Power Utility Distributor Extends Internet to Homes

The fibre to the home partnership between electricity distributor Kenya power and telecommunication services providers like Safaricom is a novel approach to cost cutting efficiency and universal access. 

On cost efficiency, apparently it costs about KSh 7,000 to bury a meter of fibre optic cable, but the cost of hanging the internet cables on power poles is significantly lower.  Kenya Power also says that it will make savings by using its existing labour force to connect fibre cables to homes. 

See more here.

Retail Distribution Services in Kenya

This is an interesting piece on the retail distribution services sector and the inflow of foreign brands into Kenya.  The growing retail sector has attracted international brands such Foshini Group, French supermarket chain Carrefour and fast-food companies like Pizza Hut, Subway and Burger King.  

Read more here.

Kenyan Crude Oil Headed to the EU?

Despite the oversupply of oil, low prices and high transport costs, Kenyan crude oil from the Turkana region is apparently headed for the EU. Civil Society is apparently calling first for the construction of a pipeline to transport the oil but seems the oil will be transported by trucks and trains which is costly.

Read more here.

Conference and Business Tourism Services in Kenya

This is an interesting piece. 

Apparently Kenya hosted 243 global and continental meetings in 2016 which attracted multi-billionaires and many Heads of State and government to the country.  In addition to conference tourism, Kenya is also seem as a business services hub by institutions seeking to access the greater EAC region and beyond.

Read more here.

EPZs and SEZs

The transformation of the policy, legal and regulatory framework of Export Processing Zones (EPZs) in Kenya will see them converted to Special Economic Zones (SEZs) and replicated in all 47 counties in the country. See more here.

The SEZ concept has evolved globally to include a wider range of economic activities with the aim of accelerating growth and development as opposed to only focusing on manufacturing for export. SEZs have been adopted in other countries such as China, Mauritius, Egypt and India and have widened the range of activities included in the economic zones to also accommodate companies with a domestic market orientation and those in the services industry. In Kenya the SEZ will widen the domestic market to include the EAC. 

The move from EPZ towards economic zones in Kenya will require the current EPZ Act to be amended. Further, there will be a need for the harmonization of the new Act with other government Acts and policies that may be hindering investment and effective investor facilitation in the zones.  A sound legal and regulatory framework is a necessary first step for a successful zone program, particularly one designed around private sector development and operations.

According to previous article found here on SEZs, China used a number of policies to ensure that technology transfer would take place domestically through the SEZ, through joint ventures between foreign investors and local firms and that strong domestic players would emerge. In fact, 100% foreign owned firms were a rarity among the leading players in the industry in China and the goverment can be applauded for a determined effort to capture and acquire domestic capabilities to build modern industries. 

According to the World Export Processing Zones Authority (WEPZA) zones have generally failed to have a catalytic effect in most African countries in part because they have been disconnected from wider economic strategies; they are often put in place and then left to operate on their own, with little effort to support domestic investment in the zones or to promote links, training, or upgrading. Unlocking the potential of zones appears to require clear strategic integration of the program as well as active government leadership to facilitate the positive impact of the zone.  According to the WEPZA, in Africa few, if any, appear to treat the zone programs as an important pillar of wider economic growth, industrialization, and trade strategy.

In addition, high-level, active government commitment to zone programs is a significant contributor to their success. This support must be consistent over the long term: The evidence from even the most successful zone programs suggests that it normally takes 5–10 years after zones launch (thus, possibly 15 years or more from when a project was first conceived) before a zone begins to show signs of success. In analyzing the East Asian successes with economic zones, the role of political leadership— in terms of both vision and active support along the path of planning, implementation, and operation—is clear. African zone programs have largely failed to secure this kind of consistent and active commitment from senior political leaders. 

 

In cclosing, successful programs such as those in Mauritius, Malaysia, and China use their zones as part of a group of instruments designed to promote wider economic policy reform, diversification, and upgrading. They also have strong governmental leadership.

For previous post on EPZs in Kenya see here