Sales from the export processing zones (EPZs) grew 21.7 percent to Sh136.2 billion last year attributed to an increase in the number of firms gazetted as EPZs and a strong demand in the export market.
Data from the Kenya National Bureau of Statistics (KNBS) shows that this has resulted in an increase in the employment rate at the zones and in the formal manufacturing sector by 1.9 percent to 369,200 people.
“Total sales from EPZs grew by 21.7 per cent to Sh136.2 billion in 2024 from 111.9 billion, mainly driven by strong demand in export markets. Additionally, domestic sales increased by 6.8 per cent to Sh6.78 billion in 2024,” said KNBS.
Exports rose from Sh105.5 billion to Sh129.4 billion in the period under review.
Domestic sales grew from Sh6.35 billion to Sh6.78 million in 2024.
Imports by these export processing zones rose 23.1 percent to Sh71.8 billion from Sh58.3 billion a year before.
They purchased an additional 40.5 percent of goods and services locally amounting to Sh22.96 billion from Sh16.3 billion in 2023.
KNBS adds that the number of Kenyans directly employed by the export zones rose to 89,941 in the year ended December 2024 from 75,598 while expats numbers fell by 3.6 percent.
“Direct employment of locals increased by 18.9 per cent to 89,900 persons in 2024… This expansion was primarily driven by the increased number of EPZ firms across various sectors, particularly in apparel and agro-processing enterprises,” added KNBS.
The report adds that employment of expatriates declined by 3.6 percent from 785 persons in 2023 to 757 persons in 2024.
“As at December 2024, the number of gazetted zones increased from 102 in 2023 to 105,” said KNBS.
Investment in EPZ manufacturing activities increased by 5.6 percent to Sh34.1 billion in 2024.
The total investment value in EPZs rose by 15 percent, reaching Sh171.9 billion.
These comprised 96 privately owned and operated zones, while 9 were publicly owned.
Mombasa had the largest number of zones at 28, followed by Kilifi with 17 and Kwale with nine.
Nairobi, Machakos and Kiambu counties each had seven zones, whereas Nakuru and Murang’a had four each.
Bomet and Embu counties each had 3 zones, while Kisumu, Kirinyaga, Nandi, Uasin Gishu and Meru counties had two zones each.
Firms in the EPZs get attractive fiscal, physical, and procedural incentives, including a 10-year corporate income tax holiday as well as a 100 percent investment deduction on new investments, applicable over 20 years.
The firms are also granted perpetual exemption from payment of stamp duty on legal instruments and payment of value-added tax and customs import duty on inputs. The incentives are aimed at attracting and retaining firms that can create many jobs at scale for the export market.
