Industrial parks plan gets Sh413m World Bank boost

EPZ firm
Workers at an EPZ firm off Thika Road. FILE PHOTO | NMG 

Kenya's has received a major boost in its efforts to build special economic enclaves after the World Bank came on board to provide technical support.

The bank has approved a deal to offer advisory services in the development of a legal and regulatory framework special economic zones (SEZs) and proposed industrial parks.

The SEZs are expected to play a big role in attracting high net worth investors into the country to mainly set up export-oriented enterprises.

The project, whose budget is $4 million (Sh413 million) through December 2021, is being implemented by the International Finance Corporation (IFC) — the group’s arm that deals with investment and advisory services to encourage private sector development.

IFC says in disclosures on October 30 the Kenya Investment Generation Project will help streamline the legal, regulatory and administrative environment for SEZ development.


It also targets to boost the country’s industrial competitiveness by creating an environment for investment in quality and market demand driven industrial infrastructure and address bottlenecks hindering value addition and manufacturing, among other interventions.

“The project will support Government of Kenya in the development of Special Economic Zones and industrial parks to attract targeted investors and developers resulting in new investments,” the IFC says in the disclosure.

“This will ensure viability and economic usefulness of special economic zones and industrial parks in the context of Kenya’s public policy goals of increasing manufacturing share of GDP, boosting quality industrial infrastructure development and generating investments.”

The share of manufacturing sector to gross domestic product shrank to a decades-low of 7.7 percent in 2018 from 10 percent in 2014, underlining the dwindling competitiveness of Kenya’s factories.

Firms operating in SEZs such as Export Processing Zones in Athi River enjoy tax incentives on corporation and value added taxes, among other packages, aimed at boosting exports by cutting down on operating costs.

Kenya has the largest number of SEZs in Africa at 61, making up a quarter of the 237 of the total SEZs, according to United Nations Conference on Trade and Development June report.

“Although the objective of most SEZs on the continent is to enhance manufacturing and exports in low-skill, labour-intensive industries such as garments and textiles, some countries are targeting diverse sectors and higher value addition,” UNCTAD said.