Business Daily (Nairobi)
George Omondi
29 May 2008
By around one o'clock when Industrialisation minister Henry Kosgey finished a tour of the Export Processing Zones (EPZ) at Athi River, thousands of job seekers - some previously laid off - had gathered at the entrance with various grievances.
Some waved dismissal letters in the hope that their protests would attract attention from officialdom. But Mr Kosgey's convoy sped past without granting them an audience. Dejected, they dispersed, their only hope for redress of alleged abuses by the companies having returned to Nairobi.
Mr Kosgey, however, was not oblivious to their plight. He did not have ready answers. He had earlier told journalists that the tour was meant to assess the working environment at the EPZ and the capacities that can be enhanced to absorb more workers.
Export Processing Zone Authority (EPZA) acting CEO, John Akara, said 30 per cent of jobs have so far been lost in processing zones in the last five years. "The number of workers employed by the 71 firms based at the country's 39 EPZs has dropped from 50,000 in 2003 to 35,000 today," he said.
During the same period the number of workers employed by the 17 firms based at the Athi River EPZ - the largest in the country - dropped by almost 50 per cent, from over 12,000 to 6,600.
"Most of the remaining firms operate at between 30 to 50 per cent of their capacities and retrenchment is still inevitable unless the government urgently improves the investment environment," said Mr Akara.
Investors at the Athi River EPZ cited the increased cost of doing business, due to high labour and energy costs. The country's laws, they charged, favoured workers in case of industrial disputes including reinstatement of employees sacked for participating in illegal strikes.
"A team made up of professionals should be appointed to review our investment climate. The problems are well known but no action has been taken over the years," an investor at the zones told the minister. The investors want the EPZA empowered to handle all administrative and regulatory matters on behalf of government.
"We fail to understand that issues like water, health, industrialisation, labour, trade and agriculture cannot be addressed by EPZA officials on the ground," they said in a petition.
Last year, the country fetched Sh29.3 billion from EPZ, out of which Sh4.5 billion came from the Athi River zone. Mr Kosgey believes that with increased internal efficiency and value addition, many more Kenyans can be absorbed at the Athi River zone alone.
On Wednesday, Mr Kosgey heard that the EPZ investors' confidence was at its lowest ebb and many of them were set to close shop unless their problems are urgently addressed.
"The aim of my ministry is to steer our investors into seizing control of the value chain, right from raw material to finished products," the minister said after touring Botanical Extracts EPZ Ltd - a firm which extracts and exports artemisinin, a malaria drug raw material.
Patrick Henfrey, the firm's CEO, said the company, which he claimed was also operating below 50 per cent of its capacity, had a potential of producing raw material for manufacturing anti-malarial drugs for the whole of Africa but high operation costs prevent them from extending support to farmers.
Mr Kosgey said that a 1.5 million litre water tank had been put in place to store water for Athi River firms.
Earlier, EPZA had blamed the frequent job losses within the zones on an influx of cheap Asian imports following the 2005 expiry of WTO's agreement on textile and clothing.
"The increasing threat of China in textile trade, particularly with the expiry of the continent's quotas, has proven to be a challenge for a number of companies based at EPZ," Mr Akara said late last year.
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