KENYA- According to the Parliamentary Committee for Trade and Investments (PCTI), operations at the Special Economic Zone (SEZ) in Naivasha could come to a halt in the next few days after the National Treasury’s decision to cut its budgetary allocation to zero.
The SEZ required KES 10 billion (US$76.9 million) to complete ongoing development works. However, the government initially reviewed this funding allocation to KES 1.5 billion (US$11.5 million) before it was slashed to 0 following President Ruto’s decision to reject signing the Finance Bill 2024/2025 into law.
The decision to slash allocations to zero comes barely a few days after the government revealed that 11 local and international companies had successfully obtained land from the SEZ, while eight investors were on the waiting list.
The Parliamentary Committee on Trade and Investments (PCTI) revealed that the decision to slash funds meant for the development of the SEZ is detrimental to the facility, which has previously attracted an array of local and international investors.
The Committee implored the government to reconsider the decision, promising to engage the president in the coming days.
James Gakuya, the Committee’s Chairman, said, “We shall engage the government in order to allocate more funds to help address basic infrastructure at the SEZ, including water system, electricity and linking roads.”
Gakuya also revealed funding allocation for Economic Processing Zones (EPZ) flagship projects has also been slashed from KES 1.8 billion (US$13.8 million) to KES 1.2 billion (US$9.2 million), which is also expected to negatively affect growth.
Investors have expressed their worry and displeasure over the government’s decision to slash development funding.
In an interview with The Star, Mungai Kihuyu from Crystal Foods Company expressed frustration over the decision, stating his company was in the process of constructing a potato processing plant in the industrial park.
He reiterated the decision would have negative impacts on both his business, the local agribusiness sector, and Kenya’s economic trajectory as a whole since the SEZ provided a structured framework for exports and value addition.
The SEZ Authority declined to comment on the concern raised by PCTI and investors; instead, it revealed to news outlets that the Authority was currently reviewing bids from investors thanks to favorable incentives.
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