The Export Business Accelerator (EBA) Programme

Background

Since the commencement of the EPZ programme in 1990 mostly large enterprises have benefited from the programme with minimum participation of small and medium enterprises (SME) that have majority local shareholding.  In order to establish why there has been low participation of Kenyan SME exporters in the EPZ programme EPZA conducted a feasibility study through technical assistance by the Commonwealth Secretariat in 2003/04. The feasibility study identified the following key constraints that are faced by SME exporters wishing to set up under the EPZ programme;

a)    Lack of export market information
b)    Lack of suitable business premises
c)    High rental costs of EPZ facilities
d)    Lack of credit facilitation
e)    Lack of suitable export facilitation for SME exporters
f)    Lack of provision of business development services

The feasibility study recommended establishment of a facilitation programme for SME exporters desiring to operate under the EPZ programme - the export business incubator programme.  The export business incubator is unique in that it aims at accelerating growth of operational SME exporters desiring to set up under the EPZ programme and hence its name Export Business Accelerator (EBA).

The Export Business Accelerator (EBA) programme is an initiative of EPZA to nurture SME exporters into medium/large exporting enterprises through alleviation of operational constraints in collaboration with other key stakeholders involved in SME development in Kenya. 

The pilot phase of the EBA programme is located at Athi River EPZ and because it has been successful EPZA plans to have it replicated in the Kenya counties.  The phase I and phase II of the incubator buildings are already housing SMEs under the EBA programme. 

Incubator Building: Phase II


 




Incubator Building: Phase I
 

Selection Criteria for EBA Enterprises

The EBA programme enterprises are selected against the following criteria:

a)    Operate in the target sectors
b)    Are a new version of existing business not start-ups
c)    Have work space requirements consistent with what is available
d)    Plan to graduate from EBA to normal EPZ programme after a maximum of 5 years   
e)    Are prepared to accept the rules and business development services (BDS) provided by the EBA programme
f)    Capital investment for the project is under Ksh40 million
g)    Plan to have a labour force of no more than 100 workers.
h)    Will have more than 75% local Kenyan shareholding

EBA Programme Incentive Package

a)    Tax Incentives

1)    No corporate tax for 10 years and 25% thereafter
2)    10 years withholding tax exemption
3)    100% investment deduction over 20 years
4)    Perpetual import and VAT exemption on company inputs i.e. raw materials, machinery, services and other business inputs (except certain fuels and motor vehicles)
5)    Stamp duty exemption


b)    Business Development Services (BDS) 

Below are the BDS services that are provided under the EBA programme in collaboration with other key stakeholders involved in SME development in the country;
1)    Export marketing
2)    Export logistics and customs management
3)    Product design & development
4)    Business planning and management
5)    Credit facilitation for small enterprises
6)    Quality Management  
7)    Technology sourcing and application

c)    High Quality Infra-structure 

•    Space for  lease is available which includes offices and production go-downs at competitive rates 


Existing SMEs under EBA Programme

The pioneer SME exporters under the EBA programme are from the horticultural, commercial crafts and textile/apparel sectors.  The EBA enterprises commenced operations in August 2009 and are exporting to Europe and regional markets (COMESA, etc).

Horticulture sector: Fresh Produce  

                                         
        

Textiles/Apparel sector:  Kikoys

 


Commercial crafts: Jewellery and gift items