NAIROBI, Kenya – In a concerted effort to stimulate economic growth and create jobs, the government is making significant strides in enhancing the environment for Export Processing Zones (EPZs).
Recent trends indicate a surge in investor interest, driven by the government’s proactive measures and policies.
Investments, Trade, and Industry Cabinet Secretary Rebecca Miano revealed that at least 17 new enterprises have joined the Export Processing Zones Authority (EPZA) program in the past six months.
This surge is seen as a crucial step in the government’s strategy to leverage EPZs for job creation and export growth, aiming to improve the country’s balance of trade.
EPZA, a State Corporation dedicated to promoting and facilitating export-oriented investments, has witnessed the gazettement of four new private zones during this period.
These zones have attracted a total investment capital of Sh13.8 billion, created 3,143 local jobs, and generated exports worth Sh58 billion.
“With this trajectory, we can be certain that my ministry’s target of attracting investments worth $10 billion (Sh1.3 trillion) in the next five years and achieving a 15 percent growth in manufacturing by 2025 and 30 percent by 2030 is within reach,” said CS Miano.
To bolster employment, the government is focusing on investments in Special Economic Zones (SEZs), County Aggregation and Industrial Parks, diversification of export markets, and enhancing market access for goods and services from Micro, Small, and Medium Enterprises (MSMEs).
The National Treasury, in its 2024-25 budget, has proposed an allocation of Sh23.7 billion to support local industries and enable programs across various ministries and departments.
This includes Sh4.5 billion for the establishment of County Integrated Agro-Industrial Parks, Sh1.9 billion for access to finance and enterprise recovery projects, and Sh1.1 billion for constructing investor sheds in Athi River.
Moreover, Sh1.9 billion is earmarked for establishing six flagship EPZ hubs, Sh440 million for developing an SEZ Textile Park in Naivasha, and Sh1 billion for the Kenya Jobs Economic Transformation (KJET) initiative.
The government is also keen on ensuring market access for Kenyan goods in international markets, notably the US through the African Growth and Opportunity Act (AGOA), which is set for extension beyond 2025.
“We are optimistic, especially now that the US Congress has given the green light on the possibility of extending the framework by 16 years. This assures our EPZ firms of continued quota-free, duty-free market access to the US,” noted Miano.
Kenya’s exports to the US predominantly include textiles and apparel, macadamia, coffee, titanium ores, concentrates, and black tea.
To further enhance market access, Kenya is pursuing a Strategic Trade and Investment Partnership (STIP) with the US, aiming to capture at least five percent of the US market, potentially earning over Sh2 trillion in export revenues annually.
The government is also addressing the trade imbalance, where Kenya remains a net importer.
In 2023, Kenya’s total merchandise trade amounted to Sh3.6 trillion, marking a 7.6 percent increase from the previous year, according to the Economic Survey 2024 by the Kenya National Bureau of Statistics (KNBS).
Export earnings grew by 15.4 percent to Sh1 trillion, resulting in a slight narrowing of the trade deficit from Sh1.617 trillion to Sh1.604 trillion.
China, UAE, India, and Saudi Arabia accounted for half of Kenya’s imports last year, driven by high international prices of key commodities and the depreciation of the Kenyan Shilling against major trading partners’ currencies.
