State under pressure to transform troubled Export Processing Zones

By Benson Kathuri

After working in five different textile factories at the Athi River-based export-processing zone for over a decade, Ms Anjelica Njeri is now jobless and penniless.

During that period, Njeri’s salary never exceeded Sh6, 000 a month, a situation that made it impossible to save enough money to venture into business.

"Even if I had saved the money, I cannot start a business in textile because we were never trained sufficiently," the single-mother of one told the FJ in an interview.

However, thousands of young people and especially women still flock every morning to work in the largest economic zone run by the Export Processing Zones Authority (EPZA) despite the low wages and other challenges.

Low salaries

The Government has been under pressure, locally and internationally to address the challenges of low salaries, excessive and unpredictable working hours, lack of training and promotion, and unstable contracts. Cases of sexual harassment, the right to join trade union and to collective bargaining, and racial discrimination by some foreign managers against local workers have also been reported.

Some of these issues were, in November last year, discussed by the United Nations Committee on Economic, Social and Cultural Rights in Geneva and recommendations made for the Government to implement.

"The State must review its incentive regime for EPZs, remove exemptions from local labour legislation, strictly enforce labour standards and further, increase the number of inspectors," said the committee. Besides, the State must promote training and opportunities for workers, ensure trade union freedom, and combat sexual harassment and racial discrimination in the zones."

Since its establishment in 1990, the EPZs programme has not achieved the desired results and economists now question its viability.

World Bank-imposed

Experts say the programme was imposed by the World Bank (WB) to most African countries, which could have led to the dismal performance despite huge export opportunities provided by the US Government.

"Our realization that the EPZ regime established under the Act of Parliament Cap 517 of 1990 has outlived its usefulness led us to explore other possibilities," said Mathenge Wanderi, chairman of the Export Processing Zones Authority (EPZA).

"With Special Economic Zones (SEZs), we can accommodate a wider range of industrial, agricultural, commercial and services oriented enterprises."

There were 38 gazetted zones with 75 operational enterprises employing 30,183 workers by last month. The investment stood at Sh20 billion while exports were estimated at Sh28 billion.

Despite the limited success, the World Bank is now pushing African countries to implement the special economic zones concept successful in South East Asia.

Cabinet approval

Early last month, the Bank together with a group of donor agencies took government officials from 12 African countries on a tour to China, Singapore and Malaysia, which have been successful with the SEZs.

Though Kenya was not represented, the cabinet has already approved a move to transform the EPZs into SEZs within the next three years.

"The transformation of EPZs to SEZs is timely and necessary in view of changes in the dynamic local and global economic environment," says Amos Kimunya, Trade Minister.

But, sources say there are fears within the World Bank that the same problems facing EPZs will affect the proposed special zones.

According to Kimunya, several flagship projects under the SEZs programme to be implemented under the Vision 2030 first medium-term plan will include a multimedia technological park in Athi River, free ports in Mombasa and Lamu as well as three resort cities in Isiolo, Diani and Kilifi.