Kenya to tap into over Sh1 trillion US investment in Africa
Washington DC: Kenya stands to reap big from a thaw in its previously frosty engagement with the US government, which is now targeting Africa with Sh1.23 trillion ($14 billion) worth of investment goodies.
President Uhuru Kenyatta is among 40 African leaders at the US-Africa Summit in Washington DC, a global coup for US President Barack Obama, whose administration had been accused of playing second fiddle to a resurgent China and faced hostility from the African Union over the trials of Uhuru and his deputy William Ruto at the International Criminal Court (ICC).
Obama, serving his last term in office, without the worry of another presidential election, is keen to weaken China’s growing influence on his father’s continent where the US retains plenty of influence through security partnerships and is a top partner thanks to bridges like the Africa Growth and Opportunity Act (Agoa).
It is the largest such ever engagement by a US president with Africa.
“It symbolises America’s long standing commitment to investing in Africa and development of its people,” a statement from White House said.
The US is believed to have accepted that the ICC trials are headed nowhere, and is now working to repair relations after last year’s “choices have consequences” remark by a senior official in reference to the joint candidacy of Uhuru and Ruto in the presidential election.
An investment summit is going on alongside the main summit and global American firms are discussing deals with African finance ministers, including Kenya’s Treasury CS Henry Rotich and a host of corporate bigwigs, among them Equity Bank CEO James Mwangi.
The billion dollar investment opportunities are in construction, clean energy, banking, and information technology across Africa.
“More than a dozen companies, including General Electric Co and International Business Machines Corp, are making pledges, which Obama is scheduled to outline during a US–Africa Business Forum in Washington that is part of a three-day summit involving 51 African heads of state, according to an administration official quoted by Bloomberg News, which is covering the US-Africa Business Summit on the sidelines of the main conference.
“These investments will deepen US economic engagement in Africa, fueling growth that will support broader African prosperity and emerging markets for US businesses, which will support jobs in both the US and Africa,” Reuters quoted a White House official saying.
Uhuru is leading a strong Kenyan delegation to the summit seeking to secure a slice of the pie for Kenya, Obama’s ancestral land. Obama was scheduled to host the Kenyan President and other African leaders to a dinner at the White House.
Earlier, a high-level ministerial meeting unanimously urged the US Congress and government to renew Agoa and extend the expiry period beyond September 30, 2015 in order to help Africa access new markets.
Kenya’s high-powered delegation that includes Cabinet Secretaries overseeing key portfolios is determined to hammer out business deals to expand the country’s opportunities beyond the textile exports it has enjoyed over 14 years.
Obama has committed to the Power Africa Initiative to double access to energy across the continent and a Water Treatment and Energy Recovery facility in Kariobangi, Nairobi, is among the beneficiaries.
The project seeks to expand and modernise the Kariobangi waste water treatment facility. The US Trade and Development Agency has funded a feasibility study to evaluate viable technologies for waste-to-energy applications.
Ironically, USAid, which cut off funding for several projects in Kenya, condemning hundreds to joblessness, has identified Nairobi as a key trade hub and is facilitating new initiatives to reduce bottlenecks along major trade corridors through customs reform.
The USAid Trade Africa Programme and other donors are investing Sh4.6 billion ($53 million) to improve the efficiency of the port of Mombasa, billed an integral part of the broader Mombasa port corridor reform project and championed by the Kenya Government and its landlocked neighbours, Rwanda and Uganda.
The trade hubs educate private sector groups and associations about Agoa opportunities and provide assistance to enterprises and governments to enhance access and competitiveness.
Foreign Affairs Cabinet Secretary Amina Mohamed and Industrialisation Minister Adan Mohammed pressed for the extension of Agoa as Kenya pitched the case for new line of products targeting the US market.
Kenya is looking at venturing in value added products in the leather industry and is shopping for partnerships to produce value added finished products ranging from shoes, handbags, belts and jackets.
“We are looking at exploiting our trade in apparels that has been a major export by targeting the leather industry. We will no longer sell raw hides and skins at throw away prices and deny our pastoralists value in returns,” Adan told The Standard in an interview.
Adan said the leather tanning industry was looking at investors who would champion finished products and Americans were encouraged to troop to Kenya and explore the area.
“We want the Americans to come and invest in Kenya. It will be easier for us to maximise on value of our products and bypass the constraints of visa rules when they sell to Americans back home,” said Adan.
Adan talked of diversified products from Kenya to help Agoa outgrow the huge exports from Africa with 77 per cent of exports from the continent being oil and oil products.