Kenya’s Big Reset for Economic Zones

FTZ News: In the quiet corridors of Kenya’s National Assembly, a dense piece of legislation published on July 2, 2026, has begun to draw more than the usual bureaucratic attention. The Kenya Economic Zones Bill, 2026—appearing as National Assembly Bills No. 46 in Gazette Supplement No. 179—proposes the most significant overhaul of the country’s special economic zones and export processing zones in more than a decade. At its core sits a simple but consequential idea: replace the fragmented system that currently governs these industrial enclaves with a single, more powerful authority and a clearer set of rules for how zones are created, licensed and run.

Kenya already operates one of East Africa’s more ambitious zone programs. Officials count roughly 38 special economic zones across the country. Over the past five years those zones have attracted more than 144 billion Kenyan shillings—about $1.12 billion—in investment and generated more than 41,000 jobs. Seven of the zones function under formal customs control; three are fully operational. Yet the existing dual framework, split between the Special Economic Zones Authority and the Export Processing Zones Authority, has long been criticized for overlapping mandates, uneven enforcement and slow decision-making. Investors and county governments alike have complained that the rules for declaring a new zone or securing a license remain opaque and time-consuming.

A Single Authority for a Fragmented System

The new bill attempts to solve that problem by creating a single Kenya Economic Zones Authority. Clause 4 of the draft is blunt: “The Kenya Economic Zones Authority is established.” The proposed body would assume responsibility for both special economic zones and export processing zones, as well as the businesses operating inside them. It would set criteria for declaring new zones, issue licenses, monitor compliance and coordinate infrastructure support. Supporters argue that a unified regulator can cut duplication, accelerate approvals and present a more coherent face to foreign capital.

The scale of the ambition is measurable. County governments have already begun positioning themselves for the new regime. In Kakamega, officials this week signed a memorandum with the existing Export Processing Zones Authority to develop an industrial park on 48 acres of county land, with another 42 acres earmarked for expansion. The project is projected to create 5,000 jobs. In Mombasa, business leaders continue to press for faster progress on the 3,000-acre Dongo Kundu Special Economic Zone, a development that officials claim could eventually support as many as 100,000 direct and indirect jobs and include a free port, logistics facilities and manufacturing space. These local initiatives illustrate both the hunger for industrial land and the practical pressure the new national framework will face once it becomes law.

The Gap Between Legislation and Reality

Yet the bill’s promise collides with familiar African realities. Special economic zones across the continent have often delivered impressive investment announcements while falling short on job quality, technology transfer and linkages to the domestic economy. Kenya’s own record is mixed. While the headline numbers—144 billion shillings invested, 41,000 jobs created—are real, many zones still struggle with incomplete infrastructure, power reliability and the difficulty of moving goods efficiently to regional markets under the African Continental Free Trade Area. A single new authority will not automatically solve those operational bottlenecks.

There is also the question of political economy. Concentrating licensing and declaration powers in one national body could streamline decision-making, but it risks reducing the influence of county governments that have become more assertive since devolution. The bill’s language on criteria for declaring zones remains relatively broad, leaving room for both flexibility and discretion. How that discretion is exercised will determine whether the new system favors well-connected developers or opens genuine opportunities for smaller, more innovative projects.

Jobs, Ambition and the Test Ahead

For ordinary Kenyans the stakes are concrete. Youth unemployment remains stubbornly high. Each new factory floor or logistics warehouse represents not only capital inflows but the possibility of stable wages in regions that have long depended on agriculture or informal trade. The Kakamega memorandum, with its explicit promise of 5,000 jobs, and the larger claims surrounding Dongo Kundu, speak directly to that hope. Whether the Kenya Economic Zones Bill can convert legislative architecture into tangible employment will depend less on the elegance of its clauses than on the unglamorous work of power connections, road access, customs efficiency and consistent rule enforcement.

The legislation is still moving through parliamentary process. If enacted in something close to its current form, it will mark a deliberate attempt to professionalize one of Kenya’s primary tools for attracting manufacturing and logistics investment. The numbers already on the board—billions of shillings committed, tens of thousands of jobs recorded—show that the zones matter. The test now is whether a single authority and clearer rules can turn scattered industrial parks into something closer to a coherent national strategy./.