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BIG 4 WOES

'Dead' trade hubs blur Uhuru's industrialisation plan

In Summary

• Areas set aside for Special Economic Zones largely idle; lack basic amenities, water and electricity.

• During this week's visit by France President Emmanuel Macron, Uhuru said the government is still keen on strengthening the manufacturing agenda under Big Four.

• In June 2015, Treasury CS Henry Rotich stated in his 2015-16 budget statement that the government had allocated Sh3 billion for industrial development, including SEZs.

TARGETED: EPZs will be transformed into Special Economic zones if the bill is passed.
TARGETED: EPZs will be transformed into Special Economic zones if the bill is passed.

President Uhuru Kenyatta’s industrialisation plan in the Big Four agenda has been thrown into disarray following the near-death of Special Economic Zones.

The trade hubs were to be established in Mombasa, Kisumu, Eldoret, Makueni and Nakuru but none has been operationalised since roll-out in 2016.

They are riddled with infrastructure problems, including the one in Eldoret where at least 14 firms are building plants in readiness to kickstart their operations.

The government was expected to construct roads to the sites, offer incentives such as lower taxes, stable power supply and water as well as help investors cut down on cost drivers such as transport.

During this week's visit by France President Emmanuel Macron, Uhuru said the government is still keen on strengthening the manufacturing agenda under Big Four.

"As we continue the journey of building a better Kenya with shared prosperity for all, we have prioritised manufacturing as one of the critical sectors for wealth and employment creation," he said.

The President signed the Economic Zones Act in 2015 and has been championing for their development.

In June 2015, Treasury CS Henry Rotich stated in his 2015-16 budget statement that the government had allocated Sh3 billion for industrial development, including SEZs.

But Martin Wambora, the chairman of the Council of Governors Trade committee, told senators on Thursday that taxpayers are yet to get value for money from the investment into the hubs.

For the Eldoret case, he told the lawmakers, state agencies are to blame for the slow uptake, citing ERC’s laxity in issuing a license to a firm seeking to produce 80MW of power.

Wambora told the Senator Charles Kibiru-led committee the disconnect between the national and county governments over the SEZs is to blame for the zero activities.

“For instance, Nakuru county government has no information of what is happening or the progress of an expression of interest developed two years ago,” he said.

For Kisumu, the council of governors said a master plan and feasibility study of the SEZ are yet to be developed. The county has set aside 600 acres for the economic zone, which is not sufficient.

“The county has requested the national government for more money to carry out a forced acquisition of land,” Wambora said, adding that there is no infrastructure in place.

In Mombasa, a committee comprising the Ministry of Trade, Kenya Ports Authority and Mombasa county, which was formed to steer the work is inactive.

The county complained that they are not involved in the committee’s activities and are not aware of what is going on.

The situation has been worsened by squatters who have occupied the area set aside for the Dongo Kundu SEZ.

Uhuru’s administration has also positioned Konza Techno City as an ICT hub in its SEZ development plan.

However, the project in Makueni county is yet to start amid complaints by local investors over costly land rates.

“For instance, they are charged Sh15 million for a 50-year lease of 1.56 hectares and a yearly charge of Sh1.1 million. This, to the locals, is very costly,” Wambora said.

Nyandarua Senator Paul Githiomi challenged governors to push for funds to activate the SEZs “as a lot of it is lost to corruption cartels.”

“We can’t mince our words to the effect that the industrialisation agenda in Big Four is a hoax. Furthermore, the taxation regimes in this country cannot encourage investments.”