Why State should invest in EPZs

As the Export Processing Zone Authority (EPZA) celebrates confirmation that a global textile manufacturing firm is set to begin operations in Kenya next year, the agencies should not lose sight of the reality that the country will not attain Vision 2030 by relying on foreign investors.

President Uhuru Kenyatta needs to appreciate, too, that whereas he might create 500,000 jobs in the growing of cotton, employment of 100,000 workers in the manufacturing of apparel could prove a mirage unless the State sets up of the requisite industries.

Reports that by investing Sh1.5 billion, the Sri Lankan firm will become the largest apparel and textile manufacturing company in the country is a demonstration that lack of money should not be an insurmountable problem as it has often been claimed.

This proposition is supported by the huge cash that Treasury dishes out to support ailing State firms that should have been closed many years ago and fund projects whose costs have been inflated beyond acceptable limits. It would be logical for Treasury to put a lid on such disbursements and invest in industries whose products have a ready export market.

Treasury might also consider raising the funds needed for such investments from the public and the local money markets via special bonds in the same manner it raised funds to finance infrastructure beginning with the time when the current president was the finance minister.

History shows that those infrastructure bonds were hugely popular and were heavily over-subscribed.

Co-operative movement

The Trade, Industrialisation and Cooperatives Minister might also be persuaded to consider raising such funds from the country’s co-operative movement. After all, in the absence of such invests that could earn huge returns for co-operators, investment decisions are left to the discretion of officials who routinely invest in property whose prices are inflated.

There have also been incidents when the liquid co-operative societies have been lured into investing in questionable financial institutions that become a drain on their finances.

Past arguments that such enterprises would be mismanaged do not hold much sway as firms in which the State has interests are making profits that are the envy of their peers owned by the private sector.

Co-operative Bank, which has risen from the ashes of the terrorist bombing of the US Embassy is a testimony that the co-operative movement has the potential to develop the country.

Kenya should stop relying on foreign investors to create jobs because they leave can leave the country worse off.