Africa’s Freeports Should Boost Trade and Foreign Exchange Earnings – but Evidence Is Thin

Freeports, or free trade zones, offer simplified customs procedures and duty-free storage or processing of imports to boost industrialization and trade. Successful examples in Malaysia and Singapore highlight their potential, with West Africa hosting 29 free zones in 11 countries. Benefits include increased foreign exchange, job creation, and foreign direct investment. However, freeports can also facilitate illicit activities such as money laundering and tax evasion, prompting regulatory crackdowns in regions like the EU. While countries like Ghana and Nigeria show promise, the overall performance of West African freezones faces data and implementation challenges. Effective freeports can significantly impact national economies by enhancing exports and technology transfer.