Kenyan President Mwai Kibaki Saturday announced major plans to transform the Export Processing Zones (EPZ) to economic zones to attract investors into the lucrative export and manufacturing sectors in the East African country.

Addressing the country’s top economic think-tank, the National Economic and Social Council meeting here Saturday, President Kibaki said the EPZs would be transformed into economic zones and would be set up in all the major cities and towns.

“The cabinet has approved the transformation of the export processing zones into economic zones to spread the entrepreneurship opportunities. These economic zones would be available in all cities and towns in Kenya,” Kibaki said.

Kenya’s EPZ, set up in the 1990s to save the country from an acute shortage of foreign currency and balance of payment constraints, has increased job-creation in the East African country, creating some 40,000 jobs annually.

But these EPZs, mainly specializing in the export of apparel to the US and the African Growth and Opportunities Act (AGOA), have been under severe competition from China after the World Trade Organisation (WTO) opened up the US market.

WTO effectively ended the African monopoly on textile exports, opening it up to Chinese exporters, who effectively edged out most African exporters.

President Kibaki said the setting up of the economic zones would enable these facilities to diversify the range of industrial products produced within those zones.

He said the economic zones would help Kenya to grow rapidly in 2009.

Amongst the factories to be set up within the economic zones would be agricultural processing factories, information, communication technologies (ICT) firms and other industrial parks.

Kenya is considered one of the most industrialized states within the East African region.

Its exports account for 35 per cent of the US$ 6 billion annual trade within the Common Market for Eastern and Southern Africa (COMESA) region of 19 states.

President Kibaki also told the country’s top economic think-tank that their most important national duty this year must be to set up a new national transport and infrastructure corridor to open up the country to its neighbouring states.

He said the setting up of two transport corridors from Lamu, down around the country’s north coast, would open up a new transport route to Southern Sudan.

He also said the Malaba transport corridor, up west, would also enhance communication around the West.

The Malaba transport corridor, according to the President, would ease connections between Kenya and its chief trade partners, Uganda and Rwanda.

Kenya exports 52 per cent of all its industrial produce to Uganda.

“We need two more transport corridors. We shall build the two transport corridors,” Kibaki told the experts, including key ministers, senior economists from Africa, the Middle East and the United Kingdom, who have been selected to sit on the panel.

Kibaki said the successful setting up of the economic zones would clearly show that the government had a “good, consistent and functioning economic framework to deal with the challenges that Kenyans face.”

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