Kenya plans to use special economic zones to boost FDI

Kenya plans to use Special Economic Zones (SEZs) in order to boost the amount of Foreign Direct Investment flowing into the country, an official said on Wednesday.

Ministry of Industry, Trade and Cooperatives Permanent Secretary Julius Korir told a media briefing in Nairobi that Kenya currently attracts 2 billion U.S. dollars of foreign capital into the country annually.

"Through the use of SEZs, we hope to push the figure to 10 billion dollars annually due to the incentives that they will provide," Korir said during the launch of the Employer of the Year Awards.

The SEZs are expected to lure investors by offering tax holidays and world class infrastructure to those who set up shops in Kenya. The zones will be located close to areas with key raw materials for industrial products.

Korir said that the zones will also help to improve the competitiveness of products manufactured locally.

"One of the key reasons why Kenya is a major importer of manufactured goods is due to the fact that production costs are high," he noted.

Korir said that the SEZs will replace Export Processing Zones (EPZs) that were established over 20 years to promote the country's industrial sector.

He noted that the SEZs will be an improvement of the EPZs that are meant to export majority of their products.

"The SEZs will have a major impact on the economy by allowing them to sell to the domestic market," he added. Endit