NAIROBI, August 11 – Deputy Prime Minister and Trade Minister Uhuru Kenyatta has said that his ministry is reviewing the Export Processing Zone Act to enable sectors such as horticulture take advantage of the special economic benefits offered in the areas.
Speaking to the Federation of Kenya Employers (FKE) on Monday, Kenyatta said that the amendments would be contained in a sessional paper that he would present to the Cabinet for approval in the next two weeks.
“We are hoping to convert the Export Processing Zone Authorities (EPZAs) into what we are calling Special Economic Zones, which would be applicable not just in Athi River but in other areas as well,” the Minister explained.
Under the EPZ Act, which was enacted in 1990, companies are offered various benefits such as tax holidays, exemption from import tariffs and simple legal procedures.
He said that the new Act would take into account some of the concerns raised by these industries such as the cut flower sub-sector, which contributes billions of shillings in foreign exchange.
At the meeting, the DPM also said that he would push for the privatisation of local sugar companies as one of the ways to make the sugar sector competitive.
“We have agreed that the government needs to get out of business, and so we need to facilitate some of these institutions to go into private hands that have the capacity to adequately modernise those plants to become competitive,” he added.
Observing that the COMESA secretariat had made it clear that it would not grant Kenya another extension of its safeguard measures, the Minister said all the necessary steps need to be urgently taken before the expiry of the term in 2012.
“I’m telling my colleague in the Ministry of Agriculture that it is not enough to continue putting bans on the imports. We need to take measures that will ensure that Kenyan products can effectively compete in the regional market.”
He was referring to a decision by the Agriculture Minister William Ruto to ban sugar imports and exports in a bid to stem the smuggling of the duty free commodity into the country, which had resulted in an influx of cheap sugar in the market.
“We may think that we are protecting that farmer but ultimately what we are doing if we don’t change, is making sure that he (farmer) will not have a market for his products,” Kenyatta warned.
He reiterated the government’s commitment towards ensuring an enabling environment for the sector to operate in.
During the meeting, Labour Minister John Munyes appealed to the FKE to submit the names of members who would represent it in discussions on how to implement the contentious labour laws.
Noting that the implementation could not be delayed further, Munyes said FKE had to be represented in the National Labour Board so that negotiations on the labour laws, which were passed in October 2007, could continue.
FKE National Chairman Patrick Obath said that the implementation of the enhanced maternity and paternity leave and the compulsory insurance cover would cost any given company an additional Sh13 million per year.
“It’s only through the Board that I can take these issues back to Parliament for amendment,” Munyes said.