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Why Mai Mahiu is the next big thing in investment and trade

By Steve Mkawale and Antony Gitonga | August 26th 2019
A section of the 120km extension of the SGR from Nairobi to Naivasha that passes through a fault line in Mai Mahiu. With several dry ports coming up and an economic zone set up, the fortunes of this dry and dusty town are about to change. [File, Standard]

For decades now Mai Mahiu, a sprawling trading centre located between scenic hills of Naivasha has failed to attract large scale investments.

Although the town is a less than two-hours drive from Nairobi, many investors have been avoiding it, arguing that it is not economically viable.

It’s dry weather and reports of cracks appearing on roads leading to it have not helped matters.

This perception has stagnated the town’s economy which is currently dominated by sand harvesters, small businesses and livestock trade.

But the town’s fortunes are about to change, thanks to the government’s plan to set up a dry port and an industrial park on some 1,000 acres.

In a gazette notice dated August 16, the Government declared the land at Satellite off Mai Mahiu-Narok road a Special Economic Zone.

Part of the land will be hived off from Kedong Ranch while some families living at Satellite village will be relocated.

Master plan

According to the chief economist, State Department for Industrialization, Anthony Mugane, the master plan for the zone is at an advanced stage.

Plans to build the industrial park began in earnest last year when Parliament allocated Sh3.4 billion to buy land. They were however stalled by failure to secure land for the project.

Local and foreign investors are already angling for rapidly unfolding investment opportunities created by the industrial park and dry port at Mai Mahiu.

Already, the Government has offered some land to Uganda, Rwanda, South Sudan, Burundi and the Democratic Republic of Congo to set up dry ports to handle their cargo about 10 kilometres from Mai Mahiu town.

With the development of the Standard Gauge Railway (SGR) project, which has already reached the town, cargo meant for East African countries will be easily transported to the dry ports.

The SGR cuts across the economic zone and is expected to start operations by December.

In addition, the Government has released Sh700 million to connect the zone with water.

Water ministry Principal Secretary Joseph Irungu says five boreholes will be sank at the site to ensure uninterrupted supply.

“Out of the Sh700 million, Sh50 million will be to drill and equip the boreholes. The drilling will begin soon,” Mr Irungi told The Standard.

The Kenya Association of Manufacturers (KAM) lauded the establishment of the industrial park and dry port.

According to KAM, the plan was timely, coming at a time the association has launched its manufacturing agenda that highlights priority areas that, if addressed, would drive the sector’s contribution to the economy to 15 per cent by 2020.

The association’s Nakuru Chapter chairman, Jayen Dodhia,  said a survey on the gross county product by the Kenya National Bureau of Statistics showed that Nakuru is the second biggest economy after Nairobi.

The survey indicates that Nakuru is ahead of Mombasa and Kisumu counties.

“The county’s 6.1 per cent contribution to the economy, which is second to Nairobi’s 21.7 per cent will rise further based on ongoing and planned industrial developments  and create more wealth and employment opportunities,” said Mr Dodhia.

The investor said the region is currently experiencing an influx of mega industries with multinationals investing billions of shillings to set up manufacturing plants and called for more conducive business environment. 

“The manufacturing sector is critical for economic growth of the country, however, the sector’s growth in the county faces multiple fees, charges and levies, water shortages, poor road network and traffic congestion,” he said.

The Kenya National Chambers of Commerce and Industry Naivasha branch chairman, Stephen Thuo described the establishment of the economic zone at Mai Mahiu as a bold step.

“We fully support this project. It will not only lead to job creation but also see revenue collected by the county rise,” he said.

Thuo said the youth from the area should be given the first priority in any opportunities created by the new developments including tenders to supply construction materials for the upcoming dry port.

The planned developments have attracted hordes of speculators which has seen the price of land rising from Sh200,000 to more than Sh1m per acre.

Preferred destination

Governor Lee Kinyanjui said the establishment of the industrial park and dry port in Mai Mahiu will transform Nakuru into the largest, busiest and most preferred investment destination in the country.

He challenged  businessmen and local residents  to take advantage of the industrial park and dry port to establish services that focus on the entire country.

Local communities have welcomed the project but called on the government to ensure that families affected are compensated. They claimed that those previously displaced by the SGR project were yet to be paid.

They also want a piece of the cake.

“All that we are asking is that local youths be given the first opportunity in job opportunities,” said Joseph Ole Kishia, a community leader in the area.

Another elder, Mike Roka, called for humane treatment of families currently living at the identified economic zone before they move out and fairness in land allocation.

“We have already received 4,000 acres from the government for resetting affected families, but we hope there will be fairness in the process,” he said.

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