An analysis of the legislative framework governing special economic zones in kenya

Abstract

This study examines the legal framework governing special economic zones (sezs) in kenya and china.This is with a view to identifying the gaps that exist in the kenyan model and subsequently recommending an appropriate framework which will fill the gaps and thus enable the successful implementation of the model in kenya.It argues that despite the fact that there is in place a legislative framework governing sezs in kenya, the same is marred with various inadequacies which can lead the country in failing to achieve economic liberalization as envisioned in the economic pillar of vision 2030.These inadequacies fall into two main limbs as discussed below. The first limb is the non-implementation of the existing provisions of the law on the criteria of setting up these zones.While the law clearly provides that factors such as land availability, infrastructure, topography, construction constrains ,presence of other business enterprises, effect of the sezs on the society and the environment have to be carefully considered before setting up these zones, politicians have on numerous occasions undermined the role of the sez authority such that some zones are set up as a tool for political leverage without consideration of this factors. The second limb is the failure of the legal framework to address important issues such as labour despite the fact that one of the factors that led to the failure of export processing zones (epzs) in the country was exploitation of workers and labour rights abuses in the zones. The fact that kenya intends to achieve economic liberalization through the use of this model makes it necessary for the country to address these two limbs to enable the country to attain the economic pillar of vision 2030.Once these two issues are fully addressed, sez’s will be a promising strategy for attracting fdi in the country.

This study goes further and focuses on sezs in china especially the history of sezs in that country and their legal and institutional framework. China serves as a good benchmark since it has over the years developed strong bilateral relations with kenya which continue to yield benefits for both countries economically. The africa economic zone sez in uasin gishu county for example is a product of the economic cooperation between kenya and china. The research project in the last chapter recommends that the legal and institutional framework in kenya should be strengthened in order for the country to fully benefit from this model.This can be done by the amendment of the sez act and regulations to include labour issues which are completely left out.Other recommendations are strict adherence to the provisions of law governing the criteria for setting up sezs in the country,skills training, provision of investment incentives, institutional autonomy for the zones to make their own laws and elimination of corruption.Once the existing legislative weaknesses are addressed, the country will be able to finally achieve economic liberalization in accordance with the economic pillar provided in vision 2030.The study finally concludes that despite china’s success in this model, the model nevertheless has to be carefully implemented and tailored in accordance to kenya’s specific conditions for it to achieve the desired results.