The Government of Kenya is fast-tracking setting up of three special economic zones (SEZs), which would also house apparel factories, Standard Digital reported. About 2,000 sq km are has already been set aside for the three SEZs being established in Kisumu, Mombasa and Lamu, which are expected to create 10 million jobs over the next 30 years. Meanwhile, Kenyan Parliament is also likely to pass a law on establishing SEZs by this month-end. The Government will provide land, tax holidays, duty-free imports and waivers on value-added tax for enterprises setting up their manufacturing activity in the SEZs.
The SEZs will focus primarily on industrial activity, particularly textile and clothing production. Enterprises operating in the SEZs will have to pay tax at a lower rate and face fewer regulatory hurdles compared to manufacturing businesses operating outside the SEZs, the report said. The new SEZs, which would be ready in two to three years, would mainly aim at attracting foreign textile firms, especially textile and garment industries from China, Vietnam and South Africa, according to Adan Mohamed, Cabinet Secretary for Industrialization and Enterprise Development. At present, Kenya has one free trade zone in Mombasa and some export processing zones (EPZs), but no SEZ. In 2012, nearly 30 percent of all companies operating from EPZs were garment manufacturing factories, which accounted for 56 percent of EPZ exports and 30 percent of private investments in EPZ. The apparel sector in Kenya grew by over 4 percent year-on-year in the first three quarters of 2013, according to the Economic Survey 2013. The SEZs are expected to give a push to the manufacturing sector in Kenya, which is aiming to become a middle-income country with manufacturing accounting for 20 percent of the GDP by 2030.
