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EPZs domestic sales hit Sh12bn on Covid waiver

Yatani

National Treasury Cabinet Secretary Ukur Yatani during a past interview at his office. FILE PHOTO | NMG

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Summary

  • Treasury Cabinet Secretary Ukur Yatani last year allowed firms in the preferential zones to sell all their products in the local market in a bid to cushion the industry from losses inflicted by coronavirus.
  • The EPZ firms are traditionally only allowed to sell only 20 percent of the annual production in the local market.

Local sales of goods manufactured in the Export Processing Zones (EPZ) hit Sh11.99billion last year after the Treasury temporarily waived restrictions that compelled firms to sell only 20 percent of the annual production in the local market, the Economic Survey 2021 shows.

The value of domestic sales contracted from Sh8.6 billion in 2019 to Sh6.7 billion in 2020, while imports decreased to Sh36.8 billion during the same period.

Treasury Cabinet Secretary Ukur Yatani last year allowed firms in the preferential zones to sell all their products in the local market in a bid to cushion the industry from losses inflicted by coronavirus.

The EPZ firms are traditionally only allowed to sell only 20 percent of the annual production in the local market.

Major export markets for EPZ-made products, including the US and large parts of Europe, last year shut down airports and sealed off their borders in efforts to curb the spread of the virus, effectively cutting off EPZs' exports.

The EPZ companies raked in Sh80.5 billion in sales last year, which was a 4.3 percent growth compared to Sh77.18 billion realised in 2019.

Data in the newly released Economic Survey 2021 shows that exports, which formed the bulk of trading, rose by 7.6 percent to Sh73.8 billion in 2020 from Sh68.57 billion the previous year, mainly boosted by tea blending and packaging, food processing, and pharmaceutical products.

The value of domestic sales contracted from Sh8.6 bilion in 2019 to Sh6.7 billion in 2020, while imports decreased to Sh36.8 billion during the same period.

EPZ firms also attracted new investments in the period under review, with capital injection rising to Sh114.72 billion in 2020, up from Sh107.87billion the previous year.

EPZ firms, however, hired fewer workers, with the number of jobs dropping 7.7 percent to 55,736 employees in 2020, a drop from 60,390 the previous year.

“The apparel and garment enterprises cater for the bulk of employment in the EPZ programme” the Economic Survey said.