Energy, ICT top Kenya agenda at Obama summit

Kenya’s energy, ICT and manufacturing sectors are expected to be the biggest beneficiaries of the Global Entrepreneurship Summit (GES) that opens in Nairobi Friday, President Uhuru Kenyatta said on Tuesday.

Mr Kenyatta, who is co-hosting the summit with US President Barack Obama, said Kenya would use the forum to strike deals that funnel investments in areas that will drive growth.

President Kenyatta said his government was keen on attracting investments that would help diversify Kenya’s products portfolio in the global market and improve its balance of trade that is currently heavy on imports.

“Diversification will be one of the items on the summit’s agenda. We look forward to what is to come: to partnerships, to shared prosperity and to a new era of innovation and possibility,” Mr Kenyatta said when he briefed the media on the summit and Mr Obama’s visit at State House, Nairobi.

Kenya, which last year exported Sh38 billion worth of goods to the US, has largely been feeding the world’s largest economy with textiles free of taxes under the African Growth and Opportunity Act (Agoa).

East Africa’s largest economy has also been benefiting from dollar inflows from American holidaymakers visiting its palm-fringed beaches and sprawling game parks.

That flow of foreign tourists has nearly stopped in recent months as the US and other western governments issue travel advisories in the wake of frequent attacks by Somalia-based Al-Shabaab terrorist group.

Mr Kenyatta underscored the importance of the economic and political alliance between Kenya and the US, saying his engagement with Mr Obama would seek to deepen those ties.

“Our textiles find a ready market in that country; our natural heritage brings many American visitors each year. Of course, there remains scope for better, more diversified trade and investment in energy, in technology and in manufacturing,” he said.

READ: American investors express unshaken faith in Kenya

Analysts welcomed the plans to ramp up investments in manufacturing, energy and ICT, saying these would add impetus to private sector expansion and drive growth.

“Investors want low-cost power for their businesses to scale. This sharpens their competitive edge for growth and jobs creation,” said Bitange Ndemo, a senior lecturer at the University of Nairobi’s business school.

Dr Ndemo said increased investment in ICT would produce more innovators who are critical to the emergence of new ideas.

He said Kenya should attract more private investor investment in the energy sector, reduce government interference and increase competition that would push down prices, as has happened in the telecommunications industry.

Dr Ndemo, however, maintained that the government should pursue the provision of basic amenities like water, medical care and housing to low-income groups with the same zeal it has recently applied in the energy and infrastructure sectors to bridge the ever-widening socio-economic gap.

The share of Kenya’s manufacturing to the gross domestic product (GDP) has remained almost static at 10 per cent for nearly 10 years, unnerving policymakers who are in charge of the Vision 2030 goal of turning the country into a newly-industrialised economy by 2030.

Manufacturing grew by 3.4 per cent to Sh537.3 billion last year compared to 5.6 per cent in 2013.

Kenya’s economy remains heavily dependent on agriculture, which accounted for 27.3 per cent of the GDP last year.

Mr Kenyatta on Tuesday said 1,400 investors had confirmed attendance of the summit, half of whom are from Africa and the rest from other parts of the world.

Officials from the Industrial and Commercial Bank of China, the world’s largest bank, on Tuesday met Mr Kenyatta at State House Nairobi and pledged to pump more cash into the economy in the form of investments.

The bank’s chairman Jiang Jianqing, who was accompanied by top Chinese investors, said his country was happy about Kenya’s progress and was ready to invest in the economy.

“We are impressed by Kenya’s progress and we will bring more Chinese investors to Kenya. Kenya is not only the fastest growing economy in Africa, but also leading in the world,” he said.

About 280 GES participants or a fifth of those that have confirmed are locals.

Mr Obama launched GES in 2009, aiming to establish a forum that brings together entrepreneurs and investors from across the world to showcase innovations, exchange ideas and help trigger economic growth.

Hundreds of Kenyan innovators and start-ups are looking to attract private equity and venture capital funds for growth. Mr Kenyatta said the summit would offer a platform for critical partnerships that promote skills transfer and jobs growth. 

“As entrepreneurs, we will have the chance to meet some of the world’s most successful entrepreneurs in sessions, to pitch our ideas and to grow the scale and impact of our enterprises,” the President said, adding that Kenya’s investment landscape provided a lot of opportunities for American investors including in health and infrastructure.

On Tuesday’s announcement followed an earlier one on July 12 in which globally acclaimed investors promised to invest “billions of dollars” in Kenya’s renewable energy.