Workers at the United Aryan EPZ Ltd in Nairobi, Kenya. The country is
pushing for EPZ firms to be allowed to sell nearly half their annual
products within the region. PHOTO | SALATON NJAU | NATION
East African Community partner states have once again rebuffed
Kenya’s push to remove restrictions on investors in Export Processing
Zones (EPZs) and allow them to sell more products to the regional
market.
At the just concluded Sectoral Council on
Trade, Industry, Finance and Investment in Arusha meeting, partner
states failed to reach consensus on the access threshold.
Tanzania, Rwanda, Uganda and Burundi remained firm on their long-standing positions on the EPZ market access threshold.
Kenya
wants EPZ firms to export a minimum of 51 per cent of their annual
production and sell a maximum of 49 per cent within the region.
Currently,
EPZ producers are allowed to sell 20 per cent of their total annual
production within the EAC, and Kenya says this has compelled some
investors to withdraw their multimillion-dollar investments from the
country.
A report from the Arusha meeting shows that
Burundi proposed a threshold of 30 per cent, saying that a higher
percentage would be unfair on companies that are not established in the
EPZs and therefore cannot get incentives provided in the free zone
regime.
Tanzania proposed that the partner states should adopt the
Special Economic Zone programme, which allows firms to sell on the local
market 100 per cent or export 100 per cent while Rwanda recommended a
stay of 20 per cent while further analysis is undertaken.
Uganda is also seeking further consultations and analysis in order to come up with a national position.
Kenya
argued that during the formulation of the Customs Union Protocol, the
experts overlooked the fact that EPZ firms already had a market share of
20 per cent of their annual production in the host country, hence there
was a need to increase the threshold to cater for the “lost market” due
to expansion of the “new” domestic market — the EAC.
Findings
of a study conducted by the EAC secretariat confirmed that Kenya lost
16 EPZ companies whose primary market access was the EAC Partner States
while other firms are holding back their investments waiting for a
resolution of this matter.
Nairobi says the effect of this is a loss of $1.5 million in investment and 5,440 jobs.
The
same study shows that there were other incentives being offered in the
EAC region to industries in the Customs territory that are similar to
incentives offered to the existing EPZs, yet their products are
accessing the Customs Territory without being subjected to Common
External Tariff and other charges.
This situation creates an uneven playing field to those firms domiciled in the EPZ.
No comments :
Post a Comment