Kenya seals deals worth Sh50b in the US

NAIROBI, KENYA: When the African delegation landed in the United States recently for the US-Africa Summit, Tanzanian business leaders were supposed to lead the group in all the negotiations. President Barack Obama had visited Tanzania recently in his African tour,  skipping Kenya, his father’s birthplace.

But this expectation was short-lived. After the first day of the summit, the focus shifted from Tanzania and indeed Africa as a whole to Kenya. Those in attendance say the summit turned from being US-Africa summit to a Kenya-Africa summit.

Perhaps driven by the Kenyans’ aggressiveness or the expected close ties between Kenya and the US, Kenya was to become, and remain, the centre of attention for the rest of the Summit. President Obama is also said to have expressed an interest to visit Kenya.

“It was a Kenyan affair,” said businessman Chris Kirubi of the summit he so highly rates as the most successful discussion Kenya has ever held with the US.

Apart from a basket of goodies that Kenyans came back with, the country has been able to get rid of the notion that it is leaning towards the East due to perceived dicey relationship with the West over the  International Criminal Court trials of President Uhuru Kenyatta and his deputy William Ruto.

“We neither look East or West, we look forward,” said Interior Cabinet Secretary Joseph Ole Lenku when he presented a report on the outcome of the meetings with the US officials.

BASKET OF GOODIES

With the newfound friendship, Kenya and the US seem headed for better days. According to Transport and Infrastructure Cabinet Secretary Eng Michael Kamau, the road ahead is clearer now.

“We managed to open the blinds, it is now more clear,” CS Kamau told a gathering in Nairobi when he presented his achievements from the trip in a high-powered meeting organised by the Presidency on Thursday morning.

The one-week summit that saw Kenyan officials and business leaders engage their American counterparts has nether been a waste of time nor resources. Kenya managed to seal a number of deals and potential deals and agreements that Industrialisation and Enterprise Development Cabinet Secretary Adan Mohamed quantifies to be in the range of Sh50 billion.

And if the promises from the US side are anything to go by, the deals could run into hundreds of billions of shillings in the next few years, including a Power Africa Initiative. The summit ended with a commitment from the Obama administration to more than triple the support under the Power Africa initiative - from the previous figure of Sh609 billion ($7 billion) to Sh2.2 trillion ($26 billion) - a figure way above the Kenyan budget of Sh1.8 trillion. Six African countries are competing for this funding - meaning that each country can get up to Sh377 billion, assuming it is shared on an equal footing.

MASSIVE FUNDING

Power Africa has an ambitious goal of adding more than 10,000 megawatts (MW) of cleaner, more efficient energy generation capacity in sub-Saharan Africa. This increased capacity will make it possible to provide electricity access to 20 million new households and commercial entities in sub-Saharan Africa, with on-grid, small-scale, and off-grid solutions.

Kenya says it is ready to face Nigeria, Ghana, Ethiopia, Tanzania and Liberia in the race for the massive funding opportunities. “In my view, the power sector was of one the biggest winners,” said Energy and Petroleum Cabinet Secretary Davis Chirchir. “But as Kenya, we have to compete for those funds.”

Already, the Government had announced an ambitious programme to generate an additional 5000MW of electricity in the coming few years. With funding, US companies are expected to troop into the country seeking a piece of the 5,000MW programme. Key projects earmarked for support under the Power Africa initiative from the start include the 300MW Turkana Wind power project, the 61MW Kinangop wind project, 100MW Kipeto power plant and another 10MW biomass project. There is also an additional 300MW of geothermal power to be developed from Lake Bogoria.

Kenya also got a major boost in the infrastructure side with the  US Export-Import Bank agreeing to fund General Electric to the tune of Sh34.8 billion ($400 million) for the development of commuter rail projects,  aimed at decongesting the city. Exim Bank also committed to provide financing for security equipment by supporting US companies operating in the areas like airport security.

DIRECT FLIGHTS TO THE US

Kenya’s prowess to lobby was further confirmed by the authorities’ ability to convince multi-billion companies such as General Electric, Boeing and Delta Airlines to push for the introduction of direct flights between Kenya and the US. Delta had in 2009 planned a direct flight to Nairobi but was cancelled in the last minutes, due to insecurity concerns.

But this dream now seems a reality, thanks to the US trip with high hopes that Kenya will be graduated into a category one country by the US National Transport and Safety Authority in their ongoing audit. “By early next year, we should have a direct flight from the US either by Delta or Kenya Airways,” said Eng Kamau. Kenya pegs the push for direct flights between the two countries on the fact that it hosts the biggest US Embassy in Africa as well as key United Nations agencies such as United Nations Environmental Programme (Unep) and UN Habitat.

EXTENSION OF AGOA

The summit also reached a major milestone towards the much needed extension of the so called Africa Growth and Opportunity Act (Agoa) that expires in September next year. The agreement allows an access of over 6,000 African goods duty free into the US market, key among them textiles and leather. Agoa had helped Kenya generate billions in revenues and jobs every year.

Last year, Kenya overtook Lesotho to become the biggest exporter of goods to the US under Agoa, raising Sh2.9 billion ($33.5 million) and helping create over 40,000 jobs. Africa constitutes a paltry 0.3 per cent of the value of exports to the US but there are plans to increase this to one per cent in three years, raising Sh87 billion ($1 billion) in export values from Kenya alone. “In principle, the extension has been agreed,” said CS Mohammed. “If these programmes are not extended, we could suffer some shut-downs.”

ENHANCING SECURITY

The US government announced a new initiative on security governance with six African countries among them Kenya in a programme, that will run for the next three and five years. It will provide strategic and sustained partnership to security sector governance and the development of both military and civilian sector institutions. The US will work with each country to among others conduct a joint assessment of security threats and opportunities. This comes on the backdrop of escalating insecurity in Africa and especially in Kenya with the constants attacks from terrorists.

KENYA POLICE

According to a brief prepared by Ole Lenku, Kenya and the US also signed a customs mutual assistance agreement to provide both customs administrations the legal framework for the exchange of information to assist in the prevention, detection and investigation of customs offences and crimes associated with goods crossing international borders. This agreement, which has been negotiated for the last seven years, will help to address issues such as duty evasion, trafficking, money laundering and terrorism related activities. “We will now start to see more participation of US firms in communication,” said Ole Lenku.

US technology giant IBM has already installed a command and control centre for the Kenya Police. IBM has also committed to develop a targeted curriculum on intelligence law enforcement, information management and big data analytics, cyber security and mobile computing for new recruits joining the Kenyan police force.

According IBM’s representative in Kenya Nicholas Nesbit, the programme, which will commence next month with the next intake of police recruits at no cost. The summit saw Ole Lenku meeting with senior officials of the College of Computing, Mathematical and Natural Sciences at the University of Maryland to explore how technology such as mathematical data, pattern analysis and how unmanned aerial vehicles could be used to fight crime such as poaching, terrorism, cattle rustling and organised crime. A team from the university is expected in the country next month.

RESUMPTION OF PEACE CORPS OPERATIONS

Kenya also managed to lobby the Peace Corps Association to reconsider its decision to suspend operations in Kenya over security concerns.