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For the first time in more than two decades, Kenya is openly paying court to West after years of looking east for Chinese investments, in what is now seen by many as pulling a placatory rabbit out of the hat.
British influence for instance, Kenya’s colonial bequest, coupled by US charities as well as China’s slowing economy are some of the factors making Europe a more attractive investor, but China should not panic, according to economists who say the world’s second largest economy will continue to call shots in the country’s investment spheres.
A decade ago, in 2007, Zimbabwe’s long-serving president, forced to retire a few months ago, in his address to a packed rally at a Chinese-built national sports stadium in Harare, famously said, “We have turned east, where the sun rises and given our back to the west, where the sun sets.”
Those words would be unpleasant to not only Zimbabweans but also Kenyans now that the West are fast coming back to reclaim what they think is rightfully their turf, as it is today seen in most African countries where the continent continues to heavily rely on Chinese and Japanese yens to fund their mega projects.
Recent activities back home rightly point to a certain change of tactic that tends to oppose Mugabe’s thinking.
No sooner had President Uhuru Kenyatta sworn in for his second term in office, than the flattering of eyelashes with the Western economic powerhouses began. There has been a brewing passion which has been shaping up like a high school romance, according to Peter Biwott, an economist and Chief executive of Export Promotional Council (epc).
State visits by President Kenyatta between 2013 and 2018 to London three times, New York and Los Angeles in the US, Brussels in Belgium, Taormina, Rome and Milan in Italy as well as Paris in France, in trips where certain bilateral trade deals were either discussed or signed, signals how significant Kenyatta is keen to restore such relations if he’s to successfully execute his Big Four Agenda.
“It was bound to materialize at some point in big scale, to rekindle that old flame that had been dying over the years,” he says, but he’s quick to point out that, while the country is courting the West for investment, there is no lost love for Beijing power brokers who have financed Kenya’s most recent iconic structures like Thika superhighway and Standard Gauge Railway (SGR) and a host of other facilities erected across the country all of which have come at a dear cost.
International Monetary Fund (IMF) recently quantified the country’s debt at Sh4.6trillion as of November last year, with China whose loan to Kenya contributing a chuck of the debt Kenya owes its financiers at Sh520billion as at December 2017 their biggest lender.
The country has a loan worth Sh82.2billin from Japan while the loan from France stands at Sh62.3billion, signaling how Kenya has for a very long time overlooked Western countries and heavily relied upon China particularly for financial assistance.
That sudden change of mind from the Government, experts explains is as a result of falling commodity prices, brought about by cooling demand for oil and minerals from China and improving US and France economies as well as the desire by the State to have a mix of lenders to complement its expenditure on big developments.
“Our foreign policy has done a full circle but the kind of in round China has made in Kenya will take a long time for the west to catch up and the new international orders will play a key role in rebalancing trade relations,” says Ken Gichinga, Chief Economist at Mentoria Consulting firm, adding that Kenya will play a neutral role for US and China in the near future.
Chinese investments in Kenya are however expected to continue to grow in several key sectors such as construction, infrastructure and manufacturing according to him, as China continues to sit pretty.