Kenya targets more exports, jobs with major EPZ investments

The government is walking the talk on creating an enabling environment for Export Processing Zones (EPZs), latest trends indicate, as the country continues to attract investors in the sector.

This, as the government banks on the EPZs by the private sector to help create jobs for the youth and grow the country’s exports, in a bid to improve the balance of trade.

According to Investments, Trade and Industry Cabinet Secretary Rebecca Miano, at least 17 new enterprises have joined the Export Processing Zones Authority (EPZA) programme in the last six months.

EPZA is a State Corporation that promotes and facilitates export-oriented investments and developes an enabling environment for such investments.

Four new private zones have been gazette during the period, CS Miano notes, injecting a total investment capital valued at Sh13.8 billion.

The zones have also created at least 3,143 local jobs and generated exports worth Sh58 billion.

“With this trajectory, we can be certain that my ministry’s target of attracting investments worth $10 billion (Sh1.3 trillion) in the next five years and 15 per cent growth for manufacturing by 2025 and 30 per cent by the year 2030 is nigh,” Miano said.

To create employment, the government has given special focus to investment in Special Economic Zones and County Aggregation and Industrial Parks; diversification of export markets and market access of goods and services from Micro, Small and Medium Enterprises.

National Treasury has in the 2024-25 budget proposed an allocation of Sh23.7 billion to support promote local industries, and enabling programmes under Ministries, Departments and Agencies.

Treasury wants Sh4.5 billion to go towards supporting the establishment of County Integrated Agro-Industrial Parks; Sh1.9 billion for supporting access to finance and enterprise recovery project and Sh1.1 billion for construction of investors sheds in Athi River.

About Sh1.9 billion will go towards establishment of six flagship Export Processing Zones Hubs; Sh440.0 million for the Development of SEZ Textile Park in Naivasha and Sh1 billion for Kenya Jobs Economic Transformation (KJET).

CS Miano said the government is keen to ensure market access for Kenyan goods in the global markets, including the US through the African Growth and Opportunity Act (AGOA)which is set for extension past 2025.

“We are optimistic, especially now that the US Congress has given a green light on the possibility of extending the framework by 16 years. This is an assurance that our EPZ firms will continue enjoying the quota-free duty-free market access to the US market,” Miano said.

More than half of Kenyan exports to the US are comprised of textile and apparel, macadamia, coffee, titanium ores and concentrates, and black tea.

Kenya is also pursuing a Strategic Trade and Investment Partnership (STIP) with the US to enhance market access.

With a bilateral deal, Kenya is keen to tap at least five per cent of the US market, which has the potential to earn the country more than Sh2 trillion in export revenues annually.

The government is also keen to improve the existing trade imbalance between Kenya and the globe, where the country is a net importer.

In 2023, Kenya’s total merchandise trade amounted to Sh3.6 trillion, marking a 7.6 per cent growth from the previous year, the Economic Survey 2024 by the Kenya National Bureau of Statistics Shows, with China and the UAE being top import sources.

“The growth was partly driven by high international prices of principal import commodities, especially petroleum products, coupled with the depreciation of the Kenyan Shilling against currencies of key trading partners,” KNBS said.

During the review period, export earnings grew by 15.4 per cent to Sh1 trillion. The net effect was the narrowing of the trade balance from a deficit of Sh1.617 trillion to Sh1.604 trillion.

China, UAE, India and Saudi Arabia account for half of Kenya's imports last year.