advertisement
Markets

Foreigners to drive Kenya’s new trade-centred diplomacy

Acting Foreign Affairs minister George Saitoti with vice-chair of the Kenya Private Sector Alliance, Mr Vimal Shah, at Panafric Hotel Nairobi. Kepsa has partnered with the ministry to improve economic and commercial diplomacy.
Acting Foreign Affairs minister George Saitoti with vice-chair of the Kenya Private Sector Alliance, Mr Vimal Shah, at Panafric Hotel Nairobi. Kepsa has partnered with the ministry to improve economic and commercial diplomacy.  

Kenya has taken a new trade-centred diplomatic stance that will see the country deploy foreign nationals to head commercial departments of its missions across the globe.

Part of the plan is to hire nationals of the target markets with right skills and networks to head the charm offensive instead of sending Kenyans with little or no connections, said Foreign Affairs minister George Saitoti.

The move not only marks a major shift in the country’s diplomatic positioning but also makes a significant departure from the way Kenya has traditionally staffed its embassies and high commissions abroad.

“The expats should bring on board local knowledge that helps the missions come up with unique trade promotion strategies in countries of accreditation,” Prof. Saitoti said.

The new policy puts Kenya in step with countries such as the UK, India, Columbia, Brazil and Costa Rica that have effectively used diplomacy to champion economic interests and tilt trade balance in their favour across the globe.

advertisement

Analysts said the shift to economic diplomacy is not unique to Kenya but is a rising global trend informed by the realization that the rise in global peace and stability is relegating politics from the diplomatic stage. 

“Trade and investment now take up to 70 per cent of ambassadors’ time and this shift is likely to earn Kenya huge benefits,” said Gerishon Ikiara, a lecturer at University of Nairobi’s Institute of International Relations.

“A number of loans, grants, and big infrastructure projects Kenya has received in recent past have been born out of technical co-operation with selected partners,” he said.

Prof Saitoti said the new diplomatic stance should help Kenya grow its export markets, attract foreign direct investments, tourists, and speed up transfer of technical knowledge that the country needs to realise its development goals.

Though employment of foreign nationals may initially see a few Kenyans lose their jobs, the country is in the long term expected to claw back lost ground as increased investment at home and export growth create more jobs in the agricultural and manufacturing sectors besides driving foreign exchange inflows.

The ministry’s wage bill is also likely to rise faster as the foreign professionals ask for relatively higher compensation though the anticipated economic benefits could offset such expenses.

The ministry has scheduled an investment promotion fair in South Africa in December that will kick off a series of similar activities in Brazil, South Korea, Poland, and Nigeria in the medium term.

Kenya has steadily grown its exports in the past 10 years, a move that the United Nations Conference on Trade and Development (UNCTAD) attributes to product diversification.

The number of items exported stood at 222 in 2009 compared to 151 in 2000, representing an addition of 71 new items in 10 years, according to the trade agency.

This helped the value of exports grow from Sh121.4 billion in 2001 to Sh409.8 billion in 2010, or an growth average of eight per cent.

Foreign Affairs ministry has identified more than 20 markets it wants to use as hubs to deepen Kenya’s pursuit of economic diplomacy.

The list includes the UK, US, Spain, Dubai, Zambia, China, Brazil, and South Africa. The hubs  will act as outposts from where Kenya will pursue its commercial goals in Africa, Asia and Australia, Western Europe, North and South America, and the Middle East.

Asia and Africa are Kenya’s biggest trade partners that business leaders have demanded a concentration of diplomatic efforts.

“The scale of economic diplomacy has to be in the context of the African agenda and must specifically target Africa’s untapped natural resources, high population, green energy and strong and resilient manpower,” said Carole Kariuki, the chief executive of the Kenya Private Sector Alliance.

Ms Kariuki gave the example of the newly independent Republic of South Sudan and Ethiopia as markets where Kenya must move with speed to sign bilateral trade agreements faster expansion of its economic interests and for greater impact.

Hiring local economic experts with inside knowledge of their respective cultures, language and business environments should add speed to Kenya’s quest for rapid growth and economic transformation.

“It is important to have people who have  thorough knowledge of processes and institutions of decision-making in the big markets,” said Joseph Kieyah, an analyst at the Kenya Institute of Public Policy Research and Analysis (Kippra).

In the US, for instance, governments and companies spend billions of dollars annually to lobby the Congress on a number of diplomatic issues, including regulation of foreign donations and investments.

Casting a positive image in such markets is seen as critical to attracting investments and strengthening trade ties.

Attracting foreign direct investments is seen as critical to the creation of new jobs and steady the inflow of forex earnings.

Data from the Kenya Investment Authority (KIA) shows investors pumped Sh155.5 billion into the Kenyan economy in fiscal year 2009/10, down from Sh163.4 billion in 2008/09 — the peak year.

Special department

To tap into the billions of shillings sent by Kenyans in the diaspora, the ministry has set up a special department (Directorate of Diaspora and International Jobs) that will provide them with information regarding investment opportunities in the country.

Kenyans in the diaspora send home more than Sh5 billion per month and the remittances have been climbing this year in tandem with the healing economies of Europe and North America –the biggest source of the inflows.

Most of the cash is channeled into the booming property market and to support dependants, with analysts saying broader investments options could increase the remittances. The government has previously announced plans to issue a diaspora bond but has frozen the plan, preferring to raise funds through regular domestic debt instruments.

advertisement