Abstract: Export processing zones have been in existence for decades but have attracted renewed attention in recent years. However, their success in promoting trade across countries is mixed. The main objective of the study was to investigate the effects of macroeconomic factors on the performance of EPZ in Mombasa. The specific objectives were to determine the extent to which the exchange rate control policies, the social economic issues, Kenya’s export-led growth strategy and the Government policy affects the performance of EPZ in Mombasa.
This study adopted descriptive design. Primary data was collected using semi- structured questionnaires. The researcher mailed the questionnaires to the respondents with a request to return after completing the same. Secondary data was sourced from the economic survey (2009) compiled by Kenya Bureau of statistics. Purposive sampling was used as the researcher targeted respondents who are knowledgeable in the area of study. Mainly this included the Chief Executive Officers of the EPZA, the EPZ, the Kenya investment Association (KIA). Qualitative and quantitative data was operationalized, categorized and then finally coded. Descriptive statistics was used in analysis. From the findings the study found out that there is a strong positive correlation between macroeconomic factors and growth in exports in the EPZ. The EPZ therefore view the economic factors as very important hence the specific macroeconomic variables have a positive effect on the growth of exports in the EPZ. The study recommended that the Government should aim at diversifying its exports to foreign markets as well as improving competitiveness of EPZs by providing special concessions on energy costs, improving labour relations by setting minimum wages and by improving the transport infrastructure and easing congestion at the ports. The Government should also lower VAT for business within the EPZ. Further, the Government should lay effective and efficient structure to compete like India and china by reviving collapsed industries such as textile by developing cost-effective cotton textile sectors that provide fabric inputs to the garment industry.
Keywords: Effect of Macro Economic Factors, Financial Performance, Export Processing Zones.
Title: The Effect of Macro Economic Factors on Financial Performance of Export Processing Zones in Kenya
Author: TIMOTHY KARIUKI SIMBA
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
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