ICT deals top agenda for US tycoons on scouting mission in Nairobi

US President Joe Biden.

Photo credit: File | AFP

American tycoons are seeking deals in ICT, renewable energy, agricultural technology, apparel, and textiles sectors ahead of next month’s President William Ruto’s State visit to Washington.

The businessmen, accompanying a high-level delegation dispatched by President Joe Biden on a two-day annual American Chamber of Commerce (AmCham) summit in Nairobi, are set to announce multibillion-shilling deals with Kenyan firms, organisers said on Wednesday.

Commerce Secretary Gina Raimondo, who is making her first official visit to Africa, is leading the US delegation including 14 members of the President’s Advisory Council on Doing Business in Africa.

Top on the memorandum of understanding that Washington is seeking in Nairobi will be a partnership on artificial intelligence, which will provide the US with an upper hand in developing technology in Kenya over China.

Ms Raimondo told a press conference the deal on the disruptive AI technology will be the “first of its kind with an African country” and aims at promoting “collaboration with partners and allies to promote safe and responsible development and deployment of AI”.

The Biden administration is working with Kenya on improving Kenya’s investment climate to levels that will guide other African countries on the ongoing US-Kenya Strategic Trade and Investment Partnership (STIP).

This has come at a time when US manufacturers operating in China are escalating decade-long plans to relocate production lines after being rattled by supply chain disruptions that peaked during the Covid-19 curbs amid elevated trade tensions between the two world’s largest economies.

The rising cost of wages and on-and-off trade tiffs between Washington and Beijing have seen US firms in labour-intensive sectors such as textiles and furniture move production lines to other countries such as Indonesia and Bangladesh over the last decade.

A leader

“President Biden and his entire administration are deeply committed to a partnership with Africa which has the fastest-growing population, largest free trade area, and a diverse ecosystem,” Ms Raimondo. “We see Kenya as a leader in these efforts: a leader in business, technology, digitisation, policy innovation, and a model for engagement across sub-Saharan Africa.”

Washington has recently reported that its firms were finding it tough to win government deals in Kenya, alleging that officials at national and county levels pay attention to “foreign firms that are willing to ignore legal standards or engage in bribery of foreign firms”.

Kenya’s Cabinet Secretary for Investment, Trade and Industry Rebecca Miano said her ministry was working with the Treasury and other departments to deliver transparency and good governance in tendering.

Corruption in public procurement is seen as the “biggest industry” in Kenya, gulping down about a third of the annual budget (projected at about Sh3.9 trillion this financial year), according to estimation by former EACC chair Philip Kinisu in March 2016.

“We want to promote competition, we want to promote transparency so that American companies can have a fair chance and uptake of the tenders that are there. We will be working on a portal where we can post all the tenders and opportunities,” Ms Miano said.

“We have been informed that many times companies do not even know which tenders are available for them to participate in. We are working day and night to create a conducive environment and have the right information available and, thereafter, ensure that processes are well governed and competitive.”

Trade between the two countries was last year skewed in favour of the US which exported goods worth about Sh112.76 billion while buying merchandise valued at Sh64.26 billion largely under duty- and quota-free Africa Growth and Opportunity Act (Agoa), according to provisional official data.

Kenya has long sought a full free trade agreement with the US to replace the two-decade-old Agoa deal, but progress has been dragged by regime change in both countries.

The Agoa pact, first enacted in 2000 before renewal for 10 years in June 2015, allows duty- and quota-free access to the US for thousands of products like food and beverages, wood, plastics, and rubber from sub-Saharan Africa, but Kenya has largely tapped the apparel line.

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