TRALAC - Trade Law Centre

Kenya: Business picks up in EPZ but energy costs high

Wednesday, 30 March 2011

Source: Nairobi Star (Nairobi)

Business at the Export Processing Zone (EPZ) is steadily picking up after exports were bit by the global financial crisis, a report by the EPZ authority shows.

The report indicates that 100 local and foreign companies ploughed in Sh 22.6 billion in investments in 2010 a 5.4 % increase in investment as compared to the previous year.

Out of the total companies spread across the country 54.7% are foreign owned and came in to take advantage of the African Growth and Opportunity Act (AGOA) that gives countries incentives to open up their economies and build free markets.

EPZA's acting chief executive Joseph Kosure, while releasing the report at their head office in Athi River, said owing to several reasons that have plagued the global financial economy six foreign companies closed shop in 2009.

Kosure said both local and foreign investors, that mostly deal with garments for the markets in America, exported goods valued at over Sh28.6 billion while domestic market fetched Sh2.3 billion last year.

He said the companies inject more than Sh120 million into the country's economy every month.

Other than the taxes they pay to the government, Kosure said the companies employ 31, 124 skilled and un skilled workers of which only 416 are expatriates who are only required to serve in the country for a a specific period.

However as business grows most of the companies operating at the Athi River EPZ are calling on the government to improve provision of various services.

The companies cited lack of government subsidies, high cost of electricity and alleged interruption of power supply as some of the impediments in their businesses.