(Nairobi) – Kenya is being urged to finalize the land title deed issues for parcels allocated to neighboring countries at the Naivasha Special Economic Zone, which are key to boosting regional trade and the use of the Standard Gauge Railway (SGR).
The land, which was given to Uganda, South Sudan, Rwanda, and Burundi for the development of logistics hubs and Special Economic Zones (SEZs), has remained undeveloped in recent years. This delay is preventing feasibility studies and investments that are crucial for the success of these projects.
According to John Deng, Executive Secretary of the Northern Corridor Transit and Transport Coordination Authority (NCTTCA), resolving the title deed issue is critical to advancing the development of these logistics hubs, which are expected to handle cargo for the respective countries. The projects are part of Kenya’s broader efforts to enhance trade along the Northern Corridor, the main transport route linking Kenya with its landlocked neighbors.
The Northern Corridor runs for 1,700 kilometers between Mombasa (Kenya), Uganda, Rwanda, Burundi, and Eastern DRC, while the Central Corridor, covering 1,300 kilometers, serves Tanzania, Rwanda, Burundi, Uganda, and Eastern DRC, with an exit and entry point at the port of Dar-es-Salaam. The Central Corridor has grown in recent years as a competitor to the Port of Mombasa.
In 2019, Uganda was allocated land at Naivasha to build a logistics facility to handle its imports and exports. Uganda, being the largest transit destination for cargo arriving at Mombasa, is crucial to the region’s trade. South Sudan was allocated 10 acres in December 2020 to construct an inland container depot at the Naivasha Industrial Park. Rwanda was also given 9.8 acres, and Burundi was included in the initiative to enhance regional trade along the Northern Corridor.
The NCTTCA, tasked with coordinating logistics activities in the region, has called for the Kenyan government to implement promised incentives and waivers to allow development to proceed. These incentives are expected to include full exemption from Value Added Tax (VAT), excise duty, import duty, and Import Declaration Fees for SEZ development.
Investors are also set to receive favorable tax rates, such as a 10% corporate tax rate for the first 10 years, rising to 15% for the following 10 years, and 30% thereafter. Other incentives include preferential withholding tax, exemption from stamp duty, and a 100% capital expenditure allowance on buildings and machinery.
These initiatives are designed to encourage the development of logistics hubs, warehouses, and other infrastructure for handling cargo, which will help increase the use of the SGR freight services and the Naivasha Inland Container Depot, further boosting Kenya’s position as a key trade hub in the region.
Mohamed Daghar, Kenya’s Principal Secretary for Transport, has assured that Kenya is committed to facilitating the development of these projects. He confirmed that the government is working with the relevant authorities to ensure the issuance of titles in accordance with the directives given by the President.
Breakdown of Proposed Incentives
| Incentive | Details |
|---|---|
| Tax Exemptions | VAT, excise duty, import duty, Import Declaration Fee for SEZ development |
| Corporate Tax Rates | 10% for first 10 years, 15% for next 10 years, 30% thereafter |
| Withholding Tax | Preferential rates for investors |
| Stamp Duty Exemption | Exemption for SEZ-related projects |
| Capital Expenditure Allowance | 100% allowance on buildings and machinery |