NAIROBI, Kenya – Investors in undeveloped Special Economic Zones (SEZs) are appealing for more time to implement their projects amid government threats to revoke at least 20 licenses.
This comes as concerns grow over the speculative acquisition of SEZs, with some investors failing to meet development expectations.
Investment Principal Secretary Abubakar Hassan revealed that while 38 SEZs have been gazetted, only 10 privately owned zones are currently operational, out of 30 private licenses issued.
The SEZ Authority is now conducting an audit to identify dormant zones that could be degazetted.
“If you are not developing the gazetted land, there is no use. We will soon conduct an audit and degazette the zones that are inactive. You must have a plan in place,” Hassan stated at the launch of the Association of Special Economic Zones (ASEZ) in Nairobi yesterday.
ASEZ, the newly formed lobby group for SEZ players, has urged the government to reconsider the degazettement plans.
According to ASEZ Chairman David Langat, delays in infrastructure development—such as roads, electricity, and water—have hampered progress at many of the sites.
“You cannot generalize and say we are going to degazette these zones, yet the problem lies on the government’s side,” Langat said, noting that inadequate infrastructure discourages investment.
He called for an extension of at least two years to allow for the necessary developments before the licenses are revoked.
The government has been under pressure to develop the SEZ sector, which contributes about 3.5% of Kenya’s GDP.
With ambitions to raise that to 10-15% by 2030, it has introduced tax incentives and streamlined regulatory processes to attract investors.
These incentives include a 10-year tax holiday, reduced corporation tax, and exemptions from customs and VAT duties.
Abubakar emphasized that the government is committed to supporting SEZ investors by offering a one-stop-shop for licensing and approvals, while also investing in infrastructure to facilitate industrial growth.
He noted that SEZs such as Dongo Kundu in Mombasa and the Kenani Leather Park in Athi River are among key zones poised for significant development.
This comes as concerns grow over the speculative acquisition of SEZs, with some investors failing to meet development expectations.
Investment Principal Secretary Abubakar Hassan revealed that while 38 SEZs have been gazetted, only 10 privately owned zones are currently operational, out of 30 private licenses issued.
The SEZ Authority is now conducting an audit to identify dormant zones that could be degazetted.
“If you are not developing the gazetted land, there is no use. We will soon conduct an audit and degazette the zones that are inactive. You must have a plan in place,” Hassan stated at the launch of the Association of Special Economic Zones (ASEZ) in Nairobi yesterday.
ASEZ, the newly formed lobby group for SEZ players, has urged the government to reconsider the degazettement plans.
According to ASEZ Chairman David Langat, delays in infrastructure development—such as roads, electricity, and water—have hampered progress at many of the sites.
“You cannot generalize and say we are going to degazette these zones, yet the problem lies on the government’s side,” Langat said, noting that inadequate infrastructure discourages investment.
He called for an extension of at least two years to allow for the necessary developments before the licenses are revoked.
The government has been under pressure to develop the SEZ sector, which contributes about 3.5% of Kenya’s GDP.
With ambitions to raise that to 10-15% by 2030, it has introduced tax incentives and streamlined regulatory processes to attract investors.
These incentives include a 10-year tax holiday, reduced corporation tax, and exemptions from customs and VAT duties.
Abubakar emphasized that the government is committed to supporting SEZ investors by offering a one-stop-shop for licensing and approvals, while also investing in infrastructure to facilitate industrial growth.
He noted that SEZs such as Dongo Kundu in Mombasa and the Kenani Leather Park in Athi River are among key zones poised for significant development.
