Nipate
Forum => Kenya Discussion => Topic started by: RV Pundit on July 01, 2019, 12:20:56 PM
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Of Ethiopia. There are industrial parks under construction in nearly every major town under constructions. Mostly Chinese and Indians. Around 500 acres big each. Gov of Uganda acquired the land and give it for free to Chinese - and plus 10 yrs tax holiday. I have been holed in one the last two days - after my truck broke down inside it - and Chinese are working 14hrs daily - building factories - for anything from making bulbs to smartphones assemblies.
Kenya nothing - except DL Langat Eldoret one. The last EPZ was built by Moi in 1990s in Athi River/Kitengela. SEZ just exist in paper - so is Naivasha Kengen, Leather park in Athi and of course Dongo Kundu.
Museveni is transforming Uganda...Kampala one - Namanve is already a mature industrial park.
The establishment of Up-Country Industrial Parks by UIA is in progress:-
1. Soroti IPB is 350 km North East of Kampala and is 219 acres in size. Five acres of land in the IBP have been allocated to the Teso Fruit Farmers Association to tap the large fruit potential in the region.
2. Kasese IBP ( 217 acres) is located 430 km from Kampala in Western Uganda near the border with the Democratic Republic of the Congo ( DRC). The IBP location is intended to stimulate agricultural products value addition and mineral beneficiation in the region.
3. Mbarara SME Park is a 12 acre facility built up to cater for small scale enterprises adjacent to Mbarara Municipality 280 km southwest of Kampala.
4. Mbale IBP is located in Mbale Municipality 250 km East of Kampala.
5. The Jinja IBP ( 182 acres located 80 km east of Kampala) is being established. More land is to be acquired in the near future. Jinja is being re-activated as a major industrial town that it once was.
6. In Moroto, 417 acres of land have been identified for acquisition. Mineral beneficiation activities are being targeted for employment generation.
7. Negotiations to acquire 500 acres of land to establish the Gulu IBP at have been initiated. Gulu is 350 km North of Kampala.
8. Land ( 150 acres) has been identified for the establishment of an IBP in Kabarole and Kyenjojo Districts.
9. It is planned that in 2011/12 land for an Oil Park ( 500 acres) be procured in the Masindi / Hoima area.
10. In implementing the Presidential Initiative ( PIRT) it is planned that a Leather Tanning Park ( 300 acres) be established in Eastern Uganda.
11. Bids to provide IPB land continue to be received by the UIA from Masaka, Bushenyi, Lira, Iganga and Mubende.
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What's so special about an industrial park? Just a bunch of clustered warehouses. Kenya low manufacturing base isn't cause of lack of warehouse. The problem that needs addressing are
1.Cost of energy
2. Cost of inputs( all production inputs shouldn't be taxed, from import duty to excise duty). EPZ tax holidays should be extended to manufacturers who are selling to local markets. Why special preferential treatment for exporters. This is one of the reason why we never create our own brands that can compete globally. A wrangler jeans made in kenya cost $19.89 at a walmart store yet the same jeans after being used its sold locally as mutumba for $10. Alot of kenyans could afford a brand new one for $15.
3.Zero rate all capital investment goods i.e machinery
4. Regulations. Try setting up a factory and you'll be amazed at all the regulations one has to comply with which are just toll stations for bureaucrats.
Finally we have alot of idle buildings in rural areas, why not just utilize those to start with.
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What's so special about an industrial park? Just a bunch of clustered warehouses. Kenya low manufacturing base isn't cause of lack of warehouse. The problem that needs addressing are
1.Cost of energy
2. Cost of inputs( all production inputs shouldn't be taxed, from import duty to excise duty). EPZ tax holidays should be extended to manufacturers who are selling to local markets. Why special preferential treatment for exporters. This is one of the reason why we never create our own brands that can compete globally. A wrangler jeans made in kenya cost $19.89 at a walmart store yet the same jeans after being used its sold locally as mutumba for $10. Alot of kenyans could afford a brand new one for $15.
3.Zero rate all capital investment goods i.e machinery
4. Regulations. Try setting up a factory and you'll be amazed at all the regulations one has to comply with which are just toll stations for bureaucrats.
Finally we have alot of idle buildings in rural areas, why not just utilize those to start with.
Agreed. Just like real estate which are cropping up everywhere, industrialists are drawn by competitive advantages. There is little to none of that here so why bother? They’ll just turn out empty as our shopping malls.
I also don’t think there is much to gain from these unless they are manufacturing for local consumption at less than in part. Import inputs in FX, export output in FX, then repatriate all profits in FX,and while at it you pollute the air and pay employees peanuts
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Why does Kenya start talking about manufacturing and the many companies have closed up manufacturing in Kenya and no politician even bothered to intervene. Good expamples of the past 5 years:
1. Everready in Nakuru. The company is now importing batteries and the into realestate.
2. Sameer Tyres. Now imports tyres from China and India.
3. Unilever. Now most products are imported from Egypt.
The list is long and we cannot talk of getting manufacturers to Kenya when the old established ones are leaving.
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That of course makes a lot of sense; But I feel there is space for these SEZ/EPZ - if we have to lessen the risk of foreign investors and if our competing countries - are dolling out these incentive. Egypt basically did that and we saw most of our companies relocate there. The same with Ethiopia.
What we have is youth bulge problem - so anybody willing to provide jobs - should have a carpet rolled out for.
What's so special about an industrial park? Just a bunch of clustered warehouses. Kenya low manufacturing base isn't cause of lack of warehouse. The problem that needs addressing are
1.Cost of energy
2. Cost of inputs( all production inputs shouldn't be taxed, from import duty to excise duty). EPZ tax holidays should be extended to manufacturers who are selling to local markets. Why special preferential treatment for exporters. This is one of the reason why we never create our own brands that can compete globally. A wrangler jeans made in kenya cost $19.89 at a walmart store yet the same jeans after being used its sold locally as mutumba for $10. Alot of kenyans could afford a brand new one for $15.
3.Zero rate all capital investment goods i.e machinery
4. Regulations. Try setting up a factory and you'll be amazed at all the regulations one has to comply with which are just toll stations for bureaucrats.
Finally we have alot of idle buildings in rural areas, why not just utilize those to start with.
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Yes - part of it is China & India of course undercutting everyone - but Ethiopia and even Uganda - are growing their industrial base - while ours has dropped to 7-8% of GDP - we used to do 17-20% during 60-80s - we need to get there - and we need to copy models that work - Egypt. Ethiopia and name - them are dolling out incentives that are luring Chinese and Indians - tax holiday - we forgo tax - we get employment. We need to compete with Ethiopia and even Uganda - who are giving out free land, 10 yr tax holiday, subsidized electricity and the works. We cannot fix all issues at once - so we can as well start with SEZ/EPZ where we can at least replicate China conditions in some 1km sq of land.
Why does Kenya start talking about manufacturing and the many companies have closed up manufacturing in Kenya and no politician even bothered to intervene. Good expamples of the past 5 years:
1. Everready in Nakuru. The company is now importing batteries and the into realestate.
2. Sameer Tyres. Now imports tyres from China and India.
3. Unilever. Now most products are imported from Egypt.
The list is long and we cannot talk of getting manufacturers to Kenya when the old established ones are leaving.
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That of course makes a lot of sense; But I feel there is space for these SEZ/EPZ - if we have to lessen the risk of foreign investors and if our competing countries - are dolling out these incentive. Egypt basically did that and we saw most of our companies relocate there. The same with Ethiopia.
What we have is youth bulge problem - so anybody willing to provide jobs - should have a carpet rolled out for.
There's no need for SEZ or EPZ all we need is to address core issues that affect production. Egypt and Ethiopia have cheaper power and its not vated. They don't tax raw materials and when they do is a low rate unlike kenya. Cost of labour is low and not necessarily cause wages/salaries but cause of high labour productivity incase of egypt. This yr. budget manufacturing was allocated over $1b, for what? The leather park , there was no need for a park instead the government should have facilitated financing of leather manufacturing equipment to private sector. Spending over $200m on land and warehouses in mavoko is just a harebrained idea.
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Uhuru and Ruto are more geared to giving away land to Museveni and Kiir for imports warehouses to ensure they get the remaining cut on the obscenely inflated SGR costs.
Why bother with so much work on industrial parks while your offshore accounts will be lined with billions by just signing on the dotted line??
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HK..1B dollars for leather park..that is a lot but with night time tarrif and subsidized electricity that should help a little.I just feel we cannot just wait..we have to go out there and bring some of the Chinese here
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It could be time to study keenly what the few manufacturers doing well are on. The like of PK guys Wrigleys, bread guys all over, Manji House, EABL, Bamburi and such.
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It could be time to study keenly what the few manufacturers doing well are on. The like of PK guys Wrigleys, bread guys all over, Manji House, EABL, Bamburi and such.
They are just making things that people want at a price that is affordable.