EPZs now push for wider local market

Export Processing Zones Authority (EPZA) is pushing for investors in the sector to be allowed to sell 70 per cent of their products locally.

The move comes with the expansion of the East African market at the end of the month when the Common Market Protocol is signed.

After adoption of the protocol, all five member countries will constitute a local market.

Currently, firms in the zone are allowed to dispose of only 20 per cent of their products on the local market.

“The region has a combined population of over 200 million people which means that if EPZs are allowed to sell 70 per cent here, they will enjoy a wider market,” said EPZA chairman Mathenge Wanderi on Wednesday.

He said although the goods will have to be subjected to normal taxes and a 2.5 per cent surcharge, this is not expected to dampen the benefits of a larger market since investors will now move bigger volumes.

The chairman spoke to investors in Mombasa during the third EPZA investors forum.

He said the authority is pursuing efforts to market the zones to other countries so as not to rely on the African Growth and Opportunity Act which allows preferential exports to American markets such as Europe, Asia and China, he said.

“We are targeting the fast growing ICT (Information and Communication Technology) sector, electronics and other fast-growing sectors of the economy. We are seeking investors who can come up with industrial ICTs,” said Mr Wanderi.

Trade minister Amos Kimunya, who was represented by a director in the ministry Leonard Ngaithe, said increase in domestic expenditure by the EPZ programme from Sh500 million in 1998 to Sh11.3 billion last year, was a clear indication of the important role the sector plays in the development of the country’s economy.

Economic zones

“I would like to impress on EPZ investors to pursue strategies of improving on efficiency in production in order to increase the scope of operations and enhance productivity which will help counter the challenge posed by the high cost of production,” said Mr Kimunya.

The government plans to transform the areas into Special Economic Zones whose draft policy Wednesday's forum was due to discuss and make suggestions on the best operational model to be adopted.