Kenya’s Industrialization and Development Agenda: An Assessment of the Effects of Policy Changes on Operation of Export Processing Zones.

Because of the failures of import substitution policy, most developing countries shifted their industrialization policy to export-led industrialization: Manufacturing under the development plan was given high priority and the industrialization agenda was supplemented by the establishment of Export Processing Zones (EPZ). The main objective of this study is to examine Kenya’s current industrialization and development agenda through Export Processing Zones and assess the effects of policy changes on operation of EPZs. The study was guided by the following specific objectives; to examine Kenya’s industrialization and development agenda; to examine the existing policy framework for operation of Export Processing Zones in Kenya and to examine how the changes in existing policy framework affect the operation of EPZs and the industrial and development agenda. The findings guided by the research objectives indicated that; to achieve industrialization Kenya has since the 1990s used export-led growth strategies and schemes like EPZs to attract Foreign Direct Investment; create employment and pursue overall industrialization and economic growth. Secondly, EPZs in Kenya rely on various national, regional and international policies like; EPZs Act, AGOA, Vision 2030, SEZ Act and the EAC Customs Union Protocol for their operation. Thirdly, changes in these policies have affected operation of EPZs both positively and negatively. The study concludes by recommending that the cost of doing business for EPZs investors in Kenya should be reduced, Kenya should explore new export markets and increase export of other products that are not just textile and garments, EPZs should produce for local consumption and the government should focus on implementation of policies that foster industrialization.