KISUMU, MOMBASA, LAMU To become Free Trade Zones

The State is fast tracking the establishment of three Economic Zones (SEZ’s) in Kisumu, Mombasa , Lamu. The manufacturing facilities to be set up within these zones, including textile factories, are expected to create a million jobs yearly. Parliament is to be set up within these zones by the end of this month. In addition to providing land, tax holidays, duty free imports and waivers on value-added tax to potential clients, the  government is hoping that the zones will create 10 million jobs over the next 30 years. About 2000 sq km of land has already been set aside in Mombasa, Lamu and Kisumu for the project.

SEZs will have new levels of taxation and fewer regulatory hurdles and will focus primarily on industrial activity , in particular textile production. Industrialization and Enterprise Development Cabinet Secretary Adan Mohammed said early this year that the new economic zones will mainly target foreign textile firms from textile industries in Myanmar, China, Vietnam and South Africa Government Estimates the zones to be ready for investors in two to three years. 

Kenya has a single free trade zone in Mombasa, aimed at boosting the manufacturer sector this is in addition to established Export Processing Zones (EPZ’s), which contribute $543 Million (Sh 46.1 Billion) to the economy last year. EPZ Authority Chief Executive Cyrill  Nabutola said the zones account for 10 Per Cent of Kenya’s exports – the bulk of which are textiles and are apparel sent to the U.S  As of 2012, garment manufacturers accounted for 29 per Cent of EPZ Companies, 56% of EPZ Exports and 30% of EPZ private investments. 

The SEZs are expected to boost the country’s industrial output that has been experiencing steady growth in recent years. According to the Economic Survey 2013, the sector grew by 4.6% in the third quarter of last year, compared to 2.6% in the same quarter of 2012. Growth in the first second quarters in 2013 was 4.2 % and 4.3 % compared to 2.1% and 1.4% respectively in the previous years. World bank Estimates that value – added manufacturing focusing on food textiles machinery and chemical processing grew by 5% in 2013 compared to 3.3% in 2012.

Vision 2030 plans to transform Kenya into a middle –income State with manufacturing accounting for 20% of the GDP by 2030.