Kenya has entered into a Sh128 billion ($1 billion) lease agreement with the African Export-Import Bank (Afreximbank) for the development of the Dongo Kundu and Naivasha Special Economic Zones (SEZ).

Speaking in Mombasa after the agreement was signed, President William Ruto explained that the funds would significantly accelerate the development of the two SEZs, which are expected to generate a total of 140,000 jobs. The deal allocates Sh30 billion to the Dongo Kundu SEZ, a project that has faced uncertainty for decades.

“This Sh128 billion development lease agreement for the Dongo Kundu and Naivasha SEZs will speed up Kenya’s industrialisation, manufacturing, and agro-processing sectors, reinforcing our position as a regional export powerhouse,” said Ruto.

He further noted that the agreement would facilitate the establishment of industrial parks, strengthen intra-Africa trade, and empower local businesses to compete within the African Continental Free Trade Area (AfCFTA) framework.

The noted that in the past two years, Kenya had secured an additional six SEZs, costing Sh3 billion, with the aim of promoting export trade and wealth creation.

The new SEZs will be set up in Thika, Sagana, Eldoret, Njoro, Busia, and Vipingo.

Ruto compared Kenya’s 250 SEZs to China’s 3,000 SEZs, which have been instrumental in powering its economy.

However, there is a challenge, 97 investors who have applied for permits to invest in the Dongo Kundu SEZ, he said, require 7,000 acres of land. Currently, the Kenya Ports Authority (KPA) has allocated 3,000 acres for the project, of which 500 acres have been earmarked for Taifa Gas, a Tanzanian firm that has already commenced the development of a Sh20 billion facility at Dongo Kundu SEZ.

During the announcement, Ruto also revealed a bonus for 7,000 KPA workers who had achieved a milestone of two million 20-foot equivalent units (TEUs) this year.

Coast region leaders, including Senate Speaker Amason Kingi, Cabinet Secretaries Hassan Joho and Salim Mvurya, expressed optimism about the potential of the Dongo Kundu SEZ in addressing the region’s unemployment crisis and creating numerous jobs. Kingi emphasised that the development of the SEZs would position Kenya as a regional export hub.

Afreximbank President Professor Benedict Oramah described the agreement as a positive step towards the industrial transformation of Kenya. “The development of Dongo Kundu and Naivasha SEZs, which had previously been uncertain, is now a reality. These projects will help Kenya transform into a major industrial hub in the region,” he said.

Oramah also projected that exports from Dongo Kundu would exceed Sh193 billion (US$ 1.5 billion).

The planned activities within the industrial parks will include agro-processing, export logistics, pharmaceuticals, petrochemicals, footwear, textile and leather production, and packaging, among others.