Ruto should push SEZ to spur fast industrial growth


President William Ruto during the Commissioning of Naivasha Special Economic Zone sub -station in Naivasha, Nakuru county on January 13,2024. [Kipsang Joseph, Standard]

China’s development story over the last 45 years began with Special Economic Zones (SEZ) and industrial clusters on its southeastern coast.

Shenzhen, was the epicentre of this revolution, and grew from a small town of 30,000 to a city of over 17 million in just 40 years. What was China’s secret?

Two broad answers come to mind. First, Chinese policymakers were ambitious. They did not set up the SEZ just because it is what one does to signal that they are serious about development (policy mimicry) or to serve narrow parochial interests (policy capture).

The policymakers within the ruling party were genuinely interested in economic transformation away from top-down communism to a more controlled market-oriented form of economic organisation. They wanted to become rich.

Second, they were open to learning and took a long-term view. This is why even as they maintained political control over the whole enterprise, they created enough room for innovation, learning, and creativity in a diverse array of sectors (not to mention providing government support to specific firms and sectors).

Finally, they leaned on firms in the SEZs to be export-oriented and to create jobs. I bring up China’s experience with SEZs as a reminder of the potential of our own special economic zones.

The SEZ Authority notes that we have three public and nine private SEZs. It is a shame that our SEZ story has yet to play a bigger role in our policymaking agenda.

President William Ruto and his economic team should view this as a challenge. Kenya has myriad problems, and it is hard to solve all of them at once from Nairobi.

However, we can begin to solve many of our problems if we can economically empower our people. Why not lean into SEZs as the engine of that process?

Why not go all in to create tens of thousands of jobs and promote ever faster urbanisation through these points of economic agglomeration?

An abiding challenge, of course, is that many of our SEZs remain shackled to either policy capture and lack of ambition. The problem is not just corruption (which tends to overrated as a cause of our poverty and underdevelopment), but a generalised fear of transformational economic change and the work it demands.

If we are to succeed, President Ruto must push both the government and the private sector to aim higher.

The writer is an Associate Professor at Georgetown University