Kenya a key beneficiary of FOCAC

Source:中国投资参考 2020-03-24

  

Seven months from now, the Forum on China–Africa Cooperation (FOCAC) will be marking 20 years since its inception participated in first Ministerial Conference which was held in Beijing from 10-12 October 2000.

  Since its inauguration, it has bolstered the Sino-Africa relationship which has resulted into a win-win partnership.

  China has implemented the new measures in various sectors that include medical care, human resource development, education, credit and financing among other development sectors.

  In terms of co-operation in medical care and public health service, China has funded the construction of the Malaria Prevention and Treatment Centre and the Mama Lucy Kibaki Hospital in Nairobi. It has also provided 10 million Yuan worth of medical supplies and equipment to the hospital. Another batch of medical equipment will be delivered soon.

  In terms of co-operation in human resource development and education, China has gradually expanded the scale of the training program for Kenyan officials and technicians and organized multilateral and bilateral training courses. Over the last three years, the number of trainees have increased steadily from 158 in 2009 to 398 in 2001. The training also covered a wide spectrum, including economy and trade, agriculture, medical service, communication and education, among others.

  With regard to co-operation in development and use of new energy, China has agreed to provide Kenya with 490 sets of small scale solar energy equipment, constructed the Irati Small Hydropower Station and the Chemosit Small Hydropower Stations; and drilled seven boreholes in the Eastern and Rift Valley provinces. The use of new energy is a key development strategy pursued by Kenya to drive the other major sectors of the economy.

  With regard to credit and financing, China has offered concessional loans and preferential export buyer’s credit to support a large number of infrastructure projects and social development projects in Kenya with a total credit amounting to billions of Yuan.

  These include Nairobi Eastern and Northern Bypass, Nairobi Southern Bypass, Nairobi-Thika Highway (Lot 3), Kenya Power Distribution Upgrading and Strengthening Project, Kenya E-government Project, Technical Industrial Vocational Entrepreneurship Training Project, Olkaria Geothermal Field Production Well Drilling and Kenyatta University Teaching and Referral Hospital.

  China has also offered Special Loan for the Development of African small and medium enterprises (SMEs) in Africa to support the Kenyan SMEs in the areas of tea production, power generation, rural power grids and regional aviation.

  In addition, China has made rapid progress in the engineering contracting market since 1985, and continuously expanded their market share. Chinese companies in compliance with internationally accepted standards built transport, communication and electricity infrastructure in Kenya to improve local conditions for economic growth and self-development capacity.

  The projects include Nairobi-Thika Highway, Marsabit-Turbi (A2) Highway, the new Unit 4 Passenger Terminal at Jomo Kenyatta International Airport, and Berth No.19 at the port of Mombasa.

  China has made investments in different areas, such as motorcycle and car manufacturing, energy development, building materials, real estate and tourism. China’s increased investment has seen it becomes the second-largest source of foreign direct investment in Kenya by 2011.

  The cumulative direct investment is about $280 million.

  In 2011, China-Kenya trade increased to $2.434 billion, a year-on-year growth of over 30 per cent or 17.8 times that in 2000. China’s exports and imports from Kenya reached $2.369 billion and $64.87 million.

  However, according to President Uhuru Kenyatta while in Shanghai in November 2018, he said that China is Kenya’s biggest trading partner with the country’s exports to China amounting to $167 million, while imports were $3.78 billion. The Asian nation accounted for 17.2 percent of Kenya’s trade with the world.

  The imports by Kenyans are in comparison to the rest of Africa, where though trade is still skewed in favour of China, the gap is not as big as it is in the case of Kenya. African countries in 2016 imported goods worth $88 billion (Sh8.8 trillion) and exported goods with a value of $39.9 billion (Sh4 trillion).

  African countries that are major exporters to China and helped reduce the trade gap include Angola, South Africa, the Democratic Republic of Congo and Zambia that sell minerals and oil to China. Angola’s exports reached $13.9 billion (Sh1.4 trillion) in 2016.

  With regard to development assistance, China has completed the construction of Moi International Sports Centre, JKIA-Uhuru Highway-Gigiri (Unep) Roads, Gambogi-Serem Road, and a number of rural primary schools, the projects are all aimed improving the Kenyan economy.

  Last year, when Kenya suffered severe drought and famine, the worst in 38 years, the Chinese government donated rice, flour, cooking oil and other basic necessities worth, which was a friendly gesture towards Kenya in appreciation of the closer ties and concern for each other’s welfare.

  Focac was established 12 years ago and has become an important platform for collective dialogue and an effective mechanism for practical co-operation between China and Africa. It enhances political mutual trust and leads to economic and trade co-operation.

  China is Africa’s largest trading partner. Meanwhile, Africa is now the second largest overseas project contracting market and fourth largest overseas investment destination for China.

  Being the first ministerial conference in the second decade in this century of the Forum since its establishment, the Fifth Focac Ministerial Conference will serve as a major link between the past and future in developing China-Africa relations.

  Both sides will make assessments on the implementation of the follow-up actions of the Fourth Ministerial Conference in 2009, map out China-Africa relations development and co-operation in various fields in the next three years and draft the outcome documents.

  China will continue to propose the new economic and trade measures for strengthening China-Africa co-operation, further supporting Africa in developing economy, improving people’s livelihood, and raising the capacity building levels. China-Africa economic and trade co-operation will thus usher in new opportunities.

  Tourism, manufacturing, clean energy, agriculture, construction, ICT and financial services are key drivers of Kenya’s development goals. We would like to share our experience and enhance our co-operation in these areas.

  Under the impetus of the Fifth Ministerial Conference of FOCAC and through concerted efforts of both sides, the bilateral economic and trade co-operation is bound to reach a new high and benefit both countries.

  Since President Uhuru Kenyatta came into office he has put so much effort in making Kenya the epicenter of the second wave of Pan-African movement on the continent.

  That could be out of the believe that development and progress cannot take place in a vacuum and has to include Kenyan neighbors.

  Apart from the Mombasa-Nairobi Standard Gauge Railway (SGR) which came into operation in 2017, already, construction work is ongoing to take the SGR to Naivasha onwards to Kisumu and into the East African hinterland, a move that will open up the region and boost trade between Kenya and its neighbors.

  That is why the partnership with China on the Standard Gauge Railway (SGR) and several key roads that have greatly improved the transport network, are a key ingredient for growing industries and creating jobs.

  The Belt and Road Initiative (BRI) is one of the most ambitious infrastructure projects ever conceived. It brings back memories of the original Silk Road, which connected Europe to Asia and parts of Africa centuries ago, enriching traders along the way.

  These sorts of deals should not be taken for granted. To date, more than 100 countries accounting for two-thirds of the world’s population have signed on to the BRI.

  Morgan Stanley- an American bank- has predicted the BRI costs could reach $1.2–1.3 trillion by 2027.

  Millennia ago, the Silk Road was formed that had enormous benefits, not just for the Chinese who created it, but for the development of civilizations along the route, including areas in what is now known as the Horn of Africa.

  According to the country’s Minister of Transport, Road, Housing and Urban Development James Macharia told the China Investment Magazine Nairobi has remained to be the main beneficiary of FOCAC since its inception.

  “Kenya is one of the key beneficiaries of FOCAC and more so the 2018’s Beijing Summit and through the eight initiatives proposed by President Xi Jinping, of which one is infrastructure connectivity,

  “we are currently implementing one of the largest infrastructure project in Africa. It is the first largest ever done in East and Central Africa that is standard gauge railway (SGR) and we have a very positive report card on it which we can present anywhere because we have successfully completed the first phase Nairobi-Mombasa with the help of Beijing,” said Mr Macharia.

  He added that Kenya remains significant and strategic to the Maritime Silk Road under the BRI.

  The Africa’s Golden segment of the BRI starts in Mombasa on the east coast, go toward the west, and border Uganda, and then go right into what we call the Great Lakes and then to the west coast of Africa.

  The Minister advised that there is need for incorporating China’s BRI and AU’s Agenda 2063 as a way of looking for complementarity in order to broaden the development strategies in line with the spirit of win-win cooperation and increase people-to-people exchanges.

  The immediate former Principal Secretary for Trade Chris Kiptoo said Kenya has been betting on its good ties with China to increase its exports to Beijing by an annual target of 20 per cent.

  "In 2018, Kenya exports to China increased by 10 per cent. This year, we hope to make it 20 per cent. Kenya Day provides a platform to showcase products such as horticulture, services, tourism, culture, sports and manufactures," said Dr Kiptoo.

  The trade balance is skewed heavily in favour of China. In 2018, Kenya exported goods amounting to $111.328 million to China and imported goods worth $3,708.3 million.

  Nairobi currently prioritises agro-processing and housing under President Uhuru Kenyatta's Big Four Agenda and the PS urged Chinese to consider investing in Kenya through joint ventures with local companies or through public-private partnerships.

  "Kenya is looking to increase foreign direct investment from China, especially in affordable high technology to support the realisation of President Kenyatta's action plan, particularly in manufacturing and low-cost housing," Dr Kiptoo said.

  China has proved a reliable development for African countries in need of progress, not least because development and aid does not come with the fraught demands previously made by Western governments.

  On his part, Chief Administrative Secretary (CAS) of Ministry of Foreign Affairs Ababu Namwamba said that the close ties between Nairobi and Beijing is good for Chinese to visit Kenya as tourists saying that apart from the country being one of the best business hubs in Africa, Nairobi is also best tourism destination in the world hence the Chinese tourists should take advantage of the enhanced bilateral relations between the two countries.

  China is more open about its interests and meets its African counterparts- and others in the developing world- midway.This should not be ignored or underestimated when weighing global partnerships.

  As such, Kenya should ensure that it fully understands the implications of greater engagement with China, taking advantage of opportunities while maintaining the interests of the country.

  ⬆Kenyan school children visit Emali Station of Mombasa-Nairobi Railway;Mombasa Port, Kenya;Kenya’s Isiolo-Masabit-Moyale (A2) Highway built by China Wuyi Company and Jiangxi Zhongmei Group becomes operational

Appendix:

Copyright © 2004, Secretariat of the Chinese Follow-up Committee of the Forum on China-Africa Cooperation
Contact us Address: No. 2, Chaoyangmen Nandajie, Chaoyang District, Beijing, 100701 Tel: 86-10-65962810,86-10-65962827