The KEPSA Industry and Trade sector board held a meeting with the Special Economic Zones Authority (SEZA) in their monthly sector board meeting. The focus of the meeting was to get a progress update on the work of SEZA as well as identify potential areas of synergy.
The sector board Vice Chair, Mr. Dave Govender, in his remarks recognized the positive improvement of Kenya to position 80 being the 3rd most improved country in Sub Saharan Africa in the World Bank Ease of Doing Business Report. He commended KEPSA for the good work.
Mr. Francis Gitau, SEZA noted that globally, SEZs have significantly increased from 25 to 119 countries currently translating to 79 SEZs in 1970 to 4300 in 2015, with employment increasing from one million to more than 160 million in the same period. Closer home, Kenya’s industrialization strategy includes increasing manufacturing base from 11% of GDP to 20% of GDP, increasing FDI as regional neighbors are attracting 2-3x more FDI and improving the ease of doing business in Kenya, infrastructure and electricity costs.
SEZs have thus been established in Kenya to help achieve this vision and both general and specific incentives are offered to promote investments including: Fiscal Incentives; Procedural/Administrative incentives; Infrastructure and customized facilities and Land. The key sectors targeted include:
- Agro Food and Beverage Processing
- Machinery and Equipment
- Electrical and Electronics
The key achievements so far as elucidated by Mr. Gitau are:
Institutional Framework- SEZA board which included private sector representatives is in place with an interim management staffing.
Legal & Policy framework
- Special Economic Zones Law was enacted in 2015 (SEZ Act, No. 16 of 2015)
- The 1st set of SEZ Regulations were Gazetted on 5th August 2016:
- Designation And Gazetting Of Special Economic Zones
- One-stop Shop operations and facilitation
- Rules For Special Economic Zones Use Rules And Building And Utility Controls
- Currently SEZA is developing an SEZ strategy to guide on the Size, scope and the investment thresholds.
- The Second set of SEZ Regulations is still being subjected to the SEZ stakeholders’ considerations. These are:
- Registration and Licensing of Special Economic Zones Enterprises and Residents;
- Entry Of Persons Into Special Economic Zones;
- Labour Rules;
- Tax and Customs Treatment;
- Customs Treatment;
- Applicable Foreign Exchange and Financial Services Rules.
- Dongo Kundu SEZ in Mombasa to include port handling, logistics and warehousing, Trade and Exhibition, process and manufacturing. Master Planning was undertaken and completed in August 2015 with the help of Japan International Cooperation Agency (JICA).
- A Feasibility study for Dongo Kundu SEZ was undertaken and completed with the support of a Chinese firm. This has been earmarked under the PPP Unit framework(SEZA looking for a private developer)
- Proposed SEZs along the SGR- Athi-River and Naivasha land have been identified.
Members appreciated the presentation and made proposals including SEZA having increased engagement with the private sector to ensure flow of information. A key concern that was raised is the disparity between local industries and those within the SEZs noting that they are highly incentivized and hence an uneven playing field. The meeting agreed to have a wider engagement to include more sectors and more time in order to delve into the issues.