EPZ units wage a relentless battle

19 May '06
2 min read

Growing processing costs threaten Kenya at losing millions of shillings worth of investments as industrial units under commission in the Export Processing Zones (EPZ) have warned of leaving the nation.

The burly shilling (against the US dollar), high fuel prices and transportation costs are foremost anxieties that the Kenya Garments Manufacturers Union, which represents industrial units in the zone and it wants the Government to intervene.

Producers declared that the depreciation of the dollar is anticipated between eight and ten percent had created a situation where investors were forced to shut their trade in the US currency.

They also viewed that Kenyan textile exporters faced stiff competition from rival belonging to China, India, Bangladesh and Egypt, which benefit due respective government largesse in the form of subsidies and tax benefits.

WIth the implementation of the textile quotas free regime under World Trade Organization (WTO), all nations can transport whatever capacity to the US, unlike that during the period prior to 2005 when some African nations used to be benefited under the Africa Growth and Opportunity Act (Agoa).

Thomas Pathoor, Chairman, stated at a press conference in Mombasa that the processing expenses had gone up by about 40 percent in the last two years forcing some factories to shut.

As a result, about 6,000 workers lost their jobs last year, and more are expected to follow suit if the Government does not make serious efforts to solve their problems, he added.

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