Nakuru County to create regional industrial hubs to boost economic growth

Nakuru, Thursday June 15, 2023

KNA by Esther Mwangi

Nakuru County Government has approved a policy document to establish and implement County Aggregation Industrial Parks (CAIPS) and Special Economic Zones (SEZ) to boost economic growth in the County.

Governor Ms. Susan Kihika said her government would be working closely with the Ministry of Investments, Trade and Industry (MITI) to start CAIPS in line with the bottom-up economic transformation agenda adding that the industrial parks will help grow industrialisation and promote investment, create employment and boost exports. 

Speaking during the County Cabinet meeting, Kihika described County Industrial Parks and Special Economic Zones as critical drivers of investment and magnets of technology that drive production.

She added that they were envisioning Industrial Parks and Special Economic Zones that will host light industries such as warehousing and logistics and supporting industries, medium and heavy industries such as manufacturers of fertilisers, iron and steel, plastics and packaging, and fabricated metal products. 

The Governor noted that the County was also looking forward to CAIPS and SEZs that could host steam-intensive industries such as pulp and paper, wood and wood products, textiles and apparel, food and beverages, and leather industries.

Kenya has 15 gazetted Special Economic Zones which form part of the ambitious plans to create thousands of jobs and boost exports to spur economic growth by 2030.

The establishment of industrial parks is part of Kenya's industrial transformation programme which was launched in July 2015. SEZ are designated areas aimed at promoting and facilitating export-oriented investments in a bid to boost inflows.

The plan to set up the regional industrial hubs comes at a time when Kenya has set a cheaper power tariff of Sh10 per unit at the 15 special economic zones. The zones are spread across Naivasha, Mombasa, Kisumu and Machakos. The Olkaria-Kedong SEZ in Naivasha has been enjoying a cheaper tariff of Sh5 per unit.

The tariff is the lowest rate per unit of power across all the consumption bands under the new regime, highlighting the State’s resolve to improve the investor climate in the face of increasing competition from countries that offer investors cheap electricity.

Besides the special electricity tariffs, SEZs enjoy special taxes and infrastructure that facilitate a wide range of activities such as storage, export and re-exports. SEZs offer industrial parks, free trade zones, as well as other auxiliary services such as tourism, meeting, conferencing and exhibitions.

The national government has pledged Sh250 million for construction of CAIPS to each county which shall be matched with a similar amount or more by the respective counties. 

The Council of Governors (COG) has since committed to match the figure with an equal amount or more, besides providing a minimum of 100 acres of land for the establishment of the Parks.

Kihika said her administration would also encourage CAIPs to adopt a farmer centered and export-oriented approach to enable small scale farmers and producers to contribute to the aggregation, marketing and export of produce from across the devolved unit.

Once the parks are constructed, the government has agreed with Equity Bank who have promised Sh250 billion to support the purchase of manufacturing equipment for industries willing to invest in the parks.

Through a support project being implemented through the State Department for Industry dubbed ‘Viwanda Mashinani’, the government is also establishing a fund to give Micro, small and Medium Enterprises and young people equipment worth Sh6 million each to commence manufacturing activities.

The programme has attracted many partners and potential investors including Afro-Exim Bank, Equity Bank, Trade Mark East Africa, DHL, Tatu City, KNTC, Twiga Foods and KIRDI with The United Nations Industrial Development Organization (UNIDO) promising to provide technical assistance.

The establishment of the 47 CAIPS will ensure aggregation of farm products and their direct sale to markets in and outside the country through a network of international logistics companies.

The Ministry of Investment, Trade and Industry will additionally set up agro-processing and value addition cottage industries in the counties that will spur local economic growth and make farming lucrative as a job creating mechanism.

In Africa, Kenya has the largest number of SEZs with 61, ahead of Nigeria, South Africa and Ethiopia. However, these have not really taken off owing to the lack of a coherent policy.

Courtesy ; K. N. A