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Economy

Britain woos Kenya with Sh170bn deals in summit

Prime Minister Boris Johnson
Britain’s Prime Minister Boris Johnson (front, centre), with other African, United Nations and IMF leaders during the UK-Africa Investment Summit in London January 20, 2020. PHOTO | AFP 

British Prime Minister Boris Johnson on Monday pitched £1.3 billion (about Sh170 billion) business opportunities to a Kenyan delegation led by President Uhuru Kenyatta at the inaugural UK-Africa Investment Summit held in London as the United Kingdom charts its post-Brexit economic ties.

A statement by the British High Commission in Nairobi said the deals cutting across housing, finance, renewables, and entrepreneurship “will create a new lasting partnership that will deliver more investment, jobs and growth to Kenya.”

The summit came at a time British corporate giants in Kenya such as Barclays, British luxury carmaker Land Rover, Standard Chartered Bank #ticker:SCBK, British American Tobacco #ticker:BAT and Unilever are struggling to fend off a stiff challenge from aggressive rivals.

Kenya’s preference for countries in the Far East for business and development financing under retired President Mwai Kibaki’s reign and later Mr Kenyatta has dislodged European power-houses including the UK from long-held positions as the leading sources of foreign direct investment (FDI).

As part of the deals announced Monday Kenya is set to benefit from a £30m (Sh3.9 billion) investment in affordable energy-efficient housing, which will see the construction of 10,000 low-carbon homes for rent and sale.

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Additionally, the East African Breweries Limited (EABL) #ticker:EABL, which is controlled by Britain’s Diageo, will invest £167 million (Sh21.9 billion) “to build state-of-the-art, environmentally friendly breweries in Kenya and wider East Africa,” said the British High Commission in Nairobi. It was not immediately clear whether the funds would upgrade EABL’s existing breweries or set up new ones.

In 2017, Diageo had already invested £120million (Sh15.7 billion) into EABL’s Kisumu Brewery.

The UK also announced that it would support design of a new facility “to plan, deliver and support finance to a range of infrastructure projects across Africa including Kenya that are attractive to businesses and investors.”

“Sustainability will be central to these new infrastructure projects, focusing on investments with low carbon emissions and projects that will be resilient to a changing climate,” said the High Commission.

Mr Kenyatta while the attending the summit urged UK investors to use Kenya as a gateway to investing in Africa and a bridge to the emerging market of more than 1.2 billion people created by the African Continental Free Trade Area.

“There is probably no better time for African nations and the UK to explore new and innovative ways of deepening the long-standing partnerships that have existed between our nations,” President Kenyatta said on the sidelines of the summit, when he rang the bell to kick off the trading of Kenya’s first green bond at the London Stock Exchange.

China has become Kenya’s leading source of FDI through investment in infrastructure, a move which has continually consolidated its new-found economic clout in the country.

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