President Uhuru Kenyatta on Wednesday pressed Kenya’s case in trade and health in a round of events in London on the sidelines of the Commonwealth meeting.
Kenya has had a rocky relationship with key Commonwealth countries and President Kenyatta’s administration says it is keen to recast those relations, and especially with Britain.
Britain’s decision to leave the European Union is seen in Nairobi as an opportunity to renew trade and investment relations.
After Jubilee won the 2013 election despite threats of “consequences” and “essential contact” by Western capitals, President Kenyatta went round the world courting unlikely allies to spur Jubilee’s economic agenda.
Amid misgivings in the West that the country’s diplomacy has turned East, the President insisted that is not the case, and that his government is looking for friends and partners irrespective of geography and persuasion to confront economic challenges and global threats like terrorism.
PARTNERSHIPS
Still, the reality belied this as one mega contract after another went East, and western countries and the institutions of capitalism suspended one project after another over governance concerns.
In diplomatic circles, it was clear that something had to give and the West blinked first, hosting him and rewarding Kenya with high profile global meetings.
“We are not looking East or West. We are looking for friends and partners,” he said, a message similar to the one he opened with in his visit to the UK to attend the Commonwealth Heads of Government Meeting (CHOGM).
The meeting’s theme is ‘Partnerships in building democracy, fighting poverty, promoting trade and confronting extremism’.
At Chatham House on Monday, he recounted Kenya’s economic journey in improving the business environment and surviving two difficult elections last year in the face of a biting drought and vigilance against terror.
COHESION
Coming from ringing the opening bell for trading at the London Stock Exchange and securing another platform for Kenyan companies to raise capital, President Kenyatta announced investors would be allowed to buy the National Oil Corporation shares next year to raise Sh100 billion for building infrastructure to evacuate oil from the Turkana fields.
READ: Tullow set to spend Sh17bn in developing Turkana fields
He condemned divisive politics and preached reconciliation.
He promised that all Kenyans in the diaspora could vote in the 2022 General Election once sufficient legal framework is in place.
In return, the President got more support from UK for prevention of malaria — Sh14.28 billion — to be channelled through the global fund.
The money is to be matched with equivalent funding from private sector organisations.
At an earlier event, he called for more direct investment in Africa and supported the continental trade agreement signed last month, arguing that Africa’s development will depend on how its people do business with one another.
TRADE PACT
At a roundtable in London on discussions focused on developing intra-Africa Trade, the President told an audience that Africa’s ability to cushion itself from external economic shocks will depend on how countries open up to improve intra-Africa trade.
“Intra-Africa trade will increase efficiency and competitiveness of Africa’s industrial products through harnessing economies of scale of a large continental market of about one billion people,” he said at the Guildhall on the sidelines of the ongoing Commonwealth Heads of Government Summit.
The President said the recent Africa Continental Free Trade Area (AfCFTA), signed last month in Kigali by 44 African nations, including Kenya, will uplift African countries who routinely depend on foreign aid, and help them earn revenues through trade.
READ: African states sign free trade pact
NIGERIA
But among those in the audience were officials from Nigeria, which did not sign the agreement after President Muhammadu Buhari argued that certain aspects of the deal could kill local industries.
Proponents of the AfCFTA say Africa’s trade with itself need to be lifted.
At 18 per cent, it means Africa trades more with the outside world than within its member countries.
According to the World Economic Forum, Europe has the highest intra-continent trade (69 per cent) followed by Asia (52 per cent) and North America at 50 per cent.
One of the reasons behind Africa’s lagging behind, argues a paper by the UN Economic Commission for Africa, are the restrictive immigration rules, too many tariffs on goods, economies that generally export similar raw materials as well as poor transportation infrastructure.
INVESTMENT
As a net importer of goods, Africa is largely vulnerable to any mishaps in global economies ranging from currency fluctuations to oil price changes.
According to a paper from the Overseas Development Institute, sub-Saharan African economic growth fell from an average of five per cent in 2011 to three per cent in 2016, mainly affected by global oil prices, rising debt and a huge import bill.
The President admitted that promotion of intra-Africa trade should be accompanied by efforts to make African nations increase the share of foreign direct investments they attract instead of relying on official donor assistance.
“Only one out of every 40 dollars of foreign direct investment since the 1990s has gone to sub-Saharan Africa, which is dwarfed by the one out of every eight dollars that went to Latin America and the Caribbean, or the more impressive one out of every four dollars invested in Asian countries,” he said.
POWER
During an investment meeting with UK business leaders, the President was told that UK firm Quantum Power, the owner of 35 megawatt Menengai Geothermal Development, was willing to raise the investment five times, tapping into Kenya’s ambition to generate more power.
The President noted that there have been increasing levels of investor-interest in African countries in the last decade with a notable expansion in the level of foreign direct investment inflows.
“FDI inflows will undoubtedly contribute to the technological development, industrial diversification, and economic growth of host countries,” the President said.
“There should be specific investments targeted at infrastructural development. Africa requires investments to be channelled in expanding and upgrading transportation and other trade-related infrastructure,” he added.
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