Aligning Kenya to benefit from new foreign investment opportunities

It was interesting reading through the proceedings of the US-Africa forum, which focused mainly on business investment opportunities between the two continents.

America is at long last eyeing big opportunities in Africa, the same way the Asian giants have been doing over the past decade or so. Going forward, it looks like new, big business (and competition) for Africa.

It is those countries that adequately plan for these opportunities that will benefit most from the Eastern and Western investors. Kenya will need to position itself to maximise uptake of capital from both worlds.

For instance, Kenya will require scaling up its development planning to reflect the big opportunities that the rest of the world is seeing in Africa. Apart from natural resources, they are also focusing on a large consumer market supported by a fast-growing middle class endowed with huge spending power.

Vision 2030 has been an appropriate long-term planning tool from which sector master plans are being drawn. It is the readiness of such plans that will guide investors where to put their cash.

It is in preparing development blueprints that we need to stretch our imagination to fully capture and reflect the huge opportunities ahead of us. Piecemeal planning and small projects may not sufficiently excite external investors. We require bigger thinking and planning for the longer term national needs.

The Thika highway and other Nairobi bypasses were perhaps the pioneer projects that ushered Kenyans into the league of big projects that make huge transformational differences. Since then we have embarked on other huge projects, which include the new transnational railway.

The fact that we already have in place a 5,000MW-in-40-months power generation plan made it easy for the Americans and their 10,000MW Power Africa project to pick Kenya as an obvious partner for powering Africa.

Yes, a number of Kenyans thought that the 5,000MW power generation programme was too ambitious for the country. Without sufficient reserve power capacity, investments targeted by both the West and East will be elusive for Kenya. This is a good example of thinking and planning big, because we believe the opportunities ahead are huge.

The Lamu Port and South Sudan Ethiopia Transport (Lapsset) corridor is another large and integrated project which was flagged by our regional leaders as ready for investments by the Americans. When Lapsset was launched many thought it was too ambitious, but its time has now come and it is ready for outside investment participation.

Also, a 10,000km roads master plan was recently launched ready with a proposed public-private partnership financing model.

To go hand in hand with project planning is creation of a conducive investment climate that will give Kenya an edge over other African countries competing for the same investments.

Availability of reasonably priced energy, efficient infrastructure, sufficient relevant skills, transparent governance, investor friendly regulatory framework, sustainable security and political stability are all essential ingredients of a facilitative investment environment.

It is these factors that will determine the quantum and quality of investments that we shall clinch. From experience we know that the West is more particular about these facilitative factors than the East.

Kenyans should be confident that we can deliver what is required to be a credible destination for investments. We need to spend more time and energy thinking and discussing opportunities and development, and less on disruptive politics.

And it is not just big foreign investments that we are aspiring to lure, but also maximising associated value for the country.

This can be in the form of local jobs, training and technology transfer, investment and profit sharing with Kenyans and local processing of raw materials instead of exports, among others.

In respect to value addition, we shall need tough investment promoters and negotiators who will maximise investment benefits for Kenya.

With increased interest by the West, we need an investment template that will be seen to be fair and transparent to all investors and contractors.

Value addition should be our main guiding criterion. We are entering an era of competitive investor selection where East-West politics should not be allowed to influence our decision.

I think the Russians will also be knocking on the doors of Africa, too, especially after the recent trade and investment standoff with the West. Moscow will be looking to fill gaps left by the recent boycotts prompted by the Ukrainian crisis. They, too, should be welcome to Africa with open hands if they have value-adding opportunities to offer.

We should not forget that foreign investors are specifically targeting our counties for investments. Such investments should be seen to add, not dilute, value to the total national economy.

It is important for the national and county governments to coordinate over these investments because at the end of the day, we need every dollar we can get.

Yes, foreign investors are thinking big about Africa, and so should we. That is the only way we shall be seen to be equal and credible partners in the investment game.

Mr Wachira is the director, Petroleum Focus Consultants. [email protected]