With the current unstable trends in the global market, Kenya remains optimistic in its exploration of various business opportunities in China in a bid to boost its GDP. Kenya projects growth of about US$150 billion by 2024 against the current growth rate, which stands at US$79.21 billion.
Most economists have advised the country to pay close attention to its transport network, which will help Kenya realise its “Vision 2030” to become a middle-income economy through improving agriculture, manufacturing and tourism. Modern infrastructure projects like roads, ports and railways financed by China have injected vitality into the country’s major transformation project.
As the country prepares its budget for the 2019/2020 fiscal year, which will be read in early June, one fact has emerged – the Belt and Road Initiative (BRI) through the construction of the 478km Mombasa-Nairobi standard gauge railway remains the key determinant of Kenya’s economic growth as well as the economic game changer of the entire East Africa.
As a journalist who bears the responsibility of informing the society, I can attest to the fact that Kenya’s economy will continue to thrive with its steady commitment to implementing the visions of the BRI. At the same time, the BRI will also continue to unlock different business and job opportunities for the youth. In essence, Kenya will be building a community for the shared future for mankind, which is a key objective of the BRI.
A year after it first started full operations in January 2018, the freight services along the Chinese built railway generated nearly US$86.32 million (KSh8.72 billion under) for the whole year, according to data from the Kenya National Bureau of Statistics (KNBS).
The data also shows that the operator, the China Communications Construction Company, sold slightly more than 1.66 million tickets, earning about US$15.8 million (KSh1.61 billion) in revenue that year.
At the same time, due to closer Sino-Kenya ties, the banking sector in Kenya has started to explore the Chinese market. The Kenya Commercial Bank (KCB), a regional financial institution, plans to open a representative office in China next month to lower the cost of Sino-Africa trade, according to Lawrence Kimathi, KCB Group chief finance officer.
“We hope to use the office to lower the cost of transactions between the Chinese and East African business communities by enabling payment for imports and exports in local currencies,” said Kimathi.
The Kenyan regional bank also plans to introduce the Chinese yuan in all its countries of operations by the end of the year. Kimathi noted that increasing Sino-African trade has created higher demand for Chinese currency. The availability of the Chinese yuan, or renminbi, will remove the need for Chinese and East Africa businesses to trade in goods and services using foreign currency.
Abiding by its principle of extensive consultation and joint contributions for shared benefits, banking experts believe that as a result of practical cooperation based on inclusiveness and openness provided by the BRI, many Chinese construction firms in Kenya and beyond will continue to secure bonds and bids for their tender processes more easily than before.
This move shows that China remains a key trading partner of Kenya and other African countries and that Kenya is leading Africa in the move away from over-reliance on Western assistance.
Instead, it is advocating embracing the opportunities of the BRI for improved infrastructure like the Mombasa-Nairobi railway, which acts as the gateway to the Golden Segment of Maritime Silk Road. Another example is the Ethiopia-Djibouti railway, which has continued to improve regional integration initiatives, and is key to sustaining development and encouraging long-term prosperity for the entire region.
Since Kenya joined the BRI in 2013, tremendous socio-economic achievements have followed. Currently, Kenya is the only African country allowed to export its avocados to China. At the same time, China is currently constructing the Nairobi-Naivasha railway, which is an extension of the Mombasa-Nairobi railway.
As a result of stronger cooperation between the two countries, China will help the country modernise its old railway line to link Kenya to Uganda. This move will also enhance trade in East Africa as well as improve its economic growth and create more job opportunities for the growing number of graduates the country produces every year.
Currently, the BRI has investments in 152 countries with a total estimated cost of US$6 trillion, and China has signed a Memorandum of Understanding (MOU) with 125 countries and 29 international organisations.
In conclusion, critics, who say Kenya is saddling future generations with debt from China, need to first see that the BRI continues to enable Kenya to have win-win opportunities which will spur economic development.