State moves a step closer to revolutionising EPZs

by Luke Anami

The Government has unveiled a policy that will provide for the establishment and management of Special Economic Zones (SEZs).

In a speech read on his behalf by Trade Assistant Minister, Omingo Magara, the Minister of Trade, Amos Kimunya, said Special Economic Zones would help the country rapidly integrate into the global supply chain.

"Transforming the Export Processing Zones (EPZ) into Special Economic Zones provides regulatory and policy flexibility for a variety of different activities to be undertaken, with specific incentives for each type depending on sector priority and expected economic benefit," Kimunya said.

"The establishment of the SEZs will further help address weaknesses in the business environment, including infrastructure, cumbersome domestic licensing conditions, and high operating costs prevailing in the country."

It will also widen the scope of business activities to cover the micro, small and medium enterprises, currently left out in the EPZA Act.

"The institutional framework proposed in the policy requires the establishment of Special Economic Zones Authority (SEZA) responsible for the promotion, facilitation, regulation and management of SEZs," Export Processing Zones Authority (EPZA) acting Chief Executive Joseph Kosure, said after presenting the draft policy to stakeholders, during a validation workshop held at KICC.

"The Government will finance the development of infrastructure in the SEZs ." The eligible activities under the programme will include commercial activities.

Cabinet approval

Kosure said both the institutional, and the legal, framework to establish the SEZs is now in place, awaiting cabinet approval and subsequent deliberations in parliament early next year.

The envisaged benefits of the implementation of the SEZs include the expansion of export market and diversification of export goods and services among other benefits.

"SEZs will be established in phases in selected areas around the country," he said. "SEZs are expected to propel Kenya into high levels of competitiveness and productivity by focusing on activities and service industries that rely on high-end technology and skills."

It is expected that the SEZs framework will allow for business incubation and the promotion of greater local participation in zone investment among other benefits.

SEZs will boost development of new enterprises through increased investments in productive assets.

Parliament is expected to enact the law by mid next year, when the proposed SEZs are expected to be operationalised.

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