Industry, Investment and Trade Cabinet Secretary Adan Mohamed said increasing investor confidence will herald a new dawn in industrial and trade investments in the country and promised to publish the SEZ regulations in March.
“We are keen to fasttrack the implementation of the SEZs to uplift the industrial sector, which despite its potential, has not been dynamic enough to function as an engine for growth for the Kenyan economy as has been the case of newly emerging economies,” said Mohamed during an inter-governmental forum reviewing draft regulations to govern the country’s SEZs in Naivasha late Monday.
Mohamd said Kenya is on course to commence with implementation of three Special Economic Zones in Mombasa, Lamu and Kisumu following Presidential assent on September 11, 2015.
SEZs will be designated export zones for goods and services that will enjoy tax benefits on income and capital goods.
The intention is to increase Kenya’s export volume and diversify the range of exports currently dominated by agriculture produce.
The tax incentives are meant to attract foreign investors enabling the country to increase its attraction to foreign direct investment and benefit from skills transfer from foreign companies setting bases here.
Kenya also wants to take advantage of the low level of manufacturing output in Africa in the face of growing intra-Africa trade.
Mohamed said the Special Economic Zones Act that is now in place has set the pace to accelerate the industrial transformation in the country.
“This is being complemented by the ongoing infrastructure projects geared towards making our country a cost effective manufacturing destination yielding competitive trade products,” he said.
He added that private sector stakeholders will in the next two weeks participate in the validation of the regulations that will be crucial in the operationalization of the new Act.
Implementation of the Special Economic Zone concept is pivotal for Kenya industrialization plans in line with Kenya’s Industrial Transformation Plan (KITP) blueprint in execution for the next decade.
The SEZ is intended to contribute towards the transformation of the country’s economic base by driving a higher sustained growth, employment creation and poverty reduction.
It is expected to aid in doubling the current manufacturing sector jobs to approximately 1 million jobs, adding year on year 2-3 billion U.S. dollars to Kenya’s GDP in the next decade. Enditem