There’s a silent evolution underway in Africa’s financial services sector, and it’s not coming from fancy boardrooms. It is emerging from something industrial sounding: Special Economic Zones (SEZs).
Long cast in the role of export-processing zones for factories and logistics parks, SEZs are now being reimagined as launchpads for financial innovation.
The premise? Combine relaxed regulation, modern infrastructure, and a concentration of talent, and see what happens when you drop a startup ecosystem in the middle of it.
So far, the results are promising. But can SEZs move beyond tax incentives and become true engines of Africa’s financial future? SEZs have not fully earned their reputation as hotbeds of innovation.
For decades, they’ve been viewed as real estate plays wrapped in policy language: roads, power, cheap land, and a few tax holidays.
However, a new generation of SEZs is being positioned to do more—specifically, to attract financial services and tech innovators hungry for a space to build, test, and scale.
TRIFIC (Two Rivers International Finance & Innovation Centre) in Kenya is a good example. It’s pulling in both big players like Britam, which moved operations of its corporate accelerator - BetaLab – there, to support startups reimaging financial services.
The zone’s flexible setup allows startups developing tools in areas such as embedded finance, climate risk, and even AI-led healthcare coverage to move faster, experiment more, and rethink financial products from the ground up.
Startups love SEZs for the same reason artists love garages — freedom from the rules that slow you down. Typical regulatory environment, launching a new insurtech product might take months of licensing, compliance reviews, and approval loops.
This agility is not just about speed. It’s about access. SEZs can lower capital and compliance costs just enough to allow new ideas, many of which would’ve died in committee elsewhere to get a shot at market validation.
The most successful SEZs are not just cutting red tape, they’re building dense ecosystems of entrepreneurs, researchers, product designers, data scientists, and yes, even regulators. That mix creates something traditional innovation hubs often lack: cross-sector collaboration with skin in the game.
SEZs are at their best when they stop behaving like gated tax havens and start acting like micro-cities of innovation. That means shared labs, coworking spaces, on-site accelerators, and a regulatory presence that is less “policing” and more “partnership.”
Financial inclusion is not a new headline but SEZs offer a fresh lens on how to accelerate it. Inside these zones, products targeting underserved populations, gig workers, informal traders, or are being prototyped and launched with fewer barriers and faster iteration cycles.
Think: pay-as-you-go health coverage, microinsurance built into digital wallets, or Artificial Intelligence (AI)-powered tools assessing risk for people who’ve never filled out a form. These models work better when the underlying infrastructure; cloud computing, APIs, even AI is native to the environment.
Here’s where the future gets interesting. As digital finance grows, data is becoming the most valuable asset in the room. SEZs offer companies a space to build serious data science capacity, with fewer bureaucratic hurdles and more room to experiment with AI and predictive analytics.
For financial services firms, this means going from reactive to proactive. The next wave of products anticipate need, assess risk in real-time, and personalize offerings dynamically.
Let us not pretend SEZs are a silver bullet. If not designed intentionally, they can become silos—cut off from the communities they claim to serve. There’s also the risk of regulatory arbitrage, where bad actors exploit relaxed oversight to test dubious models without accountability.
And then there’s the elephant in the room: Will innovations developed in SEZs actually scale outside them? What works in a zone with regulatory flexibility might stumble in the messy realities of national policy and fragmented markets.
The world does not need more innovation theatres. It needs models that work and SEZs offer a controlled but ambitious space to build them. They won’t replace national reform, but they might just spark it. For African economies looking to leapfrog legacy financial systems, that spark could make all the difference.
If SEZs can evolve from tax zones to idea factories, they could do more than catalyze a few fintech startups, they could redefine how financial innovation is done on the continent.
And that’s a bet worth making.
The writer is the Head of Group Tax, Britam Holdings Plc
