EPZ manufacturers to sell products domestically once Bill is passed

Workers at an Export Processing Zone (EPZ) textile factory in Athi River. Photo/FILE

Manufacturers operating within Export Processing Zones will be allowed to sell their products in East Africa Community (EAC) countries, once the Special Economic Zones Authority Bill 2011 is passed by Parliament.

After the coming into effect of the EAC common market protocol which transformed the region into a domestic market in July last year, EPZs say their export market has “shrunk”, since they are only allowed to off load 20 per cent of their products domestically and export the rest.

However, these limitations will be a thing of the past, since the Bill proposes radical changes, among them the scrapping of market limitation, Nr Mathenge Wanderi, Export Processing Zones Authority (EPZA) chairman said during a workshop in Kwale to sensitise local residents on EPZ opportunities in the region.

Due to stiff competition from Asian countries for foreign markets and high production costs in the country especially on electricity, most manufacturers operating in the EPZ framework have closed down.

“We want to encourage more manufacturers to venture into the special economic zones we are setting up, and it is important that we remove these conditions,” he said, adding that the Bill had passed through the necessary approvals and will soon be tabled in Parliament.

However, the proposal might not go down well with local manufacturers who have opposed the move through their umbrella body, the Kenya Association of Manufacturers (KAM), saying EPZ operators will pose unfair competition.

“They enjoy a tax holiday besides other tax exemptions, reduced import duty and waivers meant to promote exports. If they are allowed to off load their products in the same market we operate in, it will give them undue advantage,” said KAM chief executive, Ms Betty Maina, in an earlier interview.