Kenya’s government has announced that policies around its new special economic zones (SEZs) will enter into full effect by the first financial quarter of 2016.
Recently signed into law by Kenyan president Uhuru Kenyatta, the Special Economic Zones Act aims to be a roadmap to increased trade activity and rapid industrialisation in Kenya, according to non-profit researcher Brookings.
The SEZs will cut transportation costs as the production of goods will take place much closer to raw material sources.
In addition Brookings points out that the SEZs will also create significant tax cuts for investors in the zones, including value added tax exemption and a reduced corporate tax from 30% to 10% for a period of 10 years.
Kenya is not the first country to implement SEZs, notes the researcher. Specialised zones are becoming a common method for fostering economic growth in developing countries.
