Export Processing Zones are areas that encourage foreign investments by giving incentives to export-oriented businesses. These incentives include tax exemptions, infrastructural provisions, and quick licensing approvals. Export Processing Zones play a critical role in boosting Kenya's manufacturing sector.
Number of EPZs in Kenya
Kenya had 101 gazetted Export Processing Zones and 170 operating enterprises in 2023. The total number of people employed in EPZs in 2023 was 76,383. The number of employed locals was 75,598, while 785 were expatriates.[1]
The total number of privately owned EPZs in Kenya was 91, while those owned publicly were 10. The chart below shows the number of gazetted EPZs from 2019 to 2020.
Distribution by county
EPZs play a massive role in determining a region's manufacturing output. Counties with EPZs in their localities had higher manufacturing output than those without, impacting their overall GCP.
Mombasa County had the highest number of Export Processing Zones, with 27, followed by 16 in Kilifi and seven in Nairobi. In addition, Kwale had eight EPZs, Machakos had seven, Kiambu had six, and Nakuru had four.[1]
As the table below shows, counties with more export processing zones contribute more to the national manufacturing output.[2]
|
County |
Number of EPZs |
County Contribution to Manufacturing (%) |
|
Mombasa |
27 |
9.6 |
|
Kilifi |
16 |
4.6 |
|
Kwale |
8 |
0.8 |
|
Nairobi |
7 |
36.9 |
|
Machakos |
7 |
7.8 |
|
Kiambu |
6 |
8.4 |
|
Nakuru |
4 |
3.9 |
|
Murang’a, Bomet, and Embu |
3 |
|
|
Kisumu, Kirinyaga, Nandi, Uasin Gishu, and Meru |
2 |
|
|
Kajiado, Elgeyo Marakwet, Laikipia, Narok, Kitui, Busia and Homabay |
1 |
Total Sales from EPZs
Sales from Export Processing Zones reached Ksh 111.4 billion in 2023, down from a total of Ksh 116.3 billion. These sales were, however, a significant increase from a total of 77.2 billion in 2019. The chart below shows the total sales from EPZ in Kenya.[1]
Exports accounted for Ksh 105 billion of the total EPZ sales, while domestic sales amounted to Ksh 6.4 billion.
Imports and capital investments by EPZs
Export processing zones made a capital investment of Ksh 146.4 billion in 2023, up from a total investment of Ksh 107.9 billion in 2019. In addition, EPZs made local purchases worth Ksh 16 billion in 2023, up from Ksh 9.8 billion in 2019. The chart above shows capital investments in EPZs from 2019 to 2023.[1]
The value of imports by export processing zones was Ksh 55.7 billion in 2023, up from Ksh 39.8 billion in 2019.
African Growth and Opportunity Act (AGOA)
AGOA is a United States initiative toward African countries that incentivizes them to produce apparel for export to the United States. Kenya makes these garments in some select EPZs.
Employment
The total number of enterprises engaged in apparel manufacturing under AGOA was 39 in 2023, an 8.3% increase from 36 enterprises in 2022. However, the number of people employed in these enterprises decreased by 12.5% from 66,260 in 2022 to 58,002 in 2023.
Capital investments and exports
Capital investments for the manufacture of garments in EPZs increased by 16.7% from Ksh 25.1 billion in 2022 to Ksh 29.2 billion in 2023.
Exports reduced by 10.4% from Ksh 56.7 billion in 2022 to Ksh 50.8 billion in 2023. The chart below shows the value of exports in millions from EPZ garment manufacturing.
See Also
References
- KNBS 2024. Economic Survey 2024. Nairobi, Kenya. (pp. 267 - 268).
- KNBS 2023. Gross county product 2023. Nairobi, Kenya. (p. 18).
