrial parks have created significant employment since the mid-2010s. Using data from 10 African countries, researchers found that households living within 10 kilometres of SEZs experienced improved wealth, housing quality, electricity access and sanitation. Women, in particular, recorded gains as many transitioned from subsistence agriculture into wage employment.
South Africa’s Coega SEZ further demonstrates the benefits of diversified industrial ecosystems. With more than 50 active investors across key sectors including automotive, agro-processing and renewable energy, Coega has created more than 130,000 jobs. Similar results have been recorded in Egypt, Ethiopia and Morocco.
Despite these successes, many SEZs still struggle due to capital-intensive investment models, limited local procurement, inconsistent job quality and gender gaps in hiring. To unlock their full potential, SEZs must prioritise inclusion, skills development and broad-based economic transformation.
Four Policy Levers That Strengthen the Poverty Reduction Impact of SEZs
1. Link Incentives to Employment Quality and Worker Progression
Job creation should not be the only criterion. Incentives should depend on outcomes such as local hiring, verified training hours, wage floors and internal promotion. This rewards firms that invest in workers.
2. Build SEZ-Based Skills Pipelines and Apprenticeship Systems
Training centres and apprenticeships developed jointly by SEZ investors and local technical institutions help convert short-term jobs into long-term careers. Ghana’s experience in Tema shows how such pipelines increase access to higher-skilled roles.
3. Strengthen SME Linkages Through Supplier Development
Local procurement multiplies the positive impact of SEZs. Governments can use targets, grants and supplier development programmes to build strong business linkages. This creates secondary employment and supports local enterprise growth.
4. Guarantee Strong Labour and Social Protections
Safe workplaces, fair contracts, maternity protection, social insurance and grievance systems ensure that workers have stable incomes and long-term security. Regular audits and public performance scorecards increase accountability.
Practical Measures That Countries Can Introduce
• Release tax incentives only after firms meet training and local procurement targets
• Establish an industry-based training institute in Tema to guarantee apprenticeships
• Create a supplier development fund for local firms
• Require independent labour audits as part of SEZ licensing and publish annual summaries
Measuring What Matters: Indicators That Connect SEZs to SDG 1
Governments should track median wages, the share of workers hired from nearby communities, training-to-job placement rates, local procurement levels, internal promotions and increases in household income among SEZ workers. Transparent reporting helps refine policies and builds public confidence.
SEZs can play a central role in advancing SDG 1, but only if they shift from basic job creation toward building sustainable livelihoods. This requires realigning incentives, prioritising skills, strengthening SME linkages and protecting workers. When SEZ jobs become pathways to higher income and broader community benefits, SEZs become powerful tools for lifting households out of poverty.
By measuring SEZ performance against SDG 1, African countries can transform zones into inclusive development platforms capable of reducing poverty at scale.
