Transcript KENYA

AFRICA GROWTH AND OPPORTUNITY ACT
(AGOA) AND AFRICA AS A SOURCING AND
INVESTMENT DESTINATION
KENYA
AGOA and Africa as a Sourcing and Investment Destination.
EPZA Kenya - InterTextile Shanghai Apparel Fabrics 19 March 2015
Margaret Waithaka
Export Processing Zone
Authority
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INTRODUCTION TO KENYA (1)
KENYA
AGOA and Africa as a Sourcing and Investment Destination.
EPZA Kenya - InterTextile Shanghai Apparel Fabrics 19 March 2015
• Centrally located
• Regional Hub
• Globally
connected
• 4 weekly direct
flights (KQ) to
Guangzhou
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INTRODUCTION TO KENYA (2)
Political
Demographic
Democracy with New Constitution
(2010)
Population 43 million
Jubilee Govt. of President Uhuru
Kenyatta since 2013
Rapidly urbanizing, 2.7% annual
pop. growth rate
Two levels of Govt. – national + 47
county governments
English as official language
Politically stable – elections every 5 Sustained investment in education,
years, only 4 Presidents in 51
literate population
years.
Vision 2030 Economic Blue Print
325,560 students in universities
KENYA
AGOA and Africa as a Sourcing and Investment Destination.
EPZA Kenya - InterTextile Shanghai Apparel Fabrics 19 March 2015
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INTRODUCTION TO KENYA (3)
Economic Indicator
GDP ( US$ million, 2013)
55,243
GDP Growth rate (2013)
5.7 %
Inflation Rate (2013)
5.7%
Total Exports ($ million,
2013)
5,834
Globally 7 out of 10 fastest growing
economies are in Africa.
KENYA
AGOA and Africa as a Sourcing and Investment Destination.
EPZA Kenya - InterTextile Shanghai Apparel Fabrics 19 March 2015
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KENYA-CHINA RELATIONS
• China fourth to open embassy in Kenya after Independence
• His Excellency, President Uhuru Kenyatta visited China in
2013, held talks with His Excellency Xi Jingping and signed
deals worth US$ 5 billion
• Chinese Premier, Mr Li Keqiang, visited Kenya in 2014. 17
multi-billion shilling infrastructure deals signed
• Major infrastructure projects in Kenya executed by Chinese
companies – Lamu Port Project, Airport Expansion,
Standard Gauge Railway, Major highways
KENYA
AGOA and Africa as a Sourcing and Investment Destination.
EPZA Kenya - InterTextile Shanghai Apparel Fabrics 19 March 2015
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KENYA’s ECONOMY
Composition of Kenya's GDP % 2013
Agriculture
15.3%
Other Primary activities
25.3%
Manufacturing
6.7%
Electricity and Water Supply
Construction
6.7%
1.1%
Wholesale/retail trade, repairs
Hotels/Restaurants
4.1%
8.9%
4.8%
1.4%
4.4%
9.1%
1.5%
10.7%
KENYA
AGOA and Africa as a Sourcing and Investment Destination.
EPZA Kenya - InterTextile Shanghai Apparel Fabrics 19 March 2015
Transport/Communication
Financial Intermediation
Real Estate, Rental and business services
Public Admin and Defence
Education
Other activities
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Africa’s Apparel Sector exports to USA under
AGOA (2014) US $ million
ETHIOPIA
TANZANIA
MADAGASCAR
SWAZILAND
MAURITIUS
LESOTHO
KENYA
0.0
100.0
200.0
300.0
400.0
KENYA – LEADING SSA
EXPORTER TO USA (US$
379 million)
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AGOA and Africa as a Sourcing and Investment Destination.
EPZA Kenya - InterTextile Shanghai Apparel Fabrics 19 March 2015
KENYA TEXTILE ADVANTAGE (1)COST EFFECTIVE LABOUR
CATEGORY OF WORKER
CITIES (US$
PER MONTH)
RURAL TOWNS
(US$ PER MONTH)
Machinist
150
92
Machine assistant
115
58
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Workforce with good English language and Mathematics skills
87 % literacy levels and 100% primary school enrollment
Good work ethic, adaptable, trainable
Government supported skills training for clothing industry
30 universities and over 100 vocational training institutions around country
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AGOA and Africa as a Sourcing and Investment Destination.
EPZA Kenya - InterTextile Shanghai Apparel Fabrics 19 March 2015
KENYA TEXTILE ADVANTAGE (2)TAX BENEFITS TO INCREASE PROFITS
• 10- year Corporate Tax holiday and 25%
corporate tax for next decade
• 10 year Withholding Tax holiday for
payments to non-residents e.g. dividends,
license fees, consultancy charges
• Exemption from Import Duty, Excise Duties
and Value Added Tax on machinery,
building materials, raw materials, inputs,
contracts, supplies and services
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AGOA and Africa as a Sourcing and Investment Destination.
EPZA Kenya - InterTextile Shanghai Apparel Fabrics 19 March 2015
KENYA TEXTILE ADVANTAGE (3)MARKET ACCESS AND SPEEDY HANDLING
• Single License Issued by EPZ Authority
• Accelerated approvals
• Fast Track Import/export facilitation at Port and
inland
• Customs, Immigration and Utility Facilitation
• Duty Free Access to US Market under African
Growth and Opportunity Act for 6,000 products
including clothing and textiles (can use non-African
fabric and stitch in Kenya)
• Duty free access to European Union market under
Economic Partnership Agreement (can use nonAfrican fabric and stitch in Kenya)
• Preferential duty on sales to COMESA member
states
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AGOA and Africa as a Sourcing and Investment Destination.
EPZA Kenya - InterTextile Shanghai Apparel Fabrics 19 March 2015
KENYA TEXTILE ADVANTAGE (4)COMPETITIVE INFRASTRUCTURE & ENERGY
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Lower electricity cost for textile, apparel and
leather industry (US $ 0.09 per Kilo Watt
Hour)
Serviced land with water, electricity, sewer
and roads in EPZs
Land rent US$ 5,000 per hectare (10,000 sq
meters) per year or pay once at US$ 100,000
Up to 50 year leases on land
Ready factory buildings, warehouses and
office of many sizes (600 sq m to 3,000 sq m)
for lease
Rental US$ 25-35 per sq m per year for
buildings
Cluster of support services and accessories –
buying houses, zips, washing plants,
chemicals
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AGOA and Africa as a Sourcing and Investment Destination.
EPZA Kenya - InterTextile Shanghai Apparel Fabrics 19 March 2015
KENYA TEXTILE ADVANTAGE (5)- SUMMARY
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Politically stable strong
economy
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Top exporter in SSA to US
market under AGOA
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Preferential market
access arrangements
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Differentiated wages
depending on location
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Government focus
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Attractive incentives
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Green channel at ports
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Lower power costs
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Well established textile
and apparel sector
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Highly productive
educated labour
AGOA and Africa as a Sourcing and Investment Destination.
EPZA Kenya - InterTextile Shanghai Apparel Fabrics 19 March 2015
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KENYA TEXTILE ADVANTAGE (6)INVESTMENT OPPORTUNITIES
TO MEET INCREASING DEMAND AND PROVIDE
JUST IN TIME INPUTS, INVEST IN:
• Textile Yarn units to produce Man Made Fibre
and Cotton Yarns and threads
• Textile Mill investment to product knit and
woven fabric to meet demand of apparel
exporter
• Accessory production plants to supply buttons,
chemicals, zips and labels for apparel sector
TO EXPAND OUR EXPORTS OF FINISHED
GARMENTS, INVEST IN:
• Apparel stitching plants to export to USA and EU
as well as regional COMESA market
• Buying houses
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AGOA and Africa as a Sourcing and Investment Destination.
EPZA Kenya - InterTextile Shanghai Apparel Fabrics 19 March 2015
KENYA TEXTILE ADVANTAGE (7)OUR CONTACTS:
Chief Executive
Export Processing Zones Authority
Athi River EPZ, Off Namanga Road
P.O. Box 50563 - 00200 Nairobi, Kenya
Tel: +254-45-6621000,
Email: [email protected],
Website: www.epzakenya.com
THANK YOU!
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AGOA and Africa as a Sourcing and Investment Destination.
EPZA Kenya - InterTextile Shanghai Apparel Fabrics 19 March 2015