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Economy

Norway resets Kenya ties with eyes on trade investments

An Enemy of the People, written in 1882 by acclaimed Norwegian playwright Henry Ibsen was studied as a literature set book in Kenya’s secondary schools for four years ending 2012.

Norway’s relationship with Kenya has been frost in the pasty: In 1990, Kenya suspended its diplomatic relations with Norway, due to Oslo’s (its capital) criticism of human rights violations.

In 1994 the diplomatic relations were restored. But now, Oslo says it has pressed the reset button and wants its friendship with Kenya to be focused on trade and investment.

The Norwegian pension fund – the world’s largest sovereign wealth fund with a market value of Sh89.2 trillion - invested for the first time in Kenya in 2012 and currently has investments amounting to Sh8.2 billion.

State-funded private equity firm Norfund established a regional office in Nairobi in 2007 and has a portfolio of Sh23 billion ($230 million) in Kenya.

The Norwegian Office for Trade, Innovation Norway, opened its Nairobi hub in 2014 to act as a bridge for companies and entrepreneurs seeking growth opportunities in Kenya.

The Business Daily’s David Herbling spoke to Norway’s Trade minister Monica Mæland, who led a business delegation of 54 companies to Kenya from September 18-19. Here are the excerpts.

Kenya in 1990 suspended its diplomatic relations with Norway due to Oslo’s criticisms. What is the state of friendship between the two countries now?

The bilateral relations between Kenya and Norway are extensive and good. Norwegian entities have provided development assistance to Kenya for a number of decades.

Today, the focus of the Norwegian embassy in Nairobi is business promotion and support of the implementation of the Kenyan Constitution, with a particular emphasis on good governance, human rights and gender equality.

Why the increased interest by Norway’s pension fund and Norfund to invest in Kenya?

Kenya is attracting a lot of interest from the global business community, including from Norwegian investors and businesses.

I believe this is because Kenya has achieved an impressive economic growth over the past few years, and is expected to continue to grow substantially in the years to come.

Kenya also has a well-functioning market economy and financial services sector. Kenya is the economic and financial engine in this region.

Furthermore, you have a young work force with an entrepreneurial mentality and your investment in energy and infrastructure is impressive. Your beautiful landscape and wildlife is an added bonus.

What is the status of trade between Kenya and Norway?

Our bilateral trade in goods has nearly tripled since 2004, amounting to roughly Sh8.2 billion ($80 million) in 2014.

About 70 per cent of our bilateral trade is Kenyan exports to Norway. In 2014 Norway imported goods from Kenya worth Sh5.8 billion ($57 million). We exported goods worth Sh2.3 billion ($23 million).

The Norwegian import from Kenya is primarily plants, flowers, coffee, tea and spices, whereas 60 per cent of the Norwegian export to Kenya is chemical fertiliser.

Why should Kenyan businesses seek out new opportunities with Norwegian partners?

Norwegian companies are technologically advanced; we have a lot of experience in relevant sectors like renewable energy, aquaculture, and green growth.

And we are responsible partners. I assure you that Norwegian companies are rooted in a business culture of high standards. Corruption is not tolerated for any Norwegian firm. Indeed, in Norway corruption will be prosecuted, no matter where it happens – home or abroad.

Our aquaculture industry developed in the 80s and 90s. Today, our technological solutions are preferred by fish farmers all over the world.

How many Norwegian tourists visit Kenya and why isn’t Kenya a top destination for them?

Unfortunately, we do not have statistic of Norwegian tourists in Kenya. The Norwegian embassy in Nairobi has noted a small reduction in the number of Norwegian tourists visiting Kenya over the past few years, however Kenya remains a popular tourist destination for Norwegians.

Kenya is set to join the league of oil producing countries. What can Kenya learn from Norway’s sovereign fund made up of oil cash?

First, building an oil and gas industry is not done overnight, it takes time from the first investments until you receive revenues.

Norway produced oil and gas for 20 years before the Government Pension Fund was set up in 1990. During these 20 years, we invested most of the oil revenues in education, technology and society.

To build a local industry, it is necessary to invest in local competence building. At the same time, we relied on international expertise.

Rather than restricting the number of expats, we made sure that the international competence was transferred to our local work force.

Which are the areas of economic co-operation between Kenya and Norway and give examples on ongoing projects/collaborations

Several Norwegian business are either considering, or already engaging in, local partnerships across a broad range of sectors, such as water management, agribusiness, ICT solutions, property development and retail industry.

During my visit to Nairobi on the 18th of September, I was able to visit one of the collaborations that has been going strong for several years now, namely the partnership between the Kenyan flower producer Penta Flowers and the Norwegian flower importer Mester Grønn. 

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