Kenya is eyeing multi-billion investments from China for the country’s Special Economic Zones(SEZs), as the country prepares to host the Kenya International Industrial Expo.
Through Kenya Investment Authority (KenInvest), the government is marketing at least nine SEZs in Mombasa, Naivasha and Machakos with about 9,000 acres designated for investments.
The government is leveraging on the SEZs as part of its plans to boost Foreign Direct Investment (FDIs) in post-Covid-19 economic recovery.
SEZs are designated areas aimed at facilitating export–focused investments by both local and foreign investors.
KenInvest managing director Moses Ikiara yesterday said the government has also set up 75 Export Processing Zones (EPZs) across the country ading that these come with a lot of incentives for investors.
It includes cheaper electricity tariffs of as low as at $5 cents (about Sh5) per kilowatt hour.
This is lower compared to the traditional charges of between Sh10 and Sh15 per unit of electricity, which has been blamed for making Kenyan un-competitive.
SEZs are also considered to be outside the customs territory of Kenya, and therefore operate in a jurisdictional that shields them from taxes and other regulatory bureaucracy.
Tax incentives include exemption from paying, in part, excise duty, income tax, customs duty and value added tax on all special economic transactions by licensed SEZs enterprises, developers and operators established within the zones.
“We encourage Chinese firms to invest in these special economic zones where we can have manufacturing and value addition investments,” Ikiara said.
At least 93 Chinese companies , 50 from industrial rich and China’s economic hub of Shandong Province are expected to showcase at this year’s expo.
The forum seeks to link local businesses to potential partners in China in area of general machinery which include agricultural , construction , food-processing , packaging and textile machinery.
Other areas are building material, agriculture equipment , medical equipment, hardware and tools, electrical and new energy products and automobile and spare parts.
According to Ikiara, the country must must embrace and adopt to new technology to realize the dream of industrialization, which is at the center of the Big Four Agenda.
“One of the ways of ensuring local enterprises grow is by forging partnership with the likes of China. We are urging the Chinese companies to set up industries here in Kenya by tapping into government’s industrial parks,” Ikiara said.
Afripeak Expo Kenya Limited managing director Gao Wei yesterday noted there is high interest from Chinese companies to invest in Kenya.
“Kenya is a strategic investment destination and getway to the East Africa region. It is an industrial hub where many Chinese firms are keen to invest in especially in machinery and industrial development,” Wei said.
At least 400 Chinese firms have set base in the country with major focus on infrastructure, retail and real estate.
Foreign Direct Investments (FDI) from China to Kenya are in excess of Sh84.1 billion in the last five years, hitting a high of $410.1 million(Sh44 billion) in 2017.
The country remains one of the top FDI destinations in Africa, coming third in business volume and value, only after South Africa and Egypt.
Meanwhile, the private sector is pushing for a bridge on the trade deficit between Kenya and China, which according to the KNCCI vice president Erick Rutto, China exports to Kenya 34 times what it imports from the country.
“We must engage in joint ventures with our Chinese counterparts in order to balance the trade between Kenya and China, we can tap into the experience of Chinese enterprises to grow our local capacity,” Rutto said.
Source: The Star