Economy

Kenya takes lion’s share of Japanese funding in region

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President Uhuru Kenyatta and Japanese ambassador to Kenya Toshitsugu Uesawa flag off earth moving machines as they launched the dualling of Ngong Road this week. Infrastructure is one of the sectors that receives support from Japan. PHOTO | JEFF ANGOTE

Relations between Nairobi and Tokyo date back to 1963 when Kenya attained independence from British colonial rule.

Japan, known as ‘Land of the Rising Sun’, opened her diplomatic mission in Nairobi in 1964. Kenya in turnset up an embassy in Tokyo in 1979. Over time, Kenya – Japan bilateral ties have grown and now cut across economic, cultural, political and cultural spheres.

The climax of the friendship is perhaps the selection of Nairobi to host this year’s Tokyo International Conference on African Development (TICAD) – the first to be held outside Japan since the first summit in 1993.

Today, it is estimated that there are more than 1,000 Japanese nationals residing in Kenya – mainly businesspersons, researchers, professionals and volunteers.

Nairobi is also the regional hub for Tokyo’s development finance and trade bodies – serving as headquarters for Japan International Cooperation Agency, Japanese External Trade Organisation (Jetro), and the Japan Bank for International Cooperation.

There were more than 50 Japanese companies operating in Kenya as at the end of December 2014, according to Kenyan embassy in Tokyo.

The list includes imaging firms like Nikon and Canon, motor dealers Toyota, Nissan, Mitsubishi, Suzuki, Honda, electronics company Sharp Corp, Sumitomo, and Nissin Foods among others.

“Japanese companies have taken note of Kenyan’s increased spending power and that is why the country stands out for those expanding their operations into Africa,” said Jetro’s executive director for Atsuhiko Naoe in an earlier interview with Business Daily.

Kenya is the top recipient of Japanese official development assistance in sub-Saharan Africa (SSA)– channeled as loans, grants, and technical assistance.

Tokyo’s support to Kenya is primarily focused on five sectors: infrastructure development, agriculture, environment and water, education, and health.

Japan currently stands as the second largest bilateral lender to Kenya, having lost pole position to China in September 2014.

Trade between Nairobi and Tokyo is hugely imbalanced against Kenya, even though exports to Japan doubled in the last five years to stand at Sh4.05 billion last year from Sh2.09 billion in 2010, according to the Economic Survey 2016.