Lula visit deepens shift in Kenya’s global trade

President Luiz Da Silva’s Tuesday visit to Nairobi has added fresh impetus to the ongoing shift in Kenya’s choice of economic partners in favour of the world’s emerging powerhouses such as Brazil, China and India, economists said.

The shift, which has been gathering pace since President Kibaki came to power in 2003, has seen Kenya turn East – to China and India – for financial, technical and commercial ties for the headroom it needs to reduce its dependence on Europe and North America.

Mr Da Silva, the Brazilian President, and his Kenyan host came out of a meeting at State House Nairobi with a business deal that promises to unlock new areas of social and economic cooperation, including bio-diesel fuel production and soccer training.

Brazil, Russia, India and China belong to the group of the world’s emerging economic powerhouses commonly known as BRICs that, save for Russia, have recently emerged as top players in Africa’s trade and investment scene.

A deepening of ties between Africa and the BRICs has seen the proportion of Africa’s trade with the emerging economies rise from 4.6 per cent in 1993 to more than 19 per cent in 2008.

Kenya is expected to use its growing ties with Brazil to seek affordable technology and loans to build the infrastructure it needs to push economic growth to the double digit levels target required to realise the Vision 2030 development goal.

Like India and China, the South American nation has also emerged as a global powerhouse in the production of cheap goods that require advanced technology such as generic drugs.

Direct flights

Kenya’s bilateral engagement with Brazil has remained low mainly due to obstacles such as lack of direct flights between the two nations.

“What is absolutely striking is how much change there has been between the BRICs and Africa,” Mr Jacko Maree, the CEO of South Africa’s Standard Bank, told Reuters in an interview. “We like to think that the whole story has only just begun.”

President Kibaki’s hand in the ongoing shift is being seen in the fact that he has not visited or hosted any major European leader since coming to power eight years ago but has made several trips to China and India.

Brazil’s arrival in Africa is being seen as promising the continent a fresh opportunity to diversify policy advice, trading partners and sources of investment to South America.

“While Sino-Africa trade has grown particularly rapidly, Brazil’s has remained relatively flat at around 18 per cent of Africa’s total trade with the BRICs in the past two decades,” Simon Freemantle and Jeremy Stevens of Standard Bank said in a recent analysis of the BRICs activities in Africa.

Brazil has, however, stepped up the race for Africa that has seen President Da Silva follow in the footsteps of China and India with to visit to a number of African capitals for the signing of multi-billion commercial deals.