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1.
Executive summary................................................................................................................................................................... 7
2.
Introduction & Background ................................................................................................................................................... 7
3.
Situational Analysis................................................................................................................................................................. 13
4.
5.
6.
3.1.
Macroeconomic Environment................................................................................................................................... 13
3.2.
Political environment ................................................................................................................................................... 15
3.3.
Social Environment ....................................................................................................................................................... 16
3.4.
Technological Environment ....................................................................................................................................... 16
3.5.
Environmental Factors (Ecology) ........................................................................................................................... 17
3.6.
Legal and Policy Environment .................................................................................................................................. 17
3.7.
Competitors ...................................................................................................................................................................... 21
3.8.
Microeconomic Environment.................................................................................................................................... 23
3.8.1.
Stakeholder Analysis ..................................................................................................................... 23
3.8.2.
SWOT Analysis............................................................................................................................... 23
3.8.3.
Financial Performance Overview .................................................................................................. 25
3.8.4.
EPZ Program Performance Overview ............................................................................................ 29
EPZA Strategic Direction 2014-19 .................................................................................................................................... 36
4.1.
Vision ................................................................................................................................................................................... 38
4.2.
Mission................................................................................................................................................................................ 39
4.3
Core values ........................................................................................................................................................................ 39
4.4
Strategic Themes ............................................................................................................................................................ 39
4.5
Strategic Outcomes ........................................................................................................................................................ 40
4.6
Tag Line .............................................................................................................................................................................. 40
EPZA Strategy ............................................................................................................................................................................ 41
5.1.
Product ............................................................................................................................................................................... 41
5.2.
Market ................................................................................................................................................................................. 43
5.2.1.
Market Segmentation ................................................................................................................... 44
5.2.2.
Sector Segmentation..................................................................................................................... 44
5.2.3.
Target Market ............................................................................................................................... 46
Implementation plan: Balanced Scorecard approach ............................................................................................... 47
6.1.
Customer Perspective .................................................................................................................................................. 48
6.1.1.
Increase Business Growth and Citizen Value ................................................................................ 48
6.1.2.
Increase Customer Attraction and Retention ............................................................................... 49
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6.1.3.
6.2.
Improve the EPZA brand ............................................................................................................... 49
Financial Perspective / Stewardship ..................................................................................................................... 49
6.2.1.
Reduce Cost of Doing Business ..................................................................................................... 49
6.2.2.
Increase net foreign exchange earnings ....................................................................................... 50
6.2.3.
Improve Financial Performance .................................................................................................... 50
6.3.
Process Perspective / Internal Business Process ............................................................................................. 50
6.3.1.
Improve Business Operating Environment ................................................................................... 50
6.3.2.
Improve Investment Levels ........................................................................................................... 50
6.3.3.
Improved Internal Business Processes .......................................................................................... 51
6.3.4.
Improved Policy environment ....................................................................................................... 51
6.3.5.
Diversify investment and market opportunities ........................................................................... 51
6.3.6.
Build Strategic Partnerships .......................................................................................................... 52
6.4.
Organisational Capacity (Learning and Growth/People, Technology and Tools)............................... 52
6.4.1.
Improve Corporate Culture ........................................................................................................... 52
6.4.2.
Optimise Human Capital ............................................................................................................... 52
6.4.3.
Embrace knowledge Management ............................................................................................... 52
6.5.
Monitoring and Evaluation Framework ............................................................................................................... 52
Appendix 1: EPZA Financial Projections 2014/15 to 2018/19................................................................................. 53
Appendix 2: Tier 1- Balanced Score Card Implementation Matrix - EPZA Strategic Plan 2014-19 ........... 56
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Foreword
I take pleasure in presenting the 2014-2019 Strategic Plan for Export Processing Zone Authority (EPZA). Over the
past 6 years as chairman of EPZA, I can take note that EPZA has faced numerous challenges and similarly numerous
opportunities for expansion. The full implementation of the past strategic plan 2009 -2013 faced with a number of
policy, institutional and market challenges, despite which I can report that there have been some notable areas of
success.
The EPZA Board has persistently sought to highlight to the Government and to stakeholders, the abundance of
opportunities that EPZ investors can take advantage of and therefore fully utilize the current extensive zone
facilities and export potential open to investors in the EPZ Program.
The Ministry of Industrialization and Enterprise Development has engaged with the Authority and given a very clear
mandate to EPZA to support Kenya’s industrialization effort and to align that support to Kenya Vision 2030,
particularly the second 5 year Medium Term Plan (MTPII). This resulted in EPZA Board and Management crafting
this 5 year strategic plan which aims to scale up and streamline EPZA operations in order to realize this vision. The
key drivers of this plan are a desire to contribute to a greater extent to building a vibrant, dynamic and high growth
economy for Kenya through the promotion of investment and through export trade development. EPZA will explore
new markets and products that will contribute to the improvement of the Kenya’s balance of trade as well and will
as well provide significant employment to absorb the ever expanding labour force.
I have full confidence that by working together with the Ministry and other strategic partners, our dedicated
management and staff, we will meet and overcome the challenges ahead of us, by being clearly focused on
implementing this 2014-2019 Strategic Plan.
I certainly look forward to the Board reporting periodically on progress made in the years ahead.
Mathenge Wanderi
Chairman, Board of Directors
Export Processing Zones Authority
Preface
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I am delighted, as the Chief Executive Officer (CEO) of the Export Processing Zones Authority (EPZA), to present the
2014-2019 EPZA Strategic Plan. This plan builds upon our previous strategic plan and outlines key goals, objectives
and strategies to be pursued, thus providing EPZA’s strategic direction over the next five years.
The primary impetus for the Strategic Plan is a desire to move EPZA away from the traditional approach to doing
business, towards the next level of performance, through scaled up production and sustainability. We have adopted
the Balanced Scorecard as a strategy formulation and performance management tool. Our strategic themes during
the plan period are organisational excellence, customer focus and brand positioning. The vision and mission for the
Authority have been re-crafted and the core values re-stated. In addition, a new tagline “Making Investments
Happen” has been adopted to re-energise the EPZA team to greater achievement.
The key to this new paradigm shift entails the optimal utilisation of available human, physical and financial
resources, embracing knowledge management, enhancing technology, improving corporate culture, forming
strategic partnerships and the streamlining of all business processes to reduce the cost of doing business for EPZ
enterprises. We will thus increase investment levels, improve the policy environment and business operating
environment, diversify investment opportunities and also increase net foreign exchange earnings and investment
levels; all leading towards improved financial performance, improved customer attraction and retention and finally
increased business growth and citizen value.
During implementation of the strategic plan, EPZA will face significant internal and external challenges which
include but are not limited to globalization and high operational costs. We, however, intend to face these challenges
head on and there is no doubt in my mind that having expressed our strategic intent through this document, and
with the combined support and commitment I have received from the Authority’s Board, management team and
staff, EPZA is indeed on the right track to sustainable growth.
Finally, let me take this opportunity to thank the various stakeholders who participated and contributed to the
strategic planning process. These include the Government of Kenya, a supportive Board of Directors, our customers
who participated in focus groups, and finally the EPZA management team and staff who have worked tirelessly to
ensure this plan is crafted and owned by all concerned. I would also like to thank KPMG Kenya for providing a team
of consultants.
Mr. Cyrille W. Nabutola
Chief Executive Officer
Export Processing Zones Authority
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Glossary
AGOA
African Growth and Opportunity Act
BOD
Board of Directors
CAGR
Compound Annual Growth Rate
COMESA
Common Market for Eastern and Southern Africa
CSR
Corporate Social Responsibility
EAC
East African Community
EPA
Economic Partnership Agreement
EPZ
Export Processing Zone
EPZA
Export Processing Zone Authority
EU
European Union
FDI
Foreign Direct Investment
GDP
Gross Domestic Product
GOK
Government of Kenya
MOIED
Ministry of Industrialization and Enterprise Development
MSME
Micro Small and Medium Enterprises
MTP
Medium Term Plan
PESTEL
Political, Economic, Social, Technology, Environmental and Legal
PPP
Public Private Partnerships
R&D
Research and Development
SEZ
Special Economic Zone
SWOT
Strength, Weaknesses, Opportunities & Threats
VAT
Value Added Tax
WTO
World Trade Organization
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1. Executive summary
Export Processing Zones Authority (EPZA) has embarked on development of a strategic plan covering the period
2014 – 2019. Key factors that will influence the current strategic direction in this period and significantly differ
from the environment in which the previous plan was developed are: key changes in EPZ environment, particularly
the East African Community Common Market Protocol, which has limited access to the enlarged local EAC market,
devolution of government to the counties, the development of Kenya’s second Medium Term Plan (MTP II) under
Vision 2030 which provides key targets for public agencies for the period; impact of Kenya’s rising per capita GDP
on the application of export incentives under the Subsidies and Countervailing measures Agreement of the World
Trade Organization (WTO),uncertainty over continuation of preferential market access to USA and European Union
under and the African Growth and Opportunity Act (AGOA) and the Economic Partnership Agreement; and rising
factor production costs and increased competition for global investment from other locations. It is against this
background that the EPZA has embarked on the quest to develop this strategic plan to enable it to better define its
direction as well as to guide the optimum allocation and utilization of its resources.
The export sector in Kenya has experienced stable growth, with export oriented organisations tapping into key
Regional African and Western markets to expand their sales. Higher than average economic growth in the region
has been driven by large infrastructure projects which stimulate demand for supplies; by improved transport
logistics across the East African region by an increasingly economically active population, and by the growth in the
use of technology in financial and telecommunication sectors in the region. In addition, continued demand for
Kenyan primary goods in Western markets has supported Kenya’s traditional exports to EU and Middle East
markets, even as the USA, a newer market, imports more of Kenya’s textile products. At a national level, however,
even as exports have grown, imports have grown even faster, necessitating national export strategies to quickly
address the increasingly negative balance of trade.
EPZA must therefore seize market opportunities, and influence positive changes in the business environment so as
to contribute even more to national exports, investment, employment and GDP, hence the need to re-map EPZA’s
strategic direction.
This strategic plan provides a blue print against which the strategic direction of the EPZA is documented. It seeks to
coordinate and integrate the activities of the various functional areas of the Authority, in order to achieve long-term
organizational objectives using the Balanced Scorecard approach. The score card integrates strategy formulation
with performance management. The use of the balanced scorecard will assist EPZA to align corporate goals across
the organisation, communicate strategic themes, link strategy to initiatives or projects and to cascade strategic
understanding and performance management to all levels within the Authority. The plan also provides a monitoring
and evaluation framework to help measure achievements and redirect efforts where required.
2. Introduction & Background
Strategic planning is a vital process in modern management that guides an organization towards achieving its
business goals. It is the process of formulating, implementing and evaluating cross-functional decisions that enables
an organization to achieve its long-term objectives. The Strategic Plan 2014 -2019 represents the strategic direction
that the Export Processing Zone Authority intends to follow in the next five years. The plan highlights key issues
facing the organization, identifies strategic themes, defines strategic result areas, strategic objectives and the
strategies to follow in the implementation process, to leverage the untapped potential of the EPZ program and
achieve self-sustainability for the Authority.
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EPZA’s directors, top management and stakeholders met in Naivasha from the 25 th to the 27th of September 2013
for a strategy workshop where a broad strategic direction for EPZA program for next five years was deliberated
upon. The board and top management took full cognizance of the various challenges sweeping through the
economy, to general and the manufacturing and export sector, in particular, and the need to align the EPZA’s plan to
these emerging issues, to general sector reforms in Kenya and to the Vision 2030 (with special emphasis on MTP II).
In formulating the current Strategic Plan 2014 -2019, important lessons have been drawn from the performance of
EPZA strategic plan 2008 -2013. There have been notable achievements and challenges.
Key achievements include:


Establishment of the Export Business Accelerator Program: an enterprise incubator program that focuses on
improving participation of indigenously Kenyan owned, small scale enterprises (SMEs) in the EPZ program. As
a result of this program, local ownership of EPZ companies has risen from 17.3% in 2010 to 25.6% in 2012.
Consistent growth in the principal performance indicators such as exports, total sales (turnover), capital
investment and employment creation.
Key challenges include:



The re-definition of the domestic market to include the East African Community member states, which meant
that EPZ firms will be unable to sell more than 20% of their annual production in Kenya, Uganda, Tanzania,
Rwanda and Burundi, markets that have traditionally been key export markets for firms in the EPZ program.
Uncertainty of the extension of third party textile imports for companies producing garments and apparel
under AGOA.
Rising production factor costs for transport, energy and labour.
External stakeholders play a key role in ensuring that EPZA achieves its strategic objectives . In particular, the
importance of support received from the Ministry of Industrialization and Enterprise Development, and the
National Treasury in the realization of the strategic plan cannot be underestimated and they along with other
goverment departments were interviewed during the process. Interview sessions were held with key stakeholders
in both the public and private sector including: Ministry of Devolution and Planning, Kenya Institute of Public Policy
and Research (KIPPRA), National Economics Social Council (NESC), Kenya Investment Authority, University of
Nairobi – in conjunction with National Council for Science and Technology. From the private sector, Microsoft
Corporation, FOTON, (a motor company) were interviewed among others. Meetings, including a focus group
session, were also held with current EPZ companies to understand the existing challenges they are facing and to
understand the role the authority can play in assisting them.
An extensive review of the internal and external operating environment of EPZA was undertaken to guide the
crafting of the current strategy. Key external environment factors considered were political, economic, social,
technological, environmental and legal factors (PESTEL). The internal environment involved analysis of the various
internal performance factors and are presented in tabular and graphical forms in the report. The mission, vision and
values were reviewed and in some instances re-crafted, and a tag-line or slogan was also devised. The Customer
Value proposition (CVP) was restated. The SWOT and PESTEL analysis together, provided the strategic
organisational assessment, and an institutional critique based on past performance was undertaken to come up
with achievements to-date, challenges and emerging issues. These were then collated into pains and enablers,
which coalesced into 3 strategic themes with 16 strategic objectives. The strategic themes were developed into a
strategy map explaining cause and effect relationships between key strategic objectives using four perspectives : at
the foundation - learning and growth (dealing with organisational capacity or people, tools and technology);
internal business processes; financial perspective and finally, at the apex the customer perspective.
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The strategic objectives were then developed into a five year strategy implementation plan, which incorporated
strategic objectives, strategic initiatives or projects, performance measures and performance targets. For each
strategic initiative, start and end dates were provided along with a budget for the 5 year period, culminating in the
development of the first tier strategy implementation plan, endorsed by the Board and management.
The scorecard will be cascaded to all levels of the staff in the Authority to enable proper stewarding and tracking of
the performance of Authority and implementation of the Strategic Plan
Various opportunities exist for upgrading the benefits derived from the EPZ program by the national economy. The
main focus in this Strategic Plan will be on measures that increase investments, improve exports, and that can lead
EPZA to financial sustainability, reducing the contribution by the Exchequer to the Authority’s recurrent budget to
nil, by the end of the plan period
As a result of implementing this strategy, EPZA will tap into existing potential and emerging opportunities and play
its full role as a key catalyst in GDP growth through sustainable export growth, expansion of employment and
improved investment in support of national economic development goals.
History and Objectives
The Export Processing Zones Authority was established in 1990 through the Export Processing Zone Act (Cap 517),
for the promotion and facilitation of export oriented investments and the development of an enabling environment
for investment in the export sector. The EPZA is a state corporation, under the Ministry of Industrialisation and
Enterprise Development. The principal objectives of the EPZA are:



Development of all aspects of the export processing zones with particular emphasis on provision of advice on
the removal of impediments to, and creation of incentives for, export-oriented production in areas designated as
export processing zones;
Regulation and administration of approved activities within the export processing zones; and
Protection of government revenues and foreign currency earnings.
The structure of the authority
EPZA, being a state corporation, is governed by The State Corporations Act (Cap 446) in addition to the EPZ Act. It
thus adheres to the rules and regulations stated in both acts in addition to other relevant laws. EPZA is provided
with general direction by a board comprising 15 members appointed from both private and public sectors. The
board is headed by a chairman from the private sector, appointed by His Excellency, the President.
The day to day operations of EPZA are managed by a staff of 160 headed by the Chief Executive Officer, hereafter
referred to as CEO, who is appointed by the Cabinet Secretary for the Ministry responsible for industry, on
recommendation by the Board. EPZA operates from its head office located at the Athi River Export Processing Zone,
and from Mombasa Regional Office at Kipevu Export Processing Zone. The CEO is charged with the direction of the
affairs and transactions of EPZA, the exercise, discharge and performance of the Authority’s objectives, functions
and duties, and the administration and control of the employees of the Authority. To discharge its mandate and
functions effectively, the EPZ authority has been structured in four divisions and a number of departments. The
divisions are:



Business Development;
Operations and Investor Support;
Utilities and Technical Services; and
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
Finance and Administration.
In addition, the Information and Communication Technology (ICT), Human Capital, Corporate Secretary, and
Procurement departments report directly to the CEO. Further, the Risk Management and Audit department which
reports directly to the board. Each division is headed by a general manager and each department is headed by a
manager.
Figure 1: EPZA Organ gram
Board of Directors
Chief Executive Officer
Risk mgt &
GM
GM
GM
GM
Operations &
Investor Support
Business
Development
Fin & Admin
Utilities & Techn
Services
ICT Manager
Audit
Manager
Human
capital
manager
Corporation
secretary
Procurement
secretary
Source: EPZA
The EPZ Act, CAP 517 specifies the following powers, duties and functions that the Authority may exercise, perform
and discharge: .








To advise the minister on all aspects of development of the export processing zones;
To implement the policies and programmes of the government with regard to the development of the export
processing zones;
To identify and map the areas to be designated as export processing zones;
To plan the development, maintenance, and to finance basic infrastructure up to the perimeter of the export
processing zones;
To examine and process applications for designation of export processing zones and issue relevant approvals;
To examine and process applications for licences by the export processing zone developers, operators,
enterprises and issue the relevant licences;
To promote and market export processing zones among investors;
To issue certificates of origin to export processing zone enterprises for the purposes of a generalized system of
preferences and other trade preferences given under bilateral or multilateral trade agreements;
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







To act as a “one-stop” centre through which the export processing zone enterprises can channel all their
applications for permits and facilities not handled directly by the EPZA;
To process building plans and issue relevant approvals in consultation with the ministry responsible for
physical planning and other relevant authorities;
To perform all such administrative functions in relation to the designated export processing zones as would
normally be performed by local authorities;
To maintain current data on the performance of the programme in each individual export processing zone and
export processing zone enterprise;
To enforce within the export processing zone compliance with customs procedures and other requirements for
preventing the unauthorized use of designated export processing zones and export processing enterprises;
To enforce compliance with exchange control procedures and other requirements for preventing the
unauthorized use of designated export processing zones and export processing zone enterprises;
To suspend or cancel the licence of an export processing zone operator or an export processing zone enterprise
or an export processing zone developer which is in the violation of the Customs and Excise Act; and
To do all such other acts as may be incidental or conducive to the attainment of the objective of the Authority or
the exercise of its powers under this Act.
In order to perform the above functions the Authority uses resources partly obtained from the Exchequer in the
form of a grant, and partly from Appropriations in Aid or self-generated revenues obtained from licence fees,
rentals and other service fees.
The program
The EPZ program is a key economic development program of the Government of Kenya (GoK), designed to promote
exports, create jobs, attract foreign direct investment (FDI), increase consumption of local resources, and facilitate
transfer of technology to local companies and workforce. The prevailing international investment environment
requires that for successful attraction and retention of export oriented investment, a package of fiscal, regulatory
and infrastructure incentives are provided. EPZ companies as per section 29 of the EPZ Act are therefore offered
incentives in the form of various tax exemptions, exemptions from certain licences and regulatory permits. The
details of incentives granted to EPZ companies are as follows:
Tax benefits:
 10 year corporate income tax holiday and a 25% tax rate for a further 10 years thereafter (except for EPZ
commercial enterprises);
 10 year withholding tax holiday on dividends and other remittances to non-resident parties (except for EPZ
commercial licence enterprises);
 Perpetual exemption from VAT and customs import duty on imported inputs – raw materials, machinery, office
equipment, certain petroleum fuel for boilers and generators, building materials, other supplies. VAT exemption
also applies on local purchases of goods and services supplied by companies in the Kenyan customs territory or
domestic market. Motor vehicles which do not remain within the zone, motor vehicle spares and fuels for motor
vehilces, are not eligible for duty and VATexemption;
 Perpetual exemption from payment of stamp duty on legal instruments;
 100% investment deduction on new investment in EPZ buildings and machinery, applicable over 20 years.
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Simplified and smooth procedures and operations:
 Operation under a single licence issued by EPZA. EPZA seeks to minimize bureaucracy and administrative
procedures and facilitate licensing, set up and operations of EPZ companies. This includes exemption from
compliance with various laws such as the Statistics Act. The Authority acts as the primary licensing and
regulatory agency on behalf of the government, and collects all required information and data from the
companies for further collation and reporting;
 Rapid Project approval (for licensing) within 30 days ;
 No exchange controls – liberalised foreign exchange regime and easy repatriation of capital and profits, access
to foreign currency accounts, domestic and offshore borrowing;
 Onsite customs documentation and inspection by customs staff. All zones have a resident customs office for onsite customs documentation and clearance. A senior revenue officer is attached to the EPZA management to
assist in all customs related matters;
 Unrestricted investment by foreigners;
 One-Stop-Shop service for facilitation and aftercare – EPZA’s Operations and Investor Support assists new
companies and provides help and advice in the areas of staff recruitment, labour regulations, work permits,
import-export logistics, application for utility connections and registration with tax authorities.
Physical infrastructure benefits:
 All zones are built to exacting international standards and provide facilities suited to export production;
 Serviced land and ready factory buildings are available for sale or lease to licensed EPZ companies. Water,
sewerage, electricity, all weather roads and an illuminated perimeter fence or wall are standard requirements
for zones;
 Zone developers provide 24 hour security, street lighting, landscaping and street cleaning services in the zones.
Private garbage collection firms are retained to dispose of normal office waste; and
 Office premises and industrial buildings and warehouses are available for lease in most zones.
Role of the EPZA and the EPZ Program in Kenya’s economy
From the early 1990’s, Kenya implemented a number of trade and fiscal policy reforms intended to improve
economic performance including expansion of exports by manufacturing firms. The Export Development Program
involved the development of various export promotion schemes including Manufacturing Under Bond and later the
Export Processing Zones program.
The manufacturing sector is a key productive sectors in Kenya and accounted for8.9% of GDP in 2013 The Kenyan
manufacturing sector is the largest in East Africa, serving the local market and providing exports to the East African
region and the world.
Vision 2030, seeks to transform Kenya into an industrializing, middle income country providing a high quality of life
to its citizens in a clean and secure environment, by the year 2030. The Vision is anchored on three key pillars:
Economic, Social and Political. The economic pillar seeks to deliver 10% sustained growth in GDP by 2030. To do
so, 7 sectors have been identified as catalysts: tourism, agriculture and agro-processing, wholesale and retail trade,
manufacturing, IT enabled services and business process outsourcing, financial services and finally, oil, gas and
mineral resources.
Kenya’s Medium Term Plan II 2013-17 (MTPII) is the second in a series of successive 5 year medium term plans
through which Vision 2030 is being implemented.
For the manufacturing sector, the Vision and MTPII focus on the establishment of special economic zones in Lamu,
Mombasa and Kisumu; the development of SME parks and industrial parks in each of the 47 counties in order to
attract new companies, the expansion employment and attraction of FDI. They also target skills development for
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technical resources, value addition including to natural plant resources particularly those with high medicinal,
cosmetic and nutritional value; productivity improvements and training in new technologies for home based value
addition.
The Ministry of Industrialisation and Enterprise Development has produced a national Industrialisation strategy
document entitled: “An aspiration to attain Vision 2030”. The strategy recognises that the country must grow its
GDP by between US$ 4 and 6 billion per year for 17 years to 2030, increase the manufacturing base to deliver 20%
of GDP, increase FDI 5 times over the current level, create an additional 5 million jobs, and attain global top 20
ranking in ease of doing business rankings by 2020. The Ministry’s strategy is one of job creation and
industrialisation built on foundations of improving the ease of doing business; supporting enablers of growth such
as skills development, infrastructure provision, and access to finance; unlocking the potential of small and medium
enterprises (SMEs); developing a compelling FDI attraction plan and building strong government delivery
capability. The key components of the Ministry’s strategy are sector-specific and include:-




Growing critical (agro-processing) sectors where Kenya has scale – tea, coffee, flowers, horticulture
Leveraging natural advantages to create competitive sectors -textiles and cotton, leather, agro-processing,
beef and fishing
Building local industries to support resource and infrastructure investments in oil, gas, mineral,
infrastructure (e.g. steel) and geothermal
Transforming government industry (public sector enterprises including Pan Paper Mills, sugar factories,
coffee millers, coconut and cashewnut processors, livestock processors and Pyrethrum Board of Kenya)
As a key institution in the industrial sector, the Export Processing Zones Authority, in its Strategic Plan, seeks to
make a significant contribution to national economic and social objectives through industrial growth and job
creation.
3. Situational Analysis
As part of the strategic planning approach, EPZA’s situational analysis answers the question “Where is EPZA today”?
EPZA’s situational analysis ensures accurate understanding of EPZA’s environment as it sets out its strategic
direction for the period covering 2014 – 2019. The situational analysis covers both the internal and external
environments of the organization. It assists by identifying all possible strategic directions, hones in on potential
opportunities and threats, while embracing global best practice and key learning points. EPZA leveraged key
elements of its situational analysis in the development of its strategic direction through the strategic organisational
assessment step of the balanced scorecard method.
3.1. Macroeconomic Environment
According to the Economic Report on Africa, (by Economic Commission on Africa (ECA and African Union) economic
growth in Africa strengthened in 2012 to 5 per cent average despite a slowing world economy. (See figure 2).
Political turmoil and tensions in North Africa began to ease, democratic elections were held and new leaders
inaugurated in Egypt and Libya, and normal economic activity began to return. Africa’s medium-term growth
prospects remain strong at 4.8 per cent in 2013 and 5.1 per cent in 2014.
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Figure 2: GDP Growth 2008 - 2013
8
7
6
5
4
World
3
Developing Economies
2
Africa
1
0
-1
2008
2009
2010
2011
2012
2013
-2
In the period 2003-2013, as shown in figure 3, Kenya has not experienced the same growth rates as the rest of Sub
Saharan Africa. According to the World Bank, the weak economic performance is attributed to three main factors: internal shocks, lack of natural resources, and poor economic fundamentals. Internal shocks explained the widening
gap between Kenya’s growth rate and Africa’s growth rate in 2008-09 and 2011, while the other two explained
Kenya’s overall underperformance.
Figure 3: Average Growth Rate in EAC and SSA 2003-2013
6.91%
6.98%
6.96%
Tanzania
Uganda
Rwanda
5.96%
4.61%
3.59%
Burundi
Kenya
SSA exc ZAF
These shocks have caused some reduction in growth giving Kenya 4.6% CAGR growth over the period which is
below the average for Sub-Saharan Africa (leaving out South Africa) of 5.96%, over the period 2003-13 as shown in
figure 3.
However, despite experiencing economic turmoil in its key export markets, the Kenyan economy achieved 2.6%
growth in 2009, exceeding average growth in sub-Saharan Africa for that year. Strong macroeconomic policies and
Kenya’s relatively limited integration into the global economy shielded the country from the worst effects of the
global economic downturn, apart from a steep decline in private capital flows, and subdued exports and tourism
receipts. Despite the economic shocks, the Kenyan economy has shown and continues to show resilience and is
steadily recovering with real GDP growing at 4.2% in 2012 and 4.7% in 2013. Investments in infrastructure
including roads, rail, airport expansion; increases in power supply and improved access to water all support this
growth. At the same time, the Kenya government is keen on undertaking comprehensive structural reforms aimed
at improving the investment climate.
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Table 1: Kenya’s key macroeconomic indicators
Indicator
2012
2013
2014f
2015f
2016f
2017f
2018f
Nominal GDP, US$bn
41.3
45.3
50.6
56.2
62.5
69.5
77.0
GDP per Capita, US$
955
1,021
1,111
1,201
1,303
1,413
1,528
Real GDP Growth, % change y-o-y
4.6
5.6
6.1
6.2
6.2
6.1
5.8
Good and Services Exports, US$bn
11.1
12.3
13.6
14.9
16.4
18.0
19.7
Good and Services Imports, US$bn
18.2
19.9
21.2
22.8
24.5
26.3
28.3
Source: Kenya National Bureau of Statistics, World Bank, Central Bank of Kenya, BMI; f– forecasted
The EPZA has developed its 2014 – 2019 strategic plan taking into consideration the national strategic direction and
allowing for alignment with the MTPII objectives and with the National Industrialisation Strategy.
The situational analysis looks at PESTEL factors which could influence the achievement of EPZA’s strategic results.
Those which result from the macroeconomic environment (E) are:
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Rising factor costs (energy, transport, labour, industrial land),
Stable macrooeconomic environment – relatively stable shilling
Discovery of mineral, oil and gas resources which can reduce energy costs, assist with balance of payments
deficits and support development of basic basic industries e.g. Steel,
High rate of growth in regional markets to provide demand for exported goods
Slow but sure recovery in key Northern markets in USA and EU
High growth rates in Asia, fast rising incomes resulting becoming as potential markets for EPZ investment and
for EPZ products
High growth rates in Africa
Large infrastructure projects which will ease doing business and which are a potential market for basic
constuction supplies – Standard Gauge Railway, Expansion of Jomo Kenyatta Airport, Lamu Port, LAPSSET
Corridor, Olkaria Geothermal projects, KonzaTechnology City, Ethiopia-Kenya high voltage power connection
lines, Special Economic Zone/Free Trade Zone in Mombasa, expansion of trunk roads, urban commuter rail
projects,
Persistence of high interest rates for Kenya shilling based loans to productive sector
Liberalised financial markets making foreign currency loans available for export sector
High cost of devolution and impact of national budget deficit
Widening Trade deficit with high growth in imports
3.2. Political environment
The political environment of an organisation includes government policy, and the legal and regulatory framework
affecting the organization, and thus represents key opportunities or threats for the organization. Changes in policy,
new or amended legislation/regulations, political actions and other activities can affect organizations both
positively and negatively. Increasing global interdependence among economies, markets, governments and
organizations makes it essential that organizations consider the impact of political variables on the formulation and
implementation of strategy. Key issues and trends in the Kenyan political environment include:


Continued political stablity and national cohesion in an enlarging democratic space,
The implementation of the new constitution, e.g. devolution to county governments and dispersal of some
functions of national government;
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Security challenges arising from terrorism;
Ethics and governance challenges;
New focus on economic diplomacy and enhancment of relations with potential markets
Enhanced national planning frameworks such as the Kenya’s Vision 2030 and the MTPII
EPZ firms have been affected by each of the factors mentioned above. The peaceful elections of 2013 raised investor
confidence while the new constitution and the devolved system of government offer diverse opportunities for
investors throughout the country.
3.3. Social Environment
Any change in the social environment of an organisation has a major impact upon virtually all product and service
markets, and on consumers. The social environment includes social, cultural, demographic and environmental
variables. Some of the key issues identified in the social environment include:
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Shifting labour force demographics including changing career attitudes;
Growing middle class in the Eastern and Central Africa region with increasing purchasing power;
Growing mismatch between the skills employers need and the talent available in some key economic sectors;
Talent market becoming increasingly global and more mobile;
Employees gaining more bargaining power, requiring better industrial relations management;
Changing attitude towards authority figures in population, requiring more participatory management in various
industries
Rising urbanization;
Increased costs of living due to internal and external price shocks reducing purchasing power for the lowest
paid, requiring novel ways to manage employee motivation and productivity in key industries;
Changing consumption patterns in major markets, with more affluent consumers placing premium on products
produced in an environmentally sustainable and socially responsible manner;
Changes in land use patterns e.g. conversion of previously arid lands to fertile farmland through irrigation and
increasing settlement of nomadic communities
Increased participation of women inthe work force & heightened focus on gender equality
3.4. Technological Environment
Technological forces represent major opportunities and threats that must be considered in formulating strategies.
Technological advancements affect an organization’s products, services, marketing practices and competitive
position. They can create new markets, result in proliferation of new and improved products, and change the
relative competitive cost position. Revolutionary technological changes and discoveries such as mobile telephony
and wireless communication, computer technology, augmented reality cloud computing, digital imaging, fibre
optics, Electronic Funds Transfer (EFT) are all having a dramatic effects on organizations.
Technology is changing rapidly as the industry aims to achieve efficiency and drive down costs. Advances in
technology can have a major impact on business success, with companies that fail to keep up often going out of
business. Technological change also affects political and economic aspects and influence how organisations compete
in the marketplace. The key technological issues and trends that may affect the EPZ sector include:
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Use of Social Media for communication with markets and with staff
Digital Consumerism – more products being promoted and delivered through digital media
Wide network of Fibre optic cable for broadband communication in key towns
Low cost of mobile telephony and Internet Access
High level of innovation in mobile phone applications
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Embracing E-commerce and the internet in key business processes;
Adoption of new technology for increased food production such as greenhouse production;
Emerging economies as sources of technology and innovation (e.g.Korea, China, India,Israel)
Biotechnology as a source of cheaper bio-fuels, pharmaceuticals, foods and chemicals,
Decreasing costs of technology for exploitation of renewable energy e.g. wind, solar and geothrmal;
3D printing (additive manufacturing)-for both prototyping and distributed manufacturing with applications in
architecture, engineering, construction (AEC), industrial design and automation.
Innovative industry software- manufacturing software and simulation software shortening both product and
production lifecycles
Efficient, clean production technology available
3.5. Environmental Factors (Ecology)
The key issues affecting the physical environment include:
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Lack of adequate urban planning with industries closing in on residential ares, and lacking proper water supply
and waste disposal facilities
Deforestation in key water catchment areas reducing rainfall and affecting rain fed crop production
High levels of air and water pollution in urban areas
Global warming affecting rainfall and temperature patterns
Clean energy and clean technology as emerging as a source of competitive advantage
BASEL Convention limiting global trade in environmentally sensitive products
Governments and companies securing valuable raw materials to sustain their supply chains;
Customers requiring organizations to be more transparent about their sustainability practices;
Global trading in carbon credits and carbon dioxide emissions
Increasing but still inadequate enforcement of local environmental regulations by NEMA
Promotion of reuse, reduce and recyclemethods to better manage domestic & industrial waste.
3.6. Legal and Policy Environment
The Constitution of Kenya (2010) provides several tiers for law making – at national level by the National Assembly
and the Senate; and at county level by the respective county assemblies. These laws are implemented by the
Executive at national and county levels. The new dispensation thus has heightened complexity in the legislative and
in executive functions particularly as they relate to the policy environment for investment and business. A number
of key local, regional and international policies and laws have an impact on EPZA and the EPZ program. These
include:
The EPZ Act
The Export Processing Zones Authority (EPZA) is a state corporation established by the Government of Kenya
through an Act of Parliament – the Export Processing Zones Act (Cap 517 of the Laws of Kenya) for the promotion
and facilitation of export-oriented investment and for the development of an enabling environment for such
investments. The act has undergone a number of changes over the years that have watered down the incentives for
EPZ firms and increased the administrative burden of compliance. Changes in EPZ legislation through various
Finance Bills introduced the following amendments:
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Exclusion of commercial activities from the income tax holidays and disallowing parallel commercial and
manufacturing activities by a single enterprise;
Disallowing any local sales by EPZ commercial enterprises
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Commercial EPZ activities being licensed only after consultation with the Commissioner General, Kenya
Revenue Authority;
Imposition of mandatory 2.5% duty surcharge on EPZ goods sold to the domestic market as well as the
requirement that these sales be subject to approval by the minister (Cabinet Secretary) responsible for
Industry; and
Introduction of a claim system for previously duty exempt petroleum fuels for EPZ firms.
These changes have resulted in a gradual erosion of the incentives that were offered under the EPZ program.
Special Economic Zone Bill
The Special Economic Zone policy was developed by the government to promote desirable economic activities in
areas demarcated as Special Economic Zones. The policy proposed a wider range of activities than those provided in
the EPZ Act, and provided for different SEZ schemes with a commensurate policy framework to support those
schemes; and greater access to local and regional markets. The policy also proposed to repeal the Export Processing
Zones Act and replace it with the Special Economic Zones Act with the transformation of EPZ program into Special
Economic Zones program.
Regional Industrialization policy & legislation
Local and regional policies and laws such as the Kenya Industrialization policy already described above, and the
EAC Industrialization Policy focus on addressing the challenges by industries in the region. Regional policy also
focuses on opening the region’s markets to partner states. Relevant aspects of legislation the East African
Community that will promote EPZ firms include commitments to support:
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Enhanced capacity to design industrial policy and to formulate, implement and monitor such policy at national
and regional levels;
Diversification of the manufacturing base and raising local value added content (LVAC) of manufactured
exports to at least 40% by 2032 from the currently estimated value of 8.62%;
Measures insituted to increase export of locally manufactured goods
Strengthening of R&D, technology and innovation capabilities to support structural transformation of the
manufacturing sector;
Enhanced product (manufacturing) quality and certification leading to product conformity to regional and
international standards; and
The guiding principles and core values of Kenya’s national industrialization policy include: productivity and
competitiveness, market development, high value addition and diversification, regional dispersion; technology and
innovation, fair trade practices, growth and graduation of MSMEs; employment creation, environmental
sustainability, compliance with the new constitution, education and manpower development. The policy’s goals
include:
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Strengthening local production capacity;
Raising the share of Kenyan products in the regional market;
Developing niche products;
Increasing the share of Foreign Direct Investment in the industrial sector;
Increasing the share of locally produced industrial components;
Establishing an Industrial Development Fund; and
Increase the local content of locally manufactured goods for export.
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Protocol on the establishment of the East Africa Community Customs Union
The establishment of the EAC Customs Union and later on the Common Market, are governed by this Protocol. The
Protocol on the establishment of the Customs Union placed a 20% limit on sales by of EPZ and other export
promotion schemes vide Article 25 of the Protocol. This means that when the Single Customs Territory provisions
are fully implemented, EPZ firms may sell only 20% of annual production to the new local market consisting of 5
partner states. This has effectively shrunk the local or regional market for EPZ firms, making establishment in Kenya
for regional sales, unattractive. A number of Kenyan firms have closed down or are closing down as a result.
AGOA
The apparel sector contributes more than 50% of exports and generates close to 80% of employment within the
zone. The current extension of the “third country fabric provision” which is to expire in September 2015, requiring
Kenya to lobby for further renewal of the extension for the benefit of Kenya’s apparel exporters to the USA under
the African Growth and Opportunity Act (AGOA).At the same time in order to meet the raw material requirements of
textile manufacturers and to ensure sustainability of the apparel export program, the country will need to fast track
the adequate supply of fabric from within the regional market
Kenya’s traditional export trade partners are primarily the UK, Netherlands, Uganda, Tanzania, United States and
Pakistan. Kenya’s main exports are tea, fresh cut flowers, refined petroleum oils, unroasted coffee and legumes. The
Export Processing Zone contributed 8.84 percent of national exports in 2013
The bulk of these exports are of textile and apparels and the U. S. is the main destination. The EPZ program is highly
dependent on AGOA which opened up the US market to goods from eligible Sub-Saharan African countries eligible
to participate under an enhanced Generalised Systems of Preference (GSP) program. During 2013, 56.4 % of all
exports were consigned to USA market out of which 96.6% constituted exports of garment products. Europe
accounted for 13.6 % (Ksh 6,046 million) of the export market, EAC 3.6% (Ksh 1,590 million), Asia 7.0 % (Ksh 3,103
million), and COMESA 8.7 %( Ksh 3,884 million), Rest of Africa 5.3 %( Ksh 2,337 million), Far East 0.8 %( Ksh 365
million) and 0.7% (Ksh 308 million) was destined to the rest of the world. During the previous year, Europe
accounted for 18.9% (Ksh 7,548 million), EAC 7.7% (Ksh 3,057 million), Asia 5.9% (Ksh 2,352 million), COMESA
5.1% (Ksh 2,029 million), Rest of Africa 7.3% (Ksh 2,899 million), Far East 0.6% (Ksh 243 million) and 0.1 % (Ksh
34 million) to the rest of the world.
Figure 4: Export Destinations for Kenya and EPZ Program (2012 / 2013)
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Kenya Export Destinations 2012
Rest of
Africa
13%
Far East &
Australia
6%
Middle
East
12%
European
Union
23%
USA
5%
COMESA
36%
Rest of
Europe
Other
4%
countries
1%
Below is a comparison of Kenya’s top ten exports and the top ten export products under the EPZ
program.
Table 2: Top 10 export products for Kenya and the EPZ Program 2013
Top 10 Kenya Exports
Top 10 EPZA Exports
1
Tea
Garments
2
Horticulture
Agro-Processing
3
Apparel
Minerals / Metals / Gemstones
4
Coffee
Services
5
Iron and Steel
Relief Supplies
6
Tobacco products
Electricals
7
Essential Oils
Dart-Boards
8
Articles of Plastics
Printed items
9
Soda Ash
Plastic goods
10
Leather
Pharmaceuticals
A majority of the exports, especially to the European Union are of unprocessed goods, such as flowers or tea and
coffee. It is apparent that EPZ firms are engaged in non-traditional exports of value added goods, including clothing
which is Kenya’s third largest merchandise export. The potential for expanded investment and exports by the EPZ
sector, particularly in textile fabric and accessory production, in agro-processing value addition and export of
services is immense. In particular:

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
Exports of non processed goods- key exports such as tea and coffee and flowers are exported to the EU
unprocessed. EPZA will need to support firms that can add value to these products under the EPZ program,
There is a captive market for high quality, moderate cost, textile fabrics to supply the existing export oriented
apparel sector which buys over US$ 200 million worth of fabric and accesories from Asia every year.
The potential market presented by the Economic Partnership Agreement between EAC including Kenya and the
28-nation EU region is immense and has not been fully exploited. Duty free access to apparel goods made in
Kenya is granted under the EPA, even for clothing made out of fabric sourced outside African Caribbean and
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Pacific countries and outside EU states. The EPA trade agreement is expected to be concluded during the
strategic plan period.
The range of products allowed preferential market entry the US under AGOA exceeds 6,000 or which only a few
have been exported from Kenya
3.7. Competitors
As shown above, Kenya’s key markets are regional countries like Uganda and Tanzania, the European Union and the
US under AGOA. Key competitors for the Kenya EPZ program under AGOA are Lesotho and Mauritius. Emerging
competitors include Ethiopia which is aggressively attracting textile value chain investment and Madagascar which
has recently replaced Swaziland as an AGOA-eligible exporter to the USA market. Cumulative figures indicate that in
2013 Kenya surpassed Lesotho in units sold to the USA and has emerged as the largest textile exporter under AGOA.
In August 2012, legislation was enacted to extend AGOA’s important third country fabric provision to 2015. Thirtynine Sub-Saharan African countries currently qualify for AGOA benefits. Overall regional trade under AGOA also
increased significantly in 2011 and 2012. Statistics for key Kenyan competitors are listed below:
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Kenya:Kenya was the United States' 92nd largest supplier of goods imports in 2013. U.S. goods imports from
Kenya totaled $451 million in 2013, a 15.7% increase ($61 million) from 2012, and up 81% from 2003. The five
largest import categories in 2013 were: Knit Apparel ($160 million), Woven Apparel ($148 million), Spices,
Coffee, and Tea (coffee) ($39 million), Edible Fruit and Nuts (macadamia nuts) ($29 million), and Electrical
Machinery ($22 million). U.S. imports of agricultural products from Kenya totaled $90 million in 2013. Leading
categories include: coffee (unroasted) ($33 million), and tree nuts ($30 million). Nuts ($31 million).
Lesotho: Lesotho was the United States' 101st largest supplier of goods imports in 2013. U.S. goods imports
from Lesotho totaled $359 million in 2013, a 15.6% increase from 2012. The top import categories (2-digit HS)
for 2013 were: Knit Apparel ($211 million) and Woven Apparel ($110 million). These two categories
represented 90% of total imports from Lesotho. The U.S. goods trade deficit with Lesotho was $359 million in
2013, a 21.8% increase from 2012.
Swaziland was the United States' 136th largest supplier of goods imports in 2013. U.S. goods imports from
Swaziland totaled $59 million in 2013, an 11.6% decrease from 2012. The top import categories (2-digit HS) for
2013 were: Knit Apparel ($30 million), Woven Apparel ($20 million), and Prep Vegetables/Fruit ($5 million).
The U.S. goods trade deficit with Swaziland was $36 million in 2013, 35.8% more than in 2012.However
Swazilands status has been withdrawn effective January 1st 2015.
Mauritius:Mauritius was the United States' 102nd largest supplier of goods imports in 2013.U.S. goods imports
from Mauritius totaled $339 million in 2013, a 30.1% increase ($78 million) from 2012. The five largest import
categories in 2013 were: Woven Apparel ($171 million), Precious Stones (diamonds) ($71 million), Prepared
Meat and Fish (tuna) ($43 million), Knit Apparel ($20 million), and Live Animals ($8 million). U.S. agricultural
imports in 2013 from Mauritius were $7 million.
Madagascar:Madagascar was the United States' 112th largest supplier of goods imports in 2013.
U.S. goods imports from Madagascar totaled $180 million in 2013, a 63.6% increase from 2012.
The top import categories for 2013 were: Nickel ($50 million), Coffee ($50 million), Special Classification
Provisions ($18 million).The U.S. goods trade deficit with Madagascar was $116million in 2013, a 153.8%
increase from 2012.Madagascar is a low cost,high productivity centre of apparel production, and before the US
Government removed Madagascar from the list of eligible countries in 2009 following a coup, Madagascar was a
major exporter to the USA, in some years beingsecond only to Lesotho. Much of the apparel related investment
came from producers in Mauritius looking for a lower cost location. Madagascar status has since been reinstated
after successful election in 2013.
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
Ethiopia: Ethiopia is currently the United States 101st largest trading goods partner with with $872 million in
total (two way) goods trade during 2013. Goods exports totaled $678 million. The U.S. goods trade surplus with
Ethiopia was $485 million. Ethiopia was the United States' 111th largest supplier of goods imports in 2013. U.S.
goods imports from Ethiopia totaled $194 million in 2013, a 5.7% increase ($10 million) from 2012.The five
largest import categories in 2013 were: Spices, Coffee and Tea (coffee) ($80 million), Special Other (returns)
($52 million), Miscellaneous Grain, Seed, and Fruit (nigerseeds) ($22 million), Footwear ($19 million), and Knit
Apparel ($8 million).U.S. imports of agricultural products from Ethiopia totaled $107 million in 2013. Leading
category include: coffee (unroasted) ($80 million).
Rank
Total goods Millions
Knit Apparel
Woven Apparel
Electric Machinery
Precious Stones
Agricultural Imports
Prepared Meat &
Fish (Tuna)
Live Animals
(primates)
Spices. Coffee & Tea
Edible fruits and
nuts
Prepared vegetable /
Fruits
Special Other
Miscellaneous grain,
seed, fruit
Footwear
Table 3: African Exports under AGOA in $ Millions 2013
Kenya
Lesotho
Swaziland
Madagascar
Mauritius
2013
92
101
136
112
102
451
359
59
180
160
211
30
20
148
110
20
171
22
71
90
43
Ethiopia
8
8
39
29
50
80
5
52
22
19
Kenya is involved in the export of 7 out of 19 of the products exported under AGOA by its key competitors under the
AGOA program. A business case can be made for the inclusion of the remaining 12 products under the EPZ program.
However with the preferential access under AGOA set to come up for extension in 2015, EPZA should lobby to
ensure that access is further extended, while at the same time supporting diversification of investment to other
sectors and expand exports to other markets, while putting in place measures to ensure backward integration of the
textile value chain with enhanced fabric production and increased production of ginned cotton.
Another key trend in the global trading landscape is the proliferation of bilateral and regional trade agreements
including the proposal to establish a Tripartite Free Trade Area between the member states of COMESA, EAC and
SADC. The simultaneous pursuit of regional integration and economic zone development presents potential
synergies to be exploited by partner states. Special economic zones and EPZs can be used to promote regional
industrialization and to facilitate regional economies of scale in production and integration and promotion of
regional value chains sourcing local products for global export. However, the rules should be careful not to exclude
originating EPZ or SEZ goods from accessing the expanded regional market. New zones in the region should focus
not only on access to major ports but should also benefit from proximity to designated transport corridors and
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from the major infrastructure initiatives along the North – South Transport Corridor linking Southern Africa to
North Africa through Eastern Africa, and Egypt.
3.8. Microeconomic Environment
3.8.1.
Stakeholder Analysis
Numerous stakeholder interviews were held in the course of formulating the strategy, with interviews being geared
towards capturing views and opinions of the key institutions and individuals with whom EPZA interacts, with the
aim of understanding EPZA’s operating environment. The broad category of stakeholders included customers (EPZA
firms), policy makers, and potential customers among others. The management team and the board members were
also interviewed. The key areas focused on during the interviews included:
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Clarification of EPZA’s mandate(s);
Areas of support and collaboration with EPZA;
Role of EPZA in manufacturing sector & in Kenya’s industrialization ;
Identifying internal strengths which EPZA can build on;
Identifying internal weaknesses which need mitigation and solutions;
Identifying opportunities that EPZA can seize;
Identifying threats and challenges that may inhibit EPZA in achieving its mandates;
Quality of products and services; price competitiveness and potential competitors;
Areas of improvement and recommendations; and
Potential EPZA “to-be” core and complementary products and potential customers.
The key outcomes of the stakeholder analysis identified as influencing EPZA’s strategic direction were the need to:
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Establish viable sources of income generation, other than the Government of Kenya;
Facilitate access to regional markets;
Develop a new marketing and communication strategy;
Develop or support development of infrastructural facilities for the EPZ enterprises such as provision of
serviced land, facilitation of transport facilities and cheaper sources of raw materials & energy;
Embrace technology in EPZA’s operations;
Diversify EPZ export markets, investment sectors ; and
Establish a true one stop shop.
3.8.2.
SWOT Analysis
Following interviews with key stakeholders, the SWOT analysis was developed. The strengths and weaknesses are
directly related to EPZA’s internal environment and the opportunities and threats are related to the external
environment. This section highlights EPZA & EPZ program strengths, weaknesses, opportunities, and threats.
Table 4: EPZA and EPZ Program SWOT Analysis
EPZA & EPZ Program SWOT
Strengths
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Empowering legal Instrument – powerful EPZ Act;
Well qualified staff, capable, exposed and experienced in operating an export
promotion program;
Diverse constitution of EPZA board;
Supportive and involved EPZA board;
Presence of strategic partnerships;
Advantaged position to support SEZs;
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Weaknesses
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Opportunities
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EPZ program incentives anchored in law;
Infrastructure and land available as source of income generation and for investment
facilitation;
Historically, adequate Government policy support; and
Good track record/experience in certain markets, particularly in agro-processing and
textiles.
Lack of an effective marketing strategy;
Inadequate focus on research and development initiatives;
Inefficient business processes;
Inadequate IT systems to enhance business processes esp. documentation, process
flow management;
Lack of adequate specialised skills and “young blood” amongst the EPZA employees;
Decreased ability to influence policy changes which negatively impacts the program;
Disconnected from business and policy nerve centres due to distance (location);
Poor public image and low awareness of EPZA and its role;
Financial challenges – high level of debt owed to authority, leading to cash flow
problems;
Internal staffing challenges, sub-optimal establishment, restructuring, need for
increased team work;
Staff de-motivated due to stagnant career development;
Absence of a One Stop Shop (OSS); and
Insufficient funding for key activities such as marketing.
Renewed interest in Kenya as an investment destination due to positive political
climate;
Presence of willing partners such as KenInvest to create an effective one stop shop;
Consitutional reforms through introduction of county governments;
Continuation of AGOA Market access to 2015 and possibility of extension and
permanence;
Special Economic Zones Bill becoming an Act;
Presence of skilled human capital in Kenya’s economy;
Discovery of new resources and investments opportunities in Kenya e.g. oil, gas and
water;
Stabilization of Somaliland and South Sudan hence increased markets for Kenya’s
exports;
Rising labour costs and pollution in China - great interest in Africa as last investment
frontier;
Improvements in public infrastructure and large capital projects;
Improvements in cost of doing business – port clearance, transit time;
Clear roadmap for EPZ/SEZ related projects stated in Kenya’s Vision 2030;
Emergence of Kenya as Africa innovation capital;
Dismantling of incentive regimes such as the Tax Remission for Export Office (TREO)
and expansion of export activities required to pay VAT in the domestic market.
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Threats
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

3.8.3.
Kenya’s rising GNP per capita that could potentially raise issues with the WTO
concerning the export incentives offered in Kenya’s EPZ program;
Possibility of the EAC-type local market definition and market access restrictions for
EPZ goods in the COMESA region;
Competition from other SEZ/EPZ/non-EPZ locations including Ethiopia, Tanzania,
Uganda, Egypt , Vietnam, as destinations for investment;
Rising insecurity concerns in Kenya and the region, including terrorisim;
Kenya poor rating in the ease of doing business;
Rise in the cost doing business in Kenya;
Global economic crisis negatively affecting FDI;
Perception of high levels of corruption;
Reduction in funding by GOK.
Uncertainty over extension of AGOA third country fabric sourcing beyong 2015,
Uncertainty over completion of EU-EAC EPA negotiations where other competing
Eastern African Countries already have “Everything but Arms” status in trade with EU
Financial Performance Overview
Financial performance is reflected in the organization’s return on assets, and return on investment value added.
Three key indicators in EPZA’s financial performance have been analysed which include, Income, expenses, and
infrastructure performance.
3.8.3.1.
Income
EPZA’s income consists of income from various sources such as operating income, investment income
and other income. Government grants to EPZA for recurrent expenditure, have been on the decline and as per new
guidelines, all state agencies should achieve financial sustainability to reduce the burden on the exchequer. EPZA
currently relies partially on government to maintain its routine operations and to fund recurrent expenditure and
development.
The rising and falling trend in income during period 2008/09 to 2012/13 could be attributed to: a consistent
increase in income through complimentary products such as income from rental and water & sewerage services,
and a decrease due to cuts in government grants and the adverse impact of the global financial crisis experienced by
USA in 2009/10 and by the European Union in 2012/13.
EXPORT PROCESSING ZONES AUTHORITY
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Figure 5: EPZA Income (2008/2009 –2012/2013)
400
350
KSh, million
300
250
200
150
100
50
0
2008/09
2009/10
2010/11
2011/12
2012/13
Total Income
325.617
310.539
356.008
367.278
332.348
Operating Income (Application Fees,
License Fees & Rental Income)
70.995
89.372
105.406
93.182
127.967
Investment Income
5.396
11.661
10.427
32.655
19.852
249.226
209.507
240.175
241.441
184.529
Other Income (Government Grants,
Exchange Gain, Miscalleneous
Income & Contribution)
As shown in figure 6, for the period 2008/09 to 2012/13, the highest income generating product for EPZA is the
water and sewerage services that are offered to EPZ firms as well as businesses and private consumers in the Athi
River area. It is important to note that complementary products (rental, lease and water &sewerage services)
contribute a higher share to the total EPZA revenue bucket than the core products (licenses).
Figure 6: Income per Product (2008/2009-2012/2013)
90
80
70
KSh, million
60
50
40
30
20
10
0
2008-09
2009-10
2010-11
2011-12
2012-13
Licenses
20.880
19.531
23.540
23.403
25.113
Building for Rental
21.413
35.504
36.506
25.091
41.329
Land for Lease
22.229
25.476
33.888
34.758
48.799
Water & Sewarage Services
72.805
74.697
47.888
84.806
71.226
Others
1.171
0.865
0.818
0.796
1.468
EXPORT PROCESSING ZONES AUTHORITY
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3.8.3.1.
Expenses
EPZA expenses have increased by an average of 3% CAGR for the review period with overall growth being 15.95 %
for the period. The increase in expenditure was for administrative and in other operating expenses with a 14% and
21% increase respectively over the entire period. Maintenance expenses decreased by 26.8% in 2012/13 compared
to 2011/12.
Figure 7: EPZA Expenses (2008/2009 – 2012/2013)
400
350
KSh, million
300
250
200
150
100
50
0
2008-09
2009-10
2010-11
2011-12
2012-13
Total Expenses
288.619
281.422
303.067
371.332
334.646
Adminstrative Expenses
172.723
174.617
182.762
196.628
196.346
Mainteinance Expenses
Other Operating Expenses
3.8.3.2.
6.319
9.585
3.854
7.785
5.701
109.577
97.220
116.451
166.919
132.699
Infrastructure
Infrastructure for the EPZ program as manifested by gazetted zones has been increasing consistently for the period
covering 2008 to 2013 as highlighted in figure 8 due to increased business development initiatives accompanied by
positive trends recorded in Kenyan economy. By December 2013, there were 50 designated zones, up from 47 in
2012 up from 38 in 2008.
Figure 8: EPZ Gazetted Zones (2008 – 2013)
Gazetted Zones (no.)
50
40
30
20
10
0
Gazetted Zones
2008
2009
2010
2011
2012
2013
38
41
42
45
47
50
EXPORT PROCESSING ZONES AUTHORITY
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Figure 9: Geographical distribution of Zones by county, 2013
Nandi, 1
Uasin Gishu, 1
Meru, 1
Bomet, 1
Laikipia, 1
Elgeyo Marakwet, 1
Murang'a, 1
Taita Taveta, 1
Kajiado, 1
Mombasa, 21
Kiambu, 2
Machakos, 4
Kilifi, 6
Nairobi, 8
3.8.3.3.
Investor Attraction and Retention
The total number of EPZ enterprises has been relatively steady despite a considerable number of projects being
approved and licensed. This can be attributed to consistent attrition of enterprises from export processing zones
due to following reasons:






Some licenced enterprises not becoming operational in the defined timeframe
“Wait and see” attitude of investors before the 2013 general elections
Lack of facilitating customs procedures for some key activities such as film production liaison services
Enterprises opting out of EPZ program after tax holiday period is over
Introduction of new restrictions in sales fo EAC domestic market where EPZ enterprises are not allowed to sell
more than 20% of their production to the entire EAC market
Increased cost of operation in Kenya compared with other East African countries such as Ethiopia, who offer
better infrastructure and reduced cost of operation (cheaper electricity and land) to attract investors
EXPORT PROCESSING ZONES AUTHORITY
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Figure 10: EPZ Investor Attraction and Retention (2008 – 2013)
3.8.4.
EPZ Program Performance Overview
300
250
200
150
100
50
0
2008
2009
2010
2011
2012
2013
Enterprises Operating
77
83
75
79
82
85
Projects Approved
24
21
19
28
20
21
Investor Enquires
218
162
229
240
117
150
3.8.4.1.
Employment
Expansion of employment in EPZ sector fell below targets for strategic plan period 2008-2013. However some
significant increase in employment has been witnessed in 2012 and 2013 (see figure 11).
The lower than expected employment may be attributed to some attrition of enterprises in the textile industry
which has been the biggest EPZ employment contributor, due to uncertainties about market access to USA,
increasing operating costs and concerns about lack of textile factories to supply “just in time” fabrics .However, the
remaining garment producers have expanded greatly. Moreover, the count of expatriates employed under EPZ
program has also reduced, due to challenges in obtaining work permits.
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Figure 11: EPZ Program Employment (2008 – 2013)
Employees
45,000
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
2008
2009
2010
2011
2012
2013
Total Employment
30,658
30,623
31,502
32,464
35,929
40,433
Kenyans Employed
30,187
30,115
31,026
32,043
35,501
39,961
471
508
476
421
428
472
Expatriates Employed
3.8.4.2.
Trade Balance
EPZ exports grew sharply in year 2011 as highlighted in figure 12. However, EPZ program trade balance remained
relatively stable showing high dependence on raw material imports. In the textile and apparel sector, the largest
contributor to the EPZ program, and as alluded to in the previous section, only 17% of total raw materials
consumed are procured from local sources, hence a strong correlation between export and import values. The
decrease in 2009 is attributed to the dependence of the program on the US market, and hence the effect of the 2009
financial crisise3 in the US, a key importer of Kenya’s export products, particularly through the AGOA program.
Figure 12: EPZ Program Trade Balance (2008 – 2013)
50,000
45,000
40,000
KSh, million
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
2008
2009
2010
2011
2012
2013
Exports
28,094
23,948
28,998
39,067
39,962
44,427
Imports
16,348
12,672
16,518
21,443
24,973
27,413
3.8.4.3.
Contribution to Total Export, Employment and GDP
The EPZ program’s contribution to Kenya’s total exports and the GDP dropped in 2009 but has consistently
improved in following years.
EXPORT PROCESSING ZONES AUTHORITY
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The marginal decrease in EPZ contribution to Kenya’s national employment is attributed to the increasing cost of
employment in the country and exodus of some textile & apparel sector companies.
EPZ contribution to GDP had risen from 1.13% in 009 to 1.39% in 2011, dropping to 1.32% in 2013.
Table 5: Contribution to Total Export, Employment and GDP (2008 – 2013)
Indicator
2009
2010
2011
2012
2013
(rebased)
EPZ contribution to total Kenya exports
(%)
6.94
7.08
7.64
7.72
8.84
EPZ contribution to total national
employment (%)
0.29
0.29
0.28
0.28
0.30
EPZ contribution to GDP; constant prices
(%)
1.13
1.26
1.39
1.30
1.32
3.8.4.4.
Exports by sector
The garments, agro-processing and services sectors have consistently been the top 3 highest export contributing
sectors for the period covering 2008 to 2013 as highlighted in Table 6. The success of the garments sector in EPZ
has primarily been driven by the AGOA program and the incentives offered to the garments industry. For the EPZs,
agro-processing exports have increased from 8.3% of total EPZ exports to in 2008 to 17% in 2013 while apparel has
increased marginally from 56.9% in 2008 to 59.4% in 2013.
The EPZ agro-processing sector has successfully diversified and expanded to European markets decreasing
dependence on the AGOA program. Agricultural products have always been central to Kenya's export trade with
horticulture and tea being the most important merchandise exports. The service sector across the world is the
fastest growing contributor to the world economy accounting for nearly 20% of the world global trade. Though
traditionally Kenya’s export base is mainly from primary agricultural products, steady growth in service industry in
Kenya has seen service sector contributing close to 60% to country’s GDP, showing potential for growth in future.
Table 6: Exports by sector (2008 – 2013)
Sectors
Exports per sector – percentage contribution
2008
2009
2010
2011
2012
2013
Agro processing
8.3%
11.6%
13.7%
13.1%
15.9%
17.00%
Beverage / spirits
0.3%
0.7%
1.0%
0.9%
0.9%
0.59%
Chemicals
7.6%
1.0%
0.0%
0.0%
0.1%
0.12%
Dartboard
1.7%
2.1%
1.7%
1.3%
1.5%
1.66%
Electricals
4.7%
4.5%
2.5%
4.2%
6.9%
1.86%
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Food processing
1.8%
1.8%
1.1%
0.7%
1.0%
0.76%
Garments
56.9%
53.1%
56.2%
54.6%
53.1%
59.40%
Garments support services
0.0%
0.0%
0.0%
0.1%
0.0%
0.00%
Minerals/metals/gemstones
0.0%
0.0%
2.5%
9.7%
8.2%
6.65%
Pharmaceuticals & medical
supplies
2.0%
0.7%
1.1%
1.1%
1.0%
0.97%
Plastics
0.9%
0.3%
0.9%
0.8%
1.0%
1.47%
Printing
7.5%
7.2%
3.0%
3.0%
1.5%
1.54%
Relief supplies
1.6%
2.8%
3.0%
1.7%
2.5%
2.08%
Services
6.2%
13.6%
12.8%
8.6%
6.4%
5.90%
Spinning
0.4%
0.4%
0.5%
0.2%
0.0%
0.00%
Other inc. Commercial crafts
0.1%
0.2%
0.1%
0.1%
0.0%
0.60%
Total exports in Ksh millions
28,094.4
23,989.6
28,998.0
39,067.0
39,962.8
44,427.1
During 2013, 56.4% (Ksh 25,056 million) of all exports were consigned to USA market out of which 96.8% (Ksh
24,246 million) constituted exports of garment products. During 2012, 52.4 % (Ksh 20,935million) of all exports
were consigned to USA market out of which 96.6% (Ksh 20,217 million) constituted exports of garment products. In
the year 2011, 54.7% (Ksh 21,371 million) was exported to US out of which 98.0% was garment exports. The
highest growth sectors were minerals/ metals / gemstones and agro- processing with contribution growth rates of
8.17% and 7.53% respectively. The most fluctuation was seen in the services sector which grew from a contribution
of 6.2 in 2008 to 13.57 in 2009 and back down to 6.38% in 2012. In the same period the chemical, printing and
spinning sectors dropped from a contribution of 7.56% to less than 1% in the same period.
3.8.4.5.
Investment by sector
The garments, services and agro-processing sectors have consistently been the highest investment attracting
sectors for the period covering the 2008 to 2013 as highlighted in table 7 below. Mineral/metals/gemstones firms
have recently increased their investment. However average investments have declined significantly in the garments
sector. This has primarily been driven by uncertainly over third party raw material restrictions under AGOA and the
long term viability of Kenya’s participation in the program.
Table 7: Investments by sector (2008 – 2013)
Sectors
Investments by sector – percentage contribution
2008
EXPORT PROCESSING ZONES AUTHORITY
2009
2010
2011
2012
2013
32 | P a g e
Agro processing
8.2%
9.5%
9.8%
13.4%
16.1%
16.80%
Beverage/ spirits
1.0%
1.0%
0.9%
0.9%
0.6%
0.51%
Chemicals
9.5%
13.3%
0.0%
0.0%
2.9%
2.36%
Dartboard
3.0%
3.0%
3.0%
2.7%
1.8%
1.48%
Electricals
0.6%
0.5%
2.2%
1.8%
1.2%
0.99%
Food processing
9.0%
12.0%
11.4%
10.6%
5.6%
3.45%
Garments
34.9%
26.0%
29.5%
28.0%
27.9%
28.05%
Garments support services
0.9%
0.9%
0.3%
0.3%
0.2%
0.15%
Minerals/metals/gemstones
0.0%
0.0%
4.9%
4.5%
20.3%
20.20%
Pharmaceuticals & medical
supplies
7.8%
1.7%
6.4%
8.1%
2.7%
7.75%
Plastics
0.5%
1.3%
2.7%
2.8%
3.1%
2.63%
Printing
10.0%
8.9%
9.3%
8.8%
6.2%
5.64%
Relief supplies
0.2%
0.4%
0.5%
2.0%
1.4%
1.08%
Services
8.4%
14.5%
13.0%
10.4%
10.0%
8.79%
Spinning
5.4%
6.3%
6.2%
5.7%
0.0%
0.00%
Other inc. Commercial crafts
0.7%
0.6%
0.1%
0.1%
0.0%
0.03%
Total investments in Ksh
millions
21,700.6
21,506.8
23,563.0
26,468.3
38,534.6
48,004.5
3.8.4.6.
Employment by sector – Local jobs
The garments, agro processing and services sectors have consistently been the top 3 highest employment sectors
for the period covering the 2008 to 2013 as highlighted in table 8 below. This has primarily been driven by the fact
that these sectors are labour intensive.
Table 8: Employment by sector (2008 – 2013)
Sectors
Employment by Sector
2008
EXPORT PROCESSING ZONES AUTHORITY
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2010
2011
2012
2013
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Agro processing
5%
7%
9%
8%
11%
8.9%
Beverage/ spirits
0%
0%
0%
0%
1%
0.51%
Chemicals
1%
1%
0%
0%
0%
0.21%
Dartboard
1%
1%
1%
1%
1%
0.78%
Electricals
1%
0%
0%
0%
0%
0.04%
Food processing
1%
1%
1%
1%
1%
0.37%
Garments
85%
81%
78%
79%
80%
82.41%
Garments support services
0%
0%
0%
0%
0%
0.06%
Minerals/metals/gemstones
0%
0%
0%
1%
1%
0.89%
Pharmaceuticals & medical
supplies
1%
0%
1%
1%
1%
0.75%
Plastics
0%
0%
1%
1%
1%
1.01%
Printing
1%
1%
1%
1%
1%
0.70%
Relief supplies
0%
0%
0%
0%
0%
0.20%
Services
3%
6%
6%
5%
2%
3.04%
Spinning
1%
1%
1%
1%
0%
0.00%
Other inc. Commercial crafts
0%
1%
0%
0%
0%
0.05%
Total number of employees
30,187
30,115
31,026
32,043
36,131
39,961
3.8.4.7.
Local resource consumption by sector
The garments, agro processing and services sectors have consistently been the top 3 highest consumers of local
resources for the period covering the 2008 to 2013 as highlighted in table 9 below. This has primarily been driven
by ready source of raw materials in the case of agro-processing and the access to labour in the case of services and
garments. The largest decline in the use of local resources was in the chemicals sector dropping by 13.2% followed
by the garments sector with a decline of 4.87% contribution. The agro- processing sector and minerals /metals /
gemstones continued to show the highest growth in the consumption of local resources.
Table 9: Local resources use by sector (2008 – 2013)
Sectors
2008
EXPORT PROCESSING ZONES AUTHORITY
2009
2010
2011
2012
2013
34 | P a g e
Agro processing
14.2%
21.5%
25.4%
26.5%
29.2%
32.90%
Beverage/ spirits
0.6%
0.9%
1.0%
1.5%
1.4%
1.26%
Chemicals
13.6%
4.0%
0.0%
0.0%
0.3%
0.32%
Dartboard
1.2%
1.3%
1.2%
1.2%
1.0%
1.24%
Electricals
0.6%
0.3%
0.1%
0.1%
0.1%
0.11%
Food processing
6.8%
4.6%
3.7%
3.4%
3.1%
1.18%
Garments
35.4%
30.1%
30.2%
30.9%
30.6%
34.63%
Garments support services
0.3%
0.3%
0.1%
0.1%
0.1%
0.07%
Minerals/metals/gemstones
0.0%
0.0%
9.4%
18.4%
17.1%
15.22%
Pharmaceuticals & medical
supplies
2.3%
0.7%
1.0%
1.4%
1.2%
1.23%
Plastics
0.3%
0.5%
1.0%
1.2%
2.1%
1.77%
Printing
7.3%
5.0%
3.3%
3.7%
5.1%
3.44%
Relief supplies
2.3%
3.5%
2.6%
3.8%
1.9%
1.64%
Services
14.5%
26.4%
20.0%
6.5%
6.6%
4.99%
Spinning
0.5%
0.7%
0.8%
1.1%
0.0%
0.00%
Other
0.1%
0.1%
0.2%
0.1%
0.0%
0.01%
Total resources in Ksh
millions
11,365.2
11,032.2
13,287.3
14,921.2
18,096.6
19,275.1
3.8.4.8.
Number of firms by sector
The garments, agro processing and services sectors have consistently been the top 3 highest employment sectors
for the period covering the 2008 to 2013 as highlighted in table 10 below. This has primarily been driven by factors
attributed to above.
Table 10: Number of firms by sector (2008 – 2013)
Sectors
2008
2009
2010
2011
2012
2013
Agro processing
12%
13%
15%
20%
22%
24.71%
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35 | P a g e
Beverage/ spirits
3%
2%
3%
4%
4%
3.53%
Chemicals
6%
5%
0%
0%
1%
1.18%
Dartboard
1%
1%
1%
1%
1%
1.18%
Electricals
5%
6%
7%
4%
4%
1.18%
Food processing
3%
4%
5%
5%
4%
3.53%
Garments
23%
23%
21%
23%
27%
25.88%
Garments support services
13%
12%
8%
9%
6%
4.71%
Minerals/metals/gemstones
0%
0%
5%
5%
5%
4.71%
Pharmaceuticals & medical
supplies
5%
4%
5%
4%
2%
3.53
Plastics
4%
2%
5%
5%
6%
5.88%
Printing
3%
1%
1%
1%
1%
1.18%
Relief supplies
1%
2%
3%
4%
2%
2.35%
Services
14%
16%
15%
11%
12%
11.76%
Spinning
1%
1%
1%
1%
0%
0.00%
Other inc. Commercial
crafts
5%
7%
4%
3%
2%
3.53%
Total firms in the EPZ
program
77
83
75
79
82
85
4. EPZA Strategic Direction 2014-19
In developing EPZA’s 2014 – 2019 strategic direction which includes EPZA’s vision, mission, core values, strategic
pillars, objectives and tag line, a review of EPZ program background, situational analysis were taken into
consideration. The reason for the aforementioned analysis is to understand the EPZ Program and EPZA’s current
position, in order to map out its future position. The figure 13 below illustrates an overview of EPZA’s 2014 – 2019
strategic direction with explanatory notes in the subsequent pages.
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Figure 13: EPZA strategic Planning Process
The strategic planning process as shown in Figure 13, above involves a process of assessing where EPZA is today
(review of past performance), what is possible, what feasible (strategic results) is and then finally how EPZA will get
there. (The strategic objectives and initiatives, all summarised in the balanced score card implementation matrix
attached as Appendix 1).
The first step in the formulation of strategy was the strategic organisational assessment which combines the SWOT
and PESTEL analysis to derive enablers and pains. This is shown graphically in Figure 14 below.
EXPORT PROCESSING ZONES AUTHORITY
37 | P a g e
Figure 14. Strategic Organisational Assessment
Customer Value Proposition
The value an organization intends to create for its customers and stakeholders is normally referred to as the
Customer Value Proposition (CVP). A CVP articulates the net benefit a customer derives from using the
organization’s products or services; it is the experience of the customer as a result of interacting with the company
and its product and services.
EPZA CVP summary: EPZA: a caring, effective business enabler who makes investments happen
Primary Customers: EPZ Investors
Secondary Customers: Consumers of non-core EPZ Products, water consumers, Information seekers
Key Stakeholders: Government of Kenya, communities where EPZs are located, EPZ sector employees
Attributes: EPZA delivers affordable, accessible packages of complete, customized solutions for investing exporters
and other customers in a quick, efficient and responsive manner, using sector specialized, customer focused
expertise.
Relationship: EPZA engages with its customers in a welcoming, friendly, professional way and is an actively
engaged listening partner. Customers interact with EPZA through several touch points but each relationship is
managed by a key account relationship manager assigned to each investor. EPZA has a strong customer service
ethic.
Emotional appeal/brand/image: EPZA is positioned as a market leader in its field, serving as an effective, key
economic change agent for Kenya. EPZA seeks to be well known and recognized as a good corporate citizen.
4.1. Vision
EPZA’s vision is the future ideal state that it wants to achieve. EPZA’s vision for 2014 – 2019 is:
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“To Be the Leading, globally competitive Agency for the Promotion of Export Oriented Investments and Trade”
The EPZA is a public agency, and thus in developing its vision for 2014 – 2019 the primary driver of its vision is
Government of Kenya’s and the Ministry of Industrialisation and Enterprise Development’s strategic direction as
stipulated in Kenya’s Vision in 2030, Kenya’s Second Medium Term Plan (2013 – 2017) and Kenya’s
Industrialisation Policy. Additionally, EPZA’s vision for 2014 – 2019 was articulated by its key stakeholders who
included its Board of Directors, EPZA employees and the EPZ enterprises (current and potential).
EPZA’s vision for 2014 – 2019 captures the key purpose of EPZA which is export promotion. Additionally given the
fact that there are various players in Kenya’s export sector and other export processing zone competitors
internationally, EPZA will aim to the leading player amongst all these players, in investment attraction for export, by
ensuring it has a highly effective & efficient organisation and by partnering with the best fit partners.
4.2. Mission
Mission is the means through which vision is realized. EPZA’s mission for 2014 – 2019 is:
“To Efficiently Attract and Retain Export Oriented Investments and Trade”
EPZA’s mission for 2014 – 2019 indicates how EPZA will attain its vision. In order to achieve its mission for 2014 –
2019; EPZA will undertake specific strategic initiatives that have been detailed in the “Strategic Initiatives” section
detailed in the succeeding pages.
4.3 Core values
EPZA’s core values are those key standards/beliefs it will adopt in its day to day operations in order to achieve its
mission. EPZA’s core values for 2014 – 2019 are:
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Efficiency: The EPZA board and employees believe organizational efficiency will enable it to provide timely,
high quality solutions to its customers . EPZA will strive to make sure that all its employees are efficient in their
work and efficient systems/tools are deployed to assist them in delivery of EPZA solutions;
Governance: EPZA embraces the principles of good corporate governance at all levels and in all decision
making in the Authority. Accountability, transparency, good stewardship of resources, adherance to the law and
proper exercise of delegated responsibility in the public interest are all valued;
Innovation: EPZA will continuously innovate its products and operations to adapt to its environment.
Additionally, EPZA will continuously research on future trends that will impact its environment and accordingly
innovate products and operations in time to take advantage of those trends;
Integrity: EPZA board, managment and staff will exercise integrity, honesty, fairness and moral probity in all
thier dealings amongst themselves and with the members of the various publics, and will seek to deter, prevent,
expose and punish unethical practices; and
Teamwork: The EPZA board and employees will continue to work together as a team through cultivation of
good working relations within EPZA and with its various stakeholders in order to achieve its mission and
ultimately its vision.
4.4 Strategic Themes
EPZA’s 2014 – 2019 strategic direction is coalesced into 3 key focus areas or strategic themes which support its
2014 – 2019 strategic direction as it strives to realize its vision. EPZA’s strategic themes will be realized through a
number of strategic initiatives each targeted towards implementing specific directions of the strategy. EPZA’s 3
strategic themes are:
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Organisational Excellence: EPZA achieves organisational excellence in order to become and efficient and
effective authority. It will optimise human capital, improve internal business process, engage in product
diversification so as to improve financial performance, increasingly reinvesting in customer attraction and
retention and thus achieving increased business growth and citizen value
Customer Focus: EPZA will attain its purpose through the customers who deliver economic value through
increased investment, resulting in increased foreign exchange earnings, enterprise growth and ultimately GDP
growth and the creation of jobs EPZA will embrace knowledge management and build strategic partnerships to
assist the Authorit to better understand and serve her customers
Brand Positioning: EPZA will use technology and strategic partnerships to engage in policy advocacy to
enhance the policy environment, and to improve the business operating environment, thereby reducing the
cost of doing business. EPZA will live out its brand promise by providing and communicating its superior
services and value adding solutions, positioning Kenya’s EPZs as the best investment location for its target
customers.
4.5 Strategic Outcomes
The EPZA’s corporate objectives for 2014 – 2019 are those high level targets that must be achieved in order for the
EPZA to realize its vision. These corporate objectives have been guided by the EPZ Act, Kenya’s Vision 2030, Kenya’s
Second Medium Term Plan, Kenya Industrialisation Policy and key factors and trends in EPZA’s environment. The
key strategic results from this strategic plan are:
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An effective and efficient Authority
Increased Socio-economic contribution
Improved competitive business environment
EPZA strategic corporate objectives for 2014 -19 are:
 To increase employment in the EPZs to 156,000 by 2019;
 To increase EPZ contribution to GDP to 3% by 2019 (using rebased GDP calculation)
 To diversify the markets, industries and type of EPZ enterprises targeted, attracted and sustained; and
 To be financially self-sufficient on recurrent budget, by 2019.
4.6 Tag Line
The tag line will ensure the alignment and expectations of all its stakeholders with the EPZA’s vision statement and
will also underline its contribution to Kenyan economy through EPZ program. The EPZA’s 2014 – 2019 tag-line is:
“Making Investments Happen”
The graphical summary of the strategy is given in Figure 15 below
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Figure 15: EPZA 2014 – 2019 Strategic Direction
Vision
MAKING INVESTMENTS HAPPEN
To be the leading agency for the
promotion of export oriented
investments and trade
Mission
To efficiently attract and retain export oriented investments
and trade
Customer Value Proposition
Strategic Results
Theme:
Customer Focus
Theme:
Organizational
Excellence
Customer
Perspective
Financial
Stewardship
Internal
Business
Processes
Theme:
Brand Positioning
Effective and Efficient Authority – Increased Socio Economic Contribution – Improved Competitive Business Environment
Core Values
Organizational
Capacity
Teamwork
Efficiency
Innovation
Governance
Integrity
Engaged Leadership – Interactive Communications – Core Values
5.
EPZA Strategy
5.1. Product
The EPZA “As-Is” products are shown in table 11 below and their respective analysis and income values have been
highlighted in the section on Income. In order to achieve sustainability and added value for clients EPZA will extend
their product offering for both core and complementary products.
Table 11: the EPZA “As-Is” and “To-Be” Products
Type of
Product
Core EPZ
Products
As - Is
To - Be
Details
EPZ Developer
Operator Licence
EPZ Developer Operator
Licence
Innovate on new types of zone
facilities to meet tenant needs, and
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EPZ Enterprise
Manufacturing and
Services Licence
EPZ Enterprise
Manufacturing and Services
Licence
EPZ Enterprise
Commercial Licence
EPZ Enterprise Commercial
Licence
Business Service
Permit
Business Service Permit
Business Climate
And Sectoral
Information
Business Climate And
Sectoral Information
Business Incubation
Service
Business Incubation Service
under Export Business
Accelerator
Business Linkage
Services
Business Linkage Services
One stop Shop
Market Facilitation (1)
Market Facilitation (2)
Sector Specific incentives
Complementary
Buildings for rental
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Buildings for rental
provide legislative support for their
roll out where necessary e.g. Textile
city, leather zones with shared waste
water pre-treatment facilities,
dedicated commercial trading zones
Create support frameworks for
desirable manufacturing and service
sector, especially those employing
large numbers of worker.
Enhance access to local market for
certain commercial enterprise sectors
through legislative reform
Expand service list e.g.to provide for
educational institutions to provide
on-site training in EPZs to enhance
EPZ staff capacity and skills
Continuously engage in structured,
customer oriented research and
package results, making them
available to investor, reducing their
research and decision making costs
and time.
Provide additional customerdemanded services including export
market entry, staff training and
product development support for
identified clusters of small and
medium sized EPZ enterprises
Joint ventures and other strategic
partnerships, sourcing and supply
chain development. Co-location of
complementary industries in adjacent
industrial parks.
Effective single one stop window for
information and for processing all
investment related permits and
approvals within defined and
customer friendly timelines.
Migration to virtual one-stop-shop
Enhanced support to EPZ sector to
preserve and enhance access key
export markets through researching,
lobbying and negotiations
Market entry support, including EPZ
exporter trade fairs, product and
service catalogue, seminars,
exhibitions, website and social media
marketing
Incentives tailored to sectors e.g.
special short term work permits for
the film sector support for large
employers’ industrial relations and
collective bargaining, training
incentives for targeted labour
intensive industries.
Develop quick-delivery industrial
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Products
Land for lease
Land for lease
Water and Sewerage
Services
Water and Sewerage Services
Professional support services
Stable and cheaper sources of
electricity
Social Amenities
Transport and Logistics
Services
Financial Products
Technical training
Income
Generation
Opportunities
Grass & Hay
Forestry and agri-business
Trees and Poles
Meeting, conferencing and
training services
building solutions, to provide
completed industrial buildings in
public zones, cost effectively within 4
months of tenant commitment
Differentiated land offerings,
including by location, whether fully
serviced or semi-serviced.
Extended water and sewerage
services to the EPZ -Athi River
environs; new methods of payment,
Linkage of investors with
professionals through referral e.g.
consultants, architects, lawyers,
surveyors, security etc. through
strategic partnerships provided by
the EPZA.
Negotiated power solutions for EPZ
export sectors for more competitive
power costs and through focus on
lower cost, sustainable power
production.
Expansion of service delivery by
social services providers in EPZ
sector for accommodation,
restaurants, entertainment facilities
etc.
Forward linkages with transport
service providers through strategic
partnerships, for lower transport
costs rates.
Strategic partnerships with financial
services sector players for customised
financial products for EPZ enterprises.
Linkage of EPZ firms with training
providers to provide relevant training
services through strategic
partnerships provided by the EPZA
e.g. Regional centre for textiles and
apparel
Harvesting and regeneration of EPZA
tree plantation, market gardening
and production of hay for sale
Utilization of existing facilities and
new custom built facilities at Athi
River zone for meetings, exhibitions,
conferences and training.
5.2. Market
Continuous marketing analysis will be required to keep the EPZA relevant and updates. As identified by numerous
stakeholders, diversification of products and markets is required by the EPZA. As depicted in the diagram below, the
process of bringing a product to market that satisfies the customer’s needs is described in three steps, the situation
analysis, marketing strategy and marketing mix decision.
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Figure 16: The EPZA Marketing Process
5.2.1.
Market Segmentation
The following countries have been identified as target sources of investment and as export markets for EPZ goods,
based on their respective growth rates, imports and availability of resources. However a detailed case study will be
conducted and a priority matrix developed to identify key market potential and to support the growth of both new
and existing EPZ sectors.
Africa: Kenya, South Africa
Middle East: Turkey, UAE
Asia: China, Taiwan, Korea, India, Sri-Lanka, Bangladesh
EU: Germany, UK, France, Benelux
North America: USA
5.2.2.
Sector Segmentation
The following 7 sectors were selected as target sectors based on their potential growth. However sector specific
case studies will be conducted based on strong local fundamentals and the existing environment.
1.
2.
Garments and textiles: The garments sector has traditionally been a major contributor to the EPZ program
due to the benefits enjoyed under AGOA program. With its consistent contribution to the EPZ program, the
garment and related textile sector will continue to be a focus sector for EPZA. Emphasis will be on both firmbased advantages and policy based interventions for preservation and expansion of market access and to
supporting market entry, vertical integration, staff capacity buildings and reduced operating costs. .
Non-food agro-processing: Kenya has traditionally been a major exporter of agricultural related products due
to presence of a suitable climate, large land mass, access to irrigation water and other supporting conditions
EPZA will continue to focus on supporting the growth of value added agro-processing, taking into account its
consistent contribution to the EPZ growth and high global growth rates. Market expansion to the EU and other
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markets will be explored to ensure sustainability. This sector includes products such as essential oils, vegetable
extracts, fibres, biofuels and cosmetic ingredients.
3. Food processing and horticulture: Closely related to the agro-processing sector, the food processing sector
has been growing at a steady rate and is experiencing high growth rates globally. This sector includes processed
tea, value added coffee, nuts, juices, meats, dairy, juices, dried spices, cereals, dried fruits, relief foods, herbs
and other edible goods.
4. Leather and leather goods: leather production and exports in Kenya has been steadily rising sincethe
imposition of tax on export of hides and skins. EPZA will facilitate the development of an export oriented
leather and leather goods in the EPZs to supply high value leather garments, footwear, upholstery, leather
luggage and accesories to global and regional market.
5. Services: The services sector has steadily grown in the EPZ program over the last 5 years and has high global
growth rates. Additionally, some services sub-sectors are characterised by high employment rates which is inline with the EPZA corporate objectives. Support will be directed to this sector to take advantage of current
trends by global BPO players looking for new locations with reasonably priced manpower, ready buildings and
reliable internet bandwidth in East Africa. Services may be targeted are: business process outsourcing, IT
enabled services, marine repair and logistics, shared coprorate service centres and export brokerage, among
others.
6. Pharmaceuticals and medical goods: The pharmaceutical sector is experiencing high growth rates globally
with increased access to medical care and aging populations in Western countries. Taking into account its high
growth rate and growth potential in Africa, the EPZA will focus on attracting export oriented pharrmaceutical
value chain players..
7. Minerals/metals/gemstones: This includes mineral beneficiation including base metal production,
dimension stone, gemstone cutting and setting among others. This sector has been characterised by high
level of investments and use of local resources. Additionally, Kenya is endowed with a wide variety of mineral
based raw materials which have not been fully utilised. Taking these factors into consideration, the EPZA will
focus on attracting and facilitating gemstone cutting and polishing, dimension stone cutting and the production
of mineral based chemicals for export.
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5.2.3.
Target Market
Table 12: Target market and their needs
Target Market
 Local & foreign investors with capacity to invest
in:
 Manufacturing and processing units
 Commercial trading units
 Exportable services and
 Real estate development with infrastructure
and utility provision;
 Local investors with business acumen and drive to
engage in exports under the Export business
accelerator (EBA) in manufacturing and service
activities with the capacity to achieve:
 High percentage of sales as export;
 Diversification of export products;
 High rate of growth of corporate sales
 Strong backward linkages with raw
materials or technology sectors; and
 Timely graduation from incubator to fully
fledged EPZ status.
 Local and foreign investors who can provide
supporting business services which enhance the
attractiveness of the zone and the efficiency of
zone firms.
Needs
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Available and well serviced land
Efficient and effective One-Stop-Shop;
Provision of extended KRA hours;
Up to date market and sectoral information;
Backward and forward linkages assistance;
Marketing facilitation;
Sector specific incentives;
Professional services e.g. lawyers,
architects;
Secure and well lit premises;
Stable and cheaper sources of electricity;
Affordable sources of raw materials;
Social amenities e.g. accommodation;
Affordable transport and logistics services;
Affordable local financial products;
Technical training;
Greater access to regional market.
Available well serviced land, good
landscaping and in a clean environment;
Clear, straight forward lease and
development guidelines
Suitable building available and in good
state of repair;
Accessible sewerage and other waste
disposal services; and
Roads, in good state of repair.
All investors should be able to achieve:
 High exports;
 High employment rates;
 High sectoral growth rates.
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County Governments
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Zones to be established in their counties
Provision of basic infrastructure
Budgetary support from national
government for zone development
Users of EPZA complementary products
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Availability of serviced land for lease;
Ready buildings for lease
Clean Water and effective sewerage
services.
Recipients of EPZA non-core products
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Adequate supply of the non-core products
(Grass& hay, trees, firewood and poles).
Variety of the non-core products.
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6. Implementation plan: Balanced Scorecard approach
The EPZA implementation plan is be based on the balanced scorecard (BSC) approach which will provide the
following benefits.
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Translating strategy into action;
Enhancing focus on critical measures;
Aligning capital expenditure to strategy;
Increasing robustness of management information; and
Aligning individual goals with organizational strategic objectives.
BSC is a management “system” that links strategic objectives to performance measures, targets, and initiatives. The
BSC measures organizational performance from four perspectives: “Financial,” “Customers,” “Internal Business
Process,” and “Learning and Growth” (which includes people, resources, systems, knowledge, intellectual property,
etc.). It works on the premise that financial results are lagging indicators of business performance which depend on
organisational capacity, business processes and profitably meeting customer needs. Thus the balanced scorecard
approach integrates high level results with contributing factors.
BSC recognizes that in broad terms, interventions in the “Learning and Growth” or “Organisational Capacity”
perspective will help enable processes in the “Internal Business Process” perspective, which in turn will help serve
the “Customer” perspective, which will lead to greater optimisation of the EPZ program in the “Financial”
perspective. The measures in the financial perspective are critical to assess organizational performance but that is
not where future value gets created; it has to start farther back in the causality chain mainly within the “Learning
and Growth” perspective and, to a lesser degree within process and customer perspectives. BSC approach for EPZA
is illustrated in figure 17 below.
Figure 17: How the BSC works
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In order to achieve its key strategic results, the results have broken down into strategic objectives which will then
guide the implementation of the EPZA 2014 – 2019 strategic plan based on the strategic themes and focus areas.
Figure 18: EPZA Strategy Map
STRATEGY MAP
ORGANIZATIONAL EXCELLENCE
CUSTOMER FOCUS
BRAND POSITIONING
Effective and Efficient Authority
Increased Socio Economic Contribution
Improved Competitive Business Environment
Increase Business Growth & Citizen Value
Customer
Perspective
Financial
Stewardship
Internal
Business
Processes
Organizational
Capacity
Improve the EPZA brand
Increase Customer Attraction & Retention
Improve Financial
Performance
Diversify Investment
Opportunities
Increase Net Foreign
Exchange Earnings
Increase Investment
Levels
Improve Internal Business
Process
Optimize Human
Capital
Reduce Cost of Doing
Business
Improve Business
Operating Environment
Build Strategic
Partnerships
Improve Corporate
Culture
Embrace
Knowledge
Management
Improve Policy
Environment
Enhance
Technology
6.1. Customer Perspective
The customer perspective focuses on the analysis of the different types of customers, their degree of satisfaction
and the processes used to deliver products and services to customers. Particular areas of focus include, customer
service; new products, new markets, customer retention; customer satisfaction and what the organization needs to
do to remain that customers’ valued supplier. EPZA has identified its customers as current and future investors,
users of EPZA complementary and non-core products, EPZ employees, and the Government of Kenya. The key
initiatives for specific strategic objectives, under the customer service perspective include:
6.1.1.
Increase Business Growth and Citizen Value
The ultimate goal of EPZA is to contribute to Kenya’s GDP and increase citizen value through increasing exports,
employment, technology transfer and global market share.

Execute Employment Incentive scheme for large employers- in consultation with the investors and industry
players, develop and implemt a progressive investment support package capable of attracting and retaining
identified labour intensive industries and encouraging large employers to expand employment within the EPZ
program.
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Raise Profile of EPZ program’s contribution to national economy- This initiative seeks to profile and
publicise the EPZ program’s critical role in economic development, to enable citizens and other stakeholder’s
appreciate its contribution and to have the EPZ sector specifically represented in key economic policy bodies.
6.1.2.
Increase Customer Attraction and Retention
EPZA will re-engineer its internal business processes to be customer focussed as well as invest in improving
facilities and service delivery, in order to attract and retain customers.

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Develop and implement Customer Care program – To enhance the quality of service delivered to its
customer, EPZA will proactively engage with its customers at all levels through a Customer Care program. This
will include new ways to interact with customer, a “ Help Desk” system for customer complaint handling,
refining the client service charter in line with the OSS, supporting customer care champions, intensive training
in customer care across all levels in the organisation and support for customer outreach activities.
Develop and implement operationalisation and retention program- To enhance operationalisation and
retention of EPZ investment, EPZA will implement a program to give proactive support, trouble shoot and offer
solutions to investor.
Enhance CRM capabilities- For more effective interaction with customers, EPZA will operationalise a
Customer Relationaship Management (CRM) system with supporting software to facilitate and document all
marketing interaction withcustomers including lead generation.
6.1.3.
Improve the EPZA brand
EPZA will continuously seek to improve Kenya EPZ brand’s rating as a destination for export oriented investment
and trade.
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Develop and implement a brand strategy – A comprehensive corporate re-branding strategy to improve
Kenya’s EPZs ratings as an investment destination. The re-branding seeks to reposition EPZA in the customer’s
mind, to progressively enhance brand recognition, recall and favourable association and the desire to engage
with the EPZ brand, through active and guided engagement of all staff in delivering the EPZA brand promise.
Corporate clothing, moveable and fixed assets and coporate communications will carry the new brand logo and
brand colours.
Develop and Implement a Communication Strategy- To dramatically increase awareness of Kenya’s EPZ
program and the benefits the program provides to investors, locally and internationally, EPZA will develolp and
implement an innovative communication program to enhance awareness and 2-way communication between
the Authority and it various publics, using both conventional and social media.
Implement a branded CSR program in collaboration with EPZ enterprises- To improve perception of the
EPZ program and the EPZA brand, EPZA will partner with EPZ enterprises to develop and implement a branded
Corporate Social Responsiblity (CSR) program, incorporating EPZA staff and the staff of EPZ enterprises in
initiatives which benefit the community. Initiative to be in areas of health, education and enterprise.
6.2. Financial Perspective / Stewardship
6.2.1.
Reduce Cost of Doing Business
Global competition requires EPZA to continuously monitor production factor costs. EPZA will implement innovative
programs to reduce cost of utilities, logistics, work permits and finance, to increase incentives and labour
productivity, and to offer competitive zone facilities and financial offerings, all in an effort to attract and retain
export oriented investments.
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Develop and implement productivity improvement program for key EPZ sectors- This strategic initiative
will identify key EPZ sectors and in consultation with investors involved, develop labour productivity
improvement program to make the sectors more competitive.
Develop and implement factor cost reduction initiative-This initiative will involve key factor costs analyses,
benchmarking with regional and global competitors, identifying, lobbying for and implementing some cost
reduction opportunities to improve competitiveness of Kenya’s EPZ program
Development and promotion of financial products for EPZ sector- Partnering with financial institutions,
EPZA will facilitate the development of innovative financial solutions for the EPZ sector, to mitigate high
interest rates and risk charges levied on the sector.
6.2.2.
Increase net foreign exchange earnings
In order to enhance business growth, EPZA will increase foreign exchange earnings by boosting exports and local
purchases.
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Develop and implementan export promotion program –This initiative will seek to identify and support EPZ
firms capable of exploiting existing and emerging market access opportunities. Market entry interventions using
relationships with relevant agencies in Kenya, and in target markets, including sourcing funds from them.
Develop and implement aforward and backward linkage program for selected industries – this initiative
seeks to study and select suitable value chains and then encourage and induce EPZ firms to source more goods
and services locally by supporting the development of the local supply chain.
6.2.3.
Improve Financial Performance
Using Initiatives and programs that increase revenue generation, to maximise return on investment and return on
assets, and also reduce costs and improve debt management.

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Develop and implement portfolio management programs for all EPZ productlines (to better focus
resources on result-bearing areas, the Authority will review budgeting systems to allocate capital budgets and
operating expenses to areas which have capacity to generate revenue for the Authority. Each product line
managed as a portfolio with portfolio holders being responsible for both revenues and cost targets.
Develop and implement surplus budget initiative – this initiative will ensure EPZA always realises budget
surpluses.
Cost optimisation initiative – this project will ensure EPZA reduces operating costs
6.3. Process Perspective / Internal Business Process
6.3.1.
Improve Business Operating Environment
EPZA will improve the business environment by reducing impediments to business operation such as minimising
turnaround time, availing information and improving infrastructure.

Set up an Effective One stop shop – This initiative seeks to accelerate the establishment of an effective one
stop shop, to provide a single window for key services to investors at EPZA offices, and in phase 2 to operate a
virtual OSS network as the normal system
6.3.2.
Improve Investment Levels
In order to improve financial performance and increase foreign exchange earnings, EPZA will leverage diverse
investment opportunities to grow investments.
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Develop and implement marketing strategy –This initiative will ramp up strategic marketing through
development and implementation of a marketing strategy to attain corporate investment attraction targets.
Develop and implement land acquisition and zone development program – This initiative will see 3 new
public zones under development by EPZA e.g. in Kitale, Samburu and Nyeri while Athi River and Kipevu zone
capacities are enhanced. Other zones will have been developed by public sector agencies and by the private
sector with whom EPZA will collaborate to identify and designate new zones
Establish and support growth of zone development fund –Funds for 3 new public zones development and
for the refurbishment and expansion of Athi River and Kipevu zones, raised in partnership with strategic allies
Establish a textile city–This initiative will develop and provide physical infrastructure and facilities suited to
the needs of the textile and garment producers to reduce the cost of their establishment at Athi River zone
Establish a regional centre of excellence for textiles and apparel– This initiative seeks to make Kenya the
hub for capacity building, training and applied research for the textile and apparel industries in East and
Central Africa. The centre will serve as a resource for apparel industries management, reducing reliance on
expatriates using the competitive strengths of academic, research, design, policy and regulatory institutions in
East Africa as well as those of private sector firms.
Develop and implement a local investment promotion and support program. This is a locally targeted
investment promotion and enterprise support program.
6.3.3.
Improved Internal Business Processes
EPZA will evaluate and review business processes with a view to simplifying, integrating, re-engineering and
automating key processes for enhanced performance.

Develop and implement business process restructuring program – This initiative seeks to study, review
and rationalise internal business processes at EPZA to create efficiencies and effectiveness, for better service
delivery and increased customer satisfaction. Only value adding processes will be retained and internal team
work and communication will be enhanced.
6.3.4.
Improved Policy environment
EPZA’s efforts to improve the policy environment for EPZs aim to make Kenya the most competitive investment
designation for export oriented production and services. We will invest resources in policy advocacy in order to
improve the ease of doing business, reduce the cost of doing business, and improve the business operating
environment.


Review of Policy Advocacy Programs at EPZA- This initiative will improve policy and legal environment for
EPZ operations. It will expand the Authority’s capacity, support the regulatory and policy reforms towards
establishment of SEZ, which are complementary to EPZs, and produce competitive incentives for EPZ
operations.
Regional Market Access Initiative – This initiative seeks to champion and accelerate the granting of increased
access for EPZ goods to the regional and local markets, above 20%
6.3.5.
Diversify investment and market opportunities
EPZA’s business success will depend on developing new products and services, venturing into new markets through
strategic promotion and exploitation of existing business opportunities.

Develop and implement product diversification strategy – This project will develop and market new EPZ
products and services to meet investor’s and other client’s existing and emerging needs.
EXPORT PROCESSING ZONES AUTHORITY
51 | P a g e

Implement Export market diversification strategy – This project will enhance market access and market
entry for goods and services from the EPZs to markets other than the USA and enhance penetration of nontextile goods to existing market opportunities.
6.3.6.
Build Strategic Partnerships
EPZA will identity value adding stakeholders and actively engage in value propositions to progressively build
dynamic, strategic and mutually beneficial partnerships, that enhance and improve the investment policy
environment.

Develop and implement partnership management program – this initiative seeks to leverage strengths and
capacities of value adding stakeholders to support the achievement of the Authority’s purpose. Relationships
developed should be dynamic, strategic and mutually beneficial
6.4. Organisational Capacity (Learning and Growth/People, Technology and Tools)
6.4.1.
Improve Corporate Culture
Enhanced employee engagement through formal and informal groups

Change management program – effective implementation of change management program
6.4.2.
Optimise Human Capital
EPZA will enhance and make full use of its human capital, to achieve strategic outcomes


Review, devise and implement an effective organisational structure- improved HR capacity
Review and implement employees motivational strategies – Improved employee satisfaction
6.4.3.
Embrace knowledge Management
EPZA will capture, apply and generate value from employees’ knowledge, experience, creativity and expertise to
build business competitive advantage

Develop and implement knowledge management strategy – Knowledge will be documented in electronic
databases. Knowledge sharing will be achieved though informal conferences, workshops, brainstorming and
one to one sessions.
6.5. Monitoring and Evaluation Framework
Monitoring and Evaluation framework, hereinafter referred as M&E Framework, is a critical component of the
strategy implementation plan. The purpose of the M&E framework is to measure the extent to which planned
activities and targeted outputs are being achieved. Through M&E, EPZA will be able to identify where the
organization intends to be and how to get, there and then evaluate achievement of desired targets within the plan
period.
EPZA has set goals that have to be achieved by 2019. The strategies to achieve these goals must be implemented in
an orderly and coordinated manner. Consequently, a comprehensive Monitoring and Evaluation framework must be
put in place to provide the requisite feedback in the sourcing and utilization of the resources towards successful
implementation. The information generated is then objectively used for critically reviewing the success of
respective programs. In summary the EPZA will adopt the following:

An M&E Committee will be formed to continually monitor the progress of the strategic plan;
EXPORT PROCESSING ZONES AUTHORITY
52 | P a g e





The M&E Committee will report to the EPZA board on quarterly basis on the progress made towards achieving
the planned goals;
The CEO and the division/department heads to champion the implementation plan; This implementation will
be guided by the agreed key performance indicators for each initiative;
CEO to chair monthly meetings with divisional/departmental heads. During the meetings, departmental heads
to provide feedback on implementation of their strategies along with challenges faced. The objectives and
initiatives should be cascaded to all the EPZA departments detailing the key activities required by the
departments to implement the strategic objectives; and
Departmental plans should then be rolled out every year and level of achievement of the corporate goals
documented.
Annual reviews also to be done and a Mid-term review in year 3.
Appendix 1: EPZA Financial Projections 2014/15 to 2018/19
FINANCIAL
YEAR 2014/15
to 2018/19
ACTUAL
'2011/12
Ksh
('000)
2012/13
Ksh
('000)
2013/14
2014/15
Ksh
('000)
Ksh
('000)
EXPORT PROCESSING ZONES AUTHORITY
FORECAST
2015/16 2016/17
2017/18
Ksh
('000)
Ksh
('000)
Ksh
('000)
TOTAL
(2015-19)
2018/19
Ksh
('000)
Ksh ('000)
53 | P a g e
Revenue/Income
Application Fees
9,095
675
1,110
805
978
1,275
1,806
2,274
2,763
23,533
25,290
29,832
29,759
33,224
40,307
47,835
53,587
68,973
101,567
157,677
160,831
164,047
167,328
170,675
174,088
84,806
71,226
87,502
91,877
96,471
101,295
106,359
114,868
9,807
9,717
28,302
53,962
64,755
77,706
93,247
111,896
187,795
208,910
304,118
337,406
359,772
388,442
420,389
457,202
Licence Fees
204,712
Rental Income
836,969
Water sales
510,870
Other Incomes
Internally
Generated (Ain-A)
Government
grant (Recurrent)
401,567
1,963,212
558,000
146,828
103,586
118,435
111,600
111,600
111,600
111,600
111,600
-
Total Revenue
2,521,212
334,623
Expenditure
Personnel
Emoluments
Goods,
Utilities,Supplies
& Services
Communication
Supplies &
Services
Investments
Promotion
Expenses
Domestict travel
& Subsistence
Foreign travel &
Subsistence
Printing &
advertising,
Information
supply &
services
Rental of
produced assets
Training
Expenses
Hospitalities
Supplies &
services
Insurance costs
Specialized
materials and
supplies
312,496
422,553
449,006
471,372
500,042
531,989
568,802
1,420,169
191,134
189,659
212,399
233,639
257,003
282,703
310,973
335,851
6,531
7,324
6,004
6,304
6,619
6,950
7,298
7,663
4,544
6,505
4,976
5,225
5,486
5,760
6,048
6,351
6,151
2,354
3,624
3,805
3,995
4,195
4,405
4,625
7,471
7,123
7,925
8,322
8,738
9,175
9,633
10,115
28,414
11,393
7,773
8,162
8,570
8,999
9,449
9,921
8,178
8,638
6,790
7,130
7,486
7,861
8,254
8,666
9,241
7,023
4,804
5,045
5,297
5,562
5,840
6,132
20,574
11,946
14,814
15,555
16,333
17,149
18,007
18,907
13,107
7,838
10,401
10,921
11,467
12,041
12,643
13,275
4,113
2,544
23,847
25,040
26,292
27,606
28,987
30,436
2,840
2,370
3,642
3,824
4,015
4,216
4,427
4,648
34,834
28,869
21,024
45,982
45,101
39,396
27,875
85,952
60,346
138,361
21,129
EXPORT PROCESSING ZONES AUTHORITY
54 | P a g e
Office general
supplies
Fuel, Oil and
Lubricants
Maintenance of
Vehicles and
other transport
Equipment
Maintenance of
other Assets
Other Operating
expenses
Depreciation
(Consumption of
Fixed Capital)
Total
Expenditure
19,388
4,243
2,905
3,342
3,509
3,684
3,868
4,062
4,265
2,870
3,327
3,068
3,221
3,382
3,551
3,729
3,915
2,619
2,960
2,133
2,240
2,352
2,469
2,593
2,722
5,166
2,732
4,790
5,030
5,281
5,545
5,822
6,114
26,313
33,159
38,799
40,739
42,776
44,915
47,161
49,519
27,824
24,946
32,317
33,932
35,629
37,410
39,281
41,245
371,332
334,746
391,449
421,641
454,405
489,975
528,609
564,369
17,798
12,376
27,792
225,110
187,498
2,458,999
-
Surplus/
(Deficit)
62,212
(36,709)
(22,250)
31,104
27,365
16,967
10,067
3,380
4,433
Notes
1. The operating expenses have been projected based on the past cost trends or movements.
2. It is assumed that the Authority will receive a constant recurrent grant of
3. Kshs.111.6Million from FY 2014/15 to 2018/19 To boost revenue, management will have to explore
the following ways:
a.
b.
c.
d.
Reviewing the rates in each of the revenue streams
Having additional revenue streams
Cost control and management
Minimise the losses in water distribution.
EXPORT PROCESSING ZONES AUTHORITY
55 | P a g e
Appendix 2: Tier 1- Balanced Score Card Implementation Matrix - EPZA Strategic Plan 2014-19
No
Performance
Measures
Strategic Initiatives
Objective
Owners
Targets
SI Description
Budget
Start
Date
End Date
Customer Perspective
Strategic Objective: Increase Business Growth and Citizen Value: The ultimate goal of EPZA is to contribute to Kenya’s GDP and increase citizen value through increasing
exports, employment, technology transfer and global market share.
1
1. Increased
employment
2. Increased
contribution to
GDP by EPZ
program
Employment Incentive
program for large
employers
CEO, BD, UTS,
Legal, OIS
1. 156,000 direct
jobs in the EPZ
program by
2018/19 up from
39,961 in 2013/14
Raising Profile of EPZ
program contribution
to national economy
CEO, BD, UTS,
Legal, OIS
2.
3 % of
Kenya's GDP
contributed by EPZ
sector up from
1.32% in 2013
(rebased)
In
consultation
with
the
investors/industry players develop and
implement a progressive investment
support package capable of attracting
and retaining identified labor intensive
industries and encouraging large
employers to expand employment
within the EPZ Program.
This initiative seeks to profile and
publicise the EPZ program's critical
role in economic development, to
enable citizens and other stakeholder
appreciate its contribution and to have
EPZ sector specifically represented in
key economic policy bodies.
Jan-15
Jun-18
Sep-14
Jun-18
Strategic Objective: Increase Customer Attraction and Retention: EPZA will re-engineer its internal business processes to be customer focused as well as invest in improving
our facilities and service delivery in order to attract and retain customers.
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56 | P a g e
No
Performance
Measures
Strategic Initiatives
Objective
Owners
Targets
SI Description
2
1. Improved
Customer
Satisfaction
2. Increased
number of
operational
enterprises
Develop and
implement Customer
Care Program,
GMs, Manager,
UTS
1. Customer Care
program
implemented.
2. Customer
retention up from
82% in 2012/13 to
90% in 2018/19
Develop and
implement
operationalisation and
retention program
GMs, Manager,
UTS
2.Customer
retention up from
82% in 2012/13 to
90 % in 2018/19
Enhance CRM
Capabilities
GMs, Manager,
UTS
3. CRM system
operationalised
Budget
Start
Date
End Date
To enhance the quality of service
delivered to its customers, EPZA will
proactively engage with its customers
at all levels through a Customer Care
program. This will include new ways to
interact with customers, a "Help desk"
system for customer complaint
handling, refining the client service
charter in line with OSS, supporting
customer care champions, intensive
training in customer care across all
levels in the organisation and support
for customer outreach activities.
Sep-14
Jun-17
To enhance operationalization and
retention of EPZ investments, EPZA
will implement a program to give
proactive support, troubleshoot and
offer solutions to investors.
Dec-14
Jun-16
For more effective interaction with
Oct-14 Jun-15
customers, EPZA will operationalize a
Customer Relationship Management
system supported by software to
support and document all marketing
interaction with customers including
lead generation.
Strategic Objective: Improve EPZA Brand. EPZA will continuously seek to improve Kenya's EPZ brand ratings as a destination for export oriented investments and trade.
EXPORT PROCESSING ZONES AUTHORITY
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No
Performance
Measures
Strategic Initiatives
Objective
Owners
Targets
SI Description
3
Improved
Corporate Brand
1. Develop and
Implement Brand
Strategy
BD, GMs,
Manager, PR
Brand strategy
implemented
2. Develop and
Implement
Communication
Strategy
BD, GMs,
Manager, PR
Communication
strategy
implemented
EXPORT PROCESSING ZONES AUTHORITY
Start
Date
End Date
A comprehensive corporate rebranding strategy to improve Kenya's
EPZs' ratings as an investment
destination. The re-branding seeks to
reposition EPZA in the customers'
mind, to progressively enhance brand
recognition,
recall,
favorable
associations and the desire to engage
with the EPZA brand, through active
and guided engagement of all staff in
delivering the EPZA brand promise.
Corporate clothing, moveable and fixed
assets, and corporate communications
will carry the new brand logo and
brand colours.
Sep-14
Feb-15
To dramatically increase awareness of
Kenya EPZ program and the benefits
the program provides to investors,
locally and internationally, EPZA will
develop and implement an innovative
communication program. Program to
enhance
awareness
and
2-way
communication between the Authority
and various publics using conventional
and social media.
Dec-14
May-18
58 | P a g e
Budget
No
Performance
Measures
Strategic Initiatives
Objective
Owners
Targets
SI Description
3. Implement Branded
CSR Program in
collaboration with EPZ
enterprises
BD, GMs,
Manager, PR
CSR Program
implemented
To Improve perception of EPZ program
and the EPZA brand, EPZA will partner
with EPZ enterprises to develop and
implement a branded CSR program,
incorporating EPZA staff and the staff
of EPZ enterprises in initiatives which
benefit the community. Initiative to be
in areas of health, education and
enterprise.
Budget
Start
Date
End Date
Dec-14
May-17
Financial Perspective
Strategic Objective: Reduce the cost of doing business. Global competition requires us to continuously monitor production factor cost. EPZA will implement innovative
programs to reduce cost of utilities, logistics, work permits and finance; to increase incentives and labour productivity; and to offer competitive zone facilities and financial
offerings in an effort to attract and retain export oriented investments.
4
1. Increased
labour
productivity 2.
Availability of
competitive factor
costs for EPZ
sector 3
Availability of
competitive
financing for EPZ
sector
Develop and
implement productivity
improvement program
for key EPZ sectors
EXPORT PROCESSING ZONES AUTHORITY
GMs, Legal,
UTS
Productivity
improvement
program
implemented
This strategic initiative will involve
identification of key EPZ sectors and
for each of the sectors and in
consultation with the investors
involved, develop labour productivity
improvement program to make sectors
more competitive.
Surveys will
establish
the
prevailing
labour
productivity levels and identify
bottlenecks that impede on high levels
of productivity. Thereafter a yearlong
sector specific labour improvement
programs designed and implemented,
for each sector.
59 | P a g e
Dec-14
Jun-17
No
Performance
Measures
Strategic Initiatives
Objective
Owners
Targets
Develop and
implement factor cost
reduction initiative
GMs, Legal,
UTS
EPZ sector Factor
costs reduction
initiative
implemented.
Develop and
implement a forwardbackward linkage
program for selected
industries
OIS, UTS, BD
SI Description
Budget
Start
Date
End Date
The initiative will involve key factor
Oct-14 Jun-16
cost analysis, benchmarking with
regional and global competitors,
identifying,
lobbying
for
and
implementing some cost reduction
opportunities
to
improve
competitiveness of EPZ program.
Development and
GMs, Legal,
5% of EPZ firms
Partnering with financial institutions,
Oct-14 Dec-16
promotion of financial
UTS, BD
using the products EPZA will facilitate the development of
products for EPZ sector
innovative financial solutions for the
EPZ sector, to mitigate high interest
and risk charges currently levied on the
sector.
Strategic Objective: Increase net foreign exchange earnings. In order to enhance business growth, EPZA will increase foreign exchange earnings by boosting exports and
local purchases.
5
1. Increased EPZ
Develop and
OIS, UTS, BD
EPZ exports
This initiative will seek to identify, and
Jul-15
Oct-18
Exports 2.
implement an export
Increased from
support EPZ firms who are capable of
Increased total
promotion program
Ksh. 44.4 billion in
exploiting existing and emerging
domestic
2013/14 to 155.5
market access opportunities. Market
expenditure by
billion by 2019
entry interventions using relationships
EPZ sector
with relevant agencies in Kenya and in
target markets including sourcing
funds from them.
Increased in total
This initiative seeks to study and select
Jul-15
domestic
suitable value chains, and then
expenditure from
encourage and induce EPZ firms to
Ksh 21 billion in
source more goods and services locally
2013/14 to Ksh
by supporting the development of the
52.5 billion by
local supply chain.
2019
Strategic Objective: Improve financial performance. Develop initiatives and programs that increase revenue generation along with optimization of cost
EXPORT PROCESSING ZONES AUTHORITY
60 | P a g e
Jul-17
No
Performance
Measures
Strategic Initiatives
Objective
Owners
Targets
SI Description
6
1. Increased
revenue from
products and
services 2.
Reduced cost of
operation
Develop and
Implement portfolio
management program
for all EPZ product
lines
BD, CIT,
Finance, UTS,
Admin
Increase AinA to
80% of recurrent
budget by 2019
Develop and
implement surplus
budget initiative
Cost optimization
initiative
BD, CIT,
Finance, UTS,
Admin
BD, CIT,
Finance, UTS,
Admin
Budget
Start
Date
End Date
To better focus resources on result
bearing areas, the Authority will
review budgeting system to allocate
capital budgets and operating expenses
to areas which have capacity to
produce revenue for the Authority.
Each product line will be managed as a
portfolio with portfolio holders being
responsible for both revenue and cost
targets.
Oct-14
Jun-19
Realise a budget
surplus every year
This project will ensure EPZA always
realises a surplus budget.
Sep-14
Apr-16
Cost optimisation
initiative
implemented
This project will identify and execute
opportune areas for cost optimisation
and savings so as to reduce operating
costs.
Greater
efficiencies
in
procurement will be achieved.
Sep-14
Jun-16
Process Perspective
Strategic Objective: Improve business operating environment. EPZA will improve the business environment by reducing impediments to business operations such as
minimizing turnaround time, availing reliable information and improving infrastructure.
7
Reduced
Turnaround Time
Set up an effective onestop shop
OIS, UTS, ICT,
Legal, BD
1. One Stop Shop
implemented
This initiative seeks to accelerate the
establishment of an effective one stop
shop to provide a single window for
key services to investors at EPZA
offices in phase 1, with a virtual OSS
network as the second phase
Sep-14
Jun-18
Strategic Objective: Improve investment levels - In order to improve financial performance and increase foreign exchange earnings, EPZA will leverage diverse
investment opportunities to grow investment.
EXPORT PROCESSING ZONES AUTHORITY
61 | P a g e
No
Performance
Measures
Strategic Initiatives
Objective
Owners
Targets
SI Description
8
1. Increased
number of zones
in counties
currently without
zones 2. Increased
investment by EPZ
firms 3. Increased
local investment
under EPZ
program
Develop and
implement a marketing
strategy
Finance, BD,
UTS, OIS
This initiative will ramp up strategic
marketing through development and
implementation of a marketing
strategy to attain corporate investment
attraction targets.
Aug-14
Jun-19
Develop and
implement a land
acquisition and zone
development program
Finance, BD,
UTS, OIS
1. Cumulative
investment
increased from Ksh
48 million in
2013/14 to Ksh
125 million in
2018/19
19 new zones
developed by 2019
including zones in
counties currently
without
This initiative will see 3 New public
zones under development by EPZA e.g.
in Kitale, Samburu and Nyeri, while
Athi River and Kipevu zone capacities
are enhanced. Other zones will have
been developed by public sector
agencies and by the private sector with
whom EPZA will collaborate to identify
and designate new zones.
Oct-14
Jun-19
Acquisition of funds to
support growth of zone
infrastructure
Finance, BD,
UTS, OIS
1. Funding raised
for 3 new EPZA
zones by 2019
2. Funding availed
for refurbishment
of older zones.
Funds for 3 new public zones
development
and
for
the
refurbishment and expansion of Athi
River and Kipevu zones raised in
partnership with strategic allies
Sep-14
19-Jun
Establish a textile city
Finance, BD,
UTS, OIS
Textile and
garment industry
investment
increased from
Ksh 13.5 billion to
Ksh 54 billion in
2018/19
This initiative will develop and provide
physical infrastructure and facilities
suited to the needs of textile and
garment producers to reduce the cost
of their establishment at Athi River
zone.
Sep-14
Dec-18
EXPORT PROCESSING ZONES AUTHORITY
62 | P a g e
Budget
Start
Date
End Date
No
Performance
Measures
Strategic Initiatives
Objective
Owners
Targets
SI Description
Establish a regional
centre of excellence for
textiles and apparel
Finance, BD,
UTS, OIS
Regional Centre of
Excellence
established and
under construction
This initiative seek to make Kenya the
hub for capacity building, training and
applied research for the textile and
apparel industries in East and Central
Africa. The centre will serve as a
resource
of
apparel
industries
management reducing reliance on
expatriates using the competitive
strengths of academic, research, design,
policy and regulatory institutions in
eastern Africa as well as those of
private sector.
Develop and
implement a local
investment promotion
and support program
Finance, BD,
UTS, OIS
Budget
Start
Date
Oct-14
End Date
Dec-19
35 % of enterprise
Locally targeted investment promotion
Aug-14 Dec-18
investment value
and enterprise support program
being wholly
Kenyan owned by
2019, up from
29.9% in 2013.
Strategic Objective: Improved Internal Business Processes - EPZA will evaluate and review its business processes with a view to simplifying, integrating, re-engineering
and automating key areas for enhanced performance.
9
Improved
Develop and
GMs,
1. BPR program
This initiative seeks to study, review
Oct-14 Mar-16
business
implement business
Managers,
completed.
and rationalise the internal business
performance
process restructuring
Finance
2. Customer
processes in EPZA to create efficiencies
program
satisfaction with
and effectiveness, for better service
EPZA adherence to delivery and increased customer
service charter
satisfaction.
Only
value
adding
promises increased processes will be retained and internal
from 75% in
team work and communication will be
2013/14 to 80% in enhanced.
2019
EXPORT PROCESSING ZONES AUTHORITY
63 | P a g e
No
Performance
Measures
Strategic Initiatives
Objective
Owners
Targets
SI Description
Budget
Start
Date
End Date
Strategic Objective: Improved policy environment. Our efforts to improve the policy environment aim at making Kenya the most competitive investment destination. We
will invest resources in policy advocacy to improve the legal and regulatory environment, so as to improve the ease of doing business, reduce the cost of doing business and
improve the business operating environment.
10
1. Improve ease of
doing business
2. Increased access
of EPZ products
into regional and
global markets 3.
Transformation of
EPZ into SEZ
program 4.
Development of
competitive EPZ
incentives
1.Review of Policy
Advocacy Program at
EPZA
Legal, CEO, PR,
OIS, BD
2. Regional market
access initiative
Legal, CEO, PR,
OIS, BD
1. Customer
satisfaction for
ease of doing
business up 5 %
points by 2019
above 2014
baseline. 2. SEZ
program in place
by 2019 3.
Competitive
incentive packages
developed
Increased limit for
EPZ goods sold on
domestic market
This initiative will improve policy and
legal environment for EPZ operations.
It will expand Authority's capacity,
support for regulatory and policy
reform towards the establishment of
the complementary SEZ program, and
produce competitive incentives for EPZ
operation
Mar15
Jun-19
This initiative seeks to champion and
accelerate the granting of increased
access for EPZ goods to the regional
and local markets above 20%.
Sep-14
Jun-19
Strategic Objectives: Diversify investment and marketing opportunities - Our business success will depend on developing new products and services, venturing into
new markets through strategic promotion and exploitation of existing business opportunities
11
1. Diversified
products and
services 2.
Diversified Market
opportunities
Develop and
implement a Product
Diversification Strategy
EXPORT PROCESSING ZONES AUTHORITY
UTS, OIS, BD
Revenue from new
EPZA investment
products and
services providing
Ksh 20 million
revenue per annum
of revenue by 2019
This project will develop and market
new EPZ products and services to meet
investors and other client's existing
and emerging needs.
64 | P a g e
Oct-14
Jun-19
No
Performance
Measures
Strategic Initiatives
Objective
Owners
Implement Export
Market Diversification
Strategy
UTS, OIS, BD
Develop and
implement a
partnership
management program
OIS, HS,
Finance, UTS,
ICT, Legal, PR,
BD
Targets
SI Description
Budget
Start
Date
End Date
Exports from nonThis project will enhance market
Sep-15 Jun-19
textile sector to
access and market entry for goods and
increase from Ksh
services from EPZs to markets other
18.0 billion in 2013 than USA, and enhance penetration of
to Ksh 45.6 billion
non-textile goods to existing market
in 2019.
opportunities
Strategic Objectives: Build Strategic Partnerships - EPZA will identify value adding stakeholders and actively engage in value propositions to progressively build on
dynamic, strategic and mutually beneficial partnerships that enhance and improve the investment policy environment.
12
Increased
networks and
formal
partnerships
10 new MOUs
operationalised by
2019
This initiative seeks to leverage
strengths and capacities of value
adding stakeholders to support the
achievement of the Authority's
purpose. Relationships developed
should be dynamic, strategic and
mutually beneficial.
Aug14
Jun-19
Organisational Capacity (People, Technology and Tools)
Strategic Objectives: Improve corporate culture - EPZA will develop and uphold a positive, collaborative and empowering corporate culture to enable staff achieve
corporate goals
13
Improved
organizational
culture
Change management
CEO
(i) Effective
Enhance employee engagement
program that will
GMs
implementation of
through formal and informal groups
entail:
Managers
change
(i) Develop and
HR
management
implement
program
teambuilding strategies
(ii) Develop and
implement leadership
development programs
Strategic Objectives: Optimise human capital - EPZA will enhance and make full use of its human capital to achieve strategic outcomes.
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Sep
2014
30th June
2019
No
Performance
Measures
Strategic Initiatives
Objective
Owners
14
1. Improved
human resource
capacity 2.
Improved
employee
satisfaction
(i) Review, design and
implement an effective
organizational
structure
(ii)
Review and implement
employee motivational
strategies
CEO
GMs
Managers
HR
15
Knowledgeable
staff
Develop and
implement a
knowledge
management strategy
GMs
Managers
HR
Targets
SI Description
Budget
Start
Date
End Date
(i) Improved HR
(i) Review strategic roles and reporting
Aug30th June
capacity
relationships
(ii) Workforce
14
2019
(ii) Employee
Planning
(iii)Review terms and
satisfaction rating
conditions of service (iv) Develop and
increased by 5
implement management development
percentage points
programs
between 2014 and
2019
Strategic Objective: Enhanced knowledge management - EPZA will capture, apply and generate value from employees' creativity and expertise to build business
competitive advantage
(i) Employee
Competency index
increased by
10%between
2013/14 and 2019
(i) Knowledge will be documented in
an electronic data base for everyone to
retrieve and use without contacting the
person who originally developed it.
(intranet)
(ii) Knowledge
sharing will be achieved through
informal conferences, workshops,
brainstorming and one-to-one sessions.
Sep-14
30th June
2019
Strategic Objective: Enhance technology - EPZA will acquire and deploy modern technology and tools to increase efficiency and effectiveness.
16
Increased
Automation Levels
1.Develop and
Implement an ICT
strategy 2.Develop and
Implement an ICT
Business Continuity
Plan
HR, Finance,
Admin, BD, ICT
Automated 100%
of Key business
processes
Jul-14
Development and implementation of
robust ICT strategy to leverage
technology for improved efficiency
and performance backed up by the
development and implementation of
an ICT business continuity.
TOTAL
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