President Uhuru Kenyatta arrived in Washington, DC seeking what he described as win-win partnerships.
But he may have had to give out more to secure any benefits. Soon after meeting with President Donald Trump, he told the BBC that trade, not aid, is what Africa is looking for.
In Washington, President Kenyatta also discussed security, the African Growth and Opportunity Act (Agoa), direct flights between Kenya and the US and tourism numbers.
Afterwards, Kenya’s Trade Principal Secretary Chris Kiptoo, who represented Cabinet Secretary Peter Munya, signed a deal with US Trade Representative Robert Lighthizer to establish a US-Kenya Trade Investment Group.
A joint communique signed by the two officials said the group will be some form of a committee meant to “explore ways to deepen the trade and investment ties between the two countries".
Part of its terms of reference is to “support comprehensive trade policies and begin to lay groundwork for a stronger future trade relationship”, a reference to gradual reduction of barriers to trade under bilateral agreements like Agoa.
Dr Kiptoo told the Nation the group will also be charged with ensuring both sides benefit fully from the remaining years of Agoa, set to expire in 2025.
Kenya already enjoys significant trade volumes, standing an average of Sh100 billion with more than Sh40 billion worth of exports to the US under Agoa in 2017.
Kenya says Agoa has created 60,000 jobs, but critics say it benefits foreigners because firms exporting apparel to the US under Agoa are mostly foreign ventures.
In Washington, the President was promoting the country as open for more investments.
President Uhuru Kenyatta and US President Donald Trump lead their respective delegations in bilateral talks at White House in Washington DC, USA, on August 27, 2018. PHOTO | JOAN PERERUAN | NATION MEDIA GROUP
“Kenya is open for business and all we want to do is package our partnership in a way that it is mutually beneficial to you as a private sector and the people of Kenya,” President Kenyatta told a gathering of US investors under the Business Council for International Understanding, a non-profit US organisation that organises trade forums.
He told the group, where US Commerce Secretary Wilbur Rose was present, about the benefits of setting up shop in Kenya for opportunities created by the Big Four development blueprint projects.
The Big Four is the President’s legacy programme to improve manufacturing, food security, healthcare and housing.
The Big Four is, however, threatened by corruption. This agenda also needs funds because Kenya wants to raise manufacturing from 8.4 per cent to 15 per cent of the GDP by 2022, build at least 500,000 housing units a year at an affordable cost and secure food for the population.
Kenya also wants to have at least 70 per cent of the population under medical insurance by 2022. “This presents major opportunities for local and foreign investors in areas such as agro-processing, textiles and leather, the maritime sector, construction, iron and steel, and oil and gas,” he told the business gathering, according to a speech provided by State House.
Soon after he spoke, he witnessed the signing of two agreements that will see two US companies invest $238 million (Sh23.8 billion) worth of projects in Kenya. Twiga Foods secured a $5 million financing deal to enable it to expand its produce distribution business and improve food security in Kenya.
Acorn Housing, an affiliate of Helios Investment Partners, got a $50 million loan for the development, construction and operation of up to 5,200 affordable apartment units for students in Kenya, part of the government’s public-private partnerships to enhance college accommodation.
Actis LLP/Kipeto Energy secured funding worth $233 million for the construction and operation of a 100-megawatt wind power plant near Ngong Hills.
The funding from the US Overseas Private Investment Corporation (Opic) is part of the US government’s Power Africa Initiative to generate more green energy for African homes using pooled funding from the private sector.
“By addressing some of the country’s most pressing development needs from power to transportation infrastructure, these projects will be hugely impactful engines of economic growth and regional stability throughout Kenya,” said Ray Washburne, President and Chief Executive Officer of Opic.
As one of the largest US direct investments in Kenya, Kipeto is a special purpose vehicle for the wind power project in Kajiado County.
In 2016, China Machinery Engineering Corporation clinched the Sh22.6 billion contract for the engineering design, procurement and construction of the wind farm. But last year, it ran into trouble with conservationists who argued the power plant was a risk to nesting sites for endangered birds.
But Kenya had to give more. In a press presentation, President Trump confirmed the construction of the controversial Nairobi-Mombasa highway will go on, despite the protestations on debt. “Your representatives have been dealing with our representatives and making a lot of progress. We’re talking about a very major highway. And that seems to be going along well. That’s a very important project, I think, for your country,” he said.
The 473-kilometre highway, whose cost could be as high as $3.5 billion is to be constructed by US firm Bechtel, just a year after the standard gauge railway on the same route was completed at a cost of Sh327 billion, yet to be repaid.
