Kenya seeks stronger ties at China summit

Discussion on financing SGR final phase, Big Four agenda expected on the sidelines of forum which starts today

As the China-Africa Forum for Cooperation (FOCAC) 2018 Summit kicks off today, there is so much at stake for Kenya, and indeed for all African countries attending the conference.

The two-day summit comes in the backdrop of China’s growing influence on the African continent, anchored on enhanced trade deals and China’s current ambitious Belt and Road Initiative.

The initiative is engineered to integrate economies along the Silk Road Economic Belt (Central Asia to Europe) and the Maritime Silk Road (South Asia to Africa and the Middle East). 

China has steadily increased its foothold in Africa, with the trade between the two trading regions hitting almost $170 billion (Sh17.1 trillion) by the end of last year.

Africa’s exports to China amounted to $75.3 billion (Sh7.5 trillion) last year, up 33 per cent year-on-year, while the trade flow in the other direction reached $94.7 billion (Sh9.5 trillion), up three per cent from the previous year. However, at country specific level, states like Kenya are currently experiencing huge trade imbalance with China.

For instance, according to Kenya National Bureau of Statistics (KNBS), the value of imports from China last year reached Sh390 billion, a 20 per cent jump from Sh337 billion in 2016. Despite such huge growth in the value of goods to Kenya from China, exports to the Asian country have not kept pace. In 2016, Kenya exported goods worth Sh10 billion.

According to a statement by the Presidential Strategic Communication Unit (PSCU), President Uhuru Kenyatta who is attending the Summit is expected to witness the signing of an Economic and Investment Co-operation Agreement between China and Kenya.

The Head of State and his delegation are also expected to engage in advanced discussions on financing for Phase 2B of the Standard Gauge Railway (SGR) from Naivasha to Kisumu. The discussions will also cover financing for the Western Bypass in Nairobi.

“President Uhuru’s discussions are also expected to advance Kenya’s shift away from pure debt financing with new emphasis being placed on Private-Public Partnerships and the need to explore innovative off-balance sheet financing for the country’s infrastructure needs,” the statement said.

Fresh synergy

The 2018 FOCAC meeting is also expected to discuss and give fresh synergy to China’s Belt and Road Initiative, a mega project is intended to realise the Chinese dream of increased trade and economic empowerment among dozens of economies in Asia, Europe, Africa and Oceania.

Kenya is already benefiting from this initiative with the first phase of the Standard Gauge Railway from Mombasa to Nairobi already completed. The second phase and the Lamu port are currently underway with many other projects in the pipeline. Uhuru last week told China Global Television Network (CGTN) that the country is looking forward to gaining more from the Road and Belt Initiative.

He said the initiative is tremendous because the objective is to open economies to trade.

“The objective is to encourage trade amongst us…connecting Asia, part of Europe, through the Gulf’s Arab states linking us in Africa from the East all the way to the West. I believe it has a potential for a win-win situation for all those involved,” the President said.

“We are very keen as a country and as a continent to partner with China in this initiative,” Uhuru added. African manufacturing and industrialisation is also expected to feature at the Summit. For instance, Kenyan delegation will be seeking support for the Big Four agenda, which Uhuru intends to define his legacy.

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