China opens multi-billion-shilling purse for Kenyan projects

Chinese Premier Li Keqiang inspects a guard of honour mounted by Kenya Defence Forces at the official welcoming ceremony.[Photo: PSCU]

By FELIX OLICK

Kenya: China has opened a multibillion-shilling purse to fund various trade deals that will culminate in the signing of 17 memoranda of understanding and agreements.

President Uhuru Kenyatta Saturday signed 15 MoU’s with Chinese Prime Minister Li Keqiang who is in the country for a historic three-day visit making the Eastern super power one of the leading direct foreign investors in the country.

The agreements will cover a wide range of areas, including financing for infrastructure, agriculture, wildlife conservation, health, water and environmental conservation as well as sports, culture and the arts. The loan instruments to facilitate the Sh327 billion Standard Gauge Railway will be signed today in the presence of five heads of States from the East African Community. President Uhuru will be joined by other Heads of State: Yoweri Museveni (Uganda), Jakaya Kikwete (Tanzania), Paul Kagame (Rwanda), Salva Kiir (South Sudan) and a representative of the government of Burundi – for talks with the Premier centered on developing regional infrastructure.

Among the memoranda signed yesterday were those on economic and technical co-operation that will see Kenya benefit from multi-billion-shilling grants and interest-free loans from the government of China.

Coded message

Addressing a joint press conference after the bilateral talks yesterday, President Uhuru appeared to send a coded message to the West, saying: “Kenya has a new and able partner in our march to progress and prosperity. With implementation of this (SGR) and other flagship projects in cooperation with public and private partners, China has secured a place of honour in the history of Kenya’s economic development”.

The two have already agreed to set up a Bilateral Advisory Council for constant engagement, implementation as well as monitoring and evaluation especially on concluded pacts.

Yesterday, Mr Keqiang announced Sh850 million for the protection of wildlife in four African countries including Kenya, emphasising that “China will always remain Kenya’s true friend”. “We are keen in boosting co-operation in all spheres,” said the PM who is accompanied in his tour by a delegation of about 300 businessmen and senior State officials. The Premier also pledged his support for regional peace and security that would be a major boost to Kenya as it battles Al-Shabaab and other terrorist groups. “China as we all recognise, possesses substantial political, diplomatic and financial assets, which, if fully applied, would be a game-changer in the region’s peace and security efforts,” Kenyatta remarked. Keqiang also promised to assist in repatriation of Somalia refugees from Kenya as well as humanitarian assistance to South Sudan.

In his speech, the Mr Keqiang hinted that he is yet to make a major announcement saying, “The best part is to be saved for the last”.

His wife, Mrs Cheng Hong donated 40 desktop computers, 10 Lenovo tablets and 10 digital cameras to Joyful Women Organisation, a women’s empowerment group.

Already, Kenya and China have signed a MoU regarding cooperation in the aviation industry in Kenya and the wider East African region.

And following complaints of trade imbalance, the PM who is visiting Kenya for the first time announced that his government will take deliberate efforts to ensure that Kenyan products penetrate the Chinese market. He said Kenya will be invited to major Chinese trade fairs to market her goods and services adding that his government was ready to assist Kenya in the establishment of industrial parks to add value to its produce.

Raw products

“It is true that at the moment there is a trade imbalance. We need to see more Kenyan products in the Chinese market,” he acknowledged.

While Kenya’s imports from China account for about Sh270 billion, its exports amount to Sh4.2 billion, skewing the balance of payments heavily in favour of China. Much of Kenya’s exports are raw products mostly agricultural.

These include vegetables, skin, leather and textiles which offer lower revenues when compared to imports from China such as vehicles, spare parts, electronic goods and high value products such as iron and steel and ready made apparel. A memorandum on investment promotion was one of the agreements signed between the two governments. Mr Keqiang and his delegation arrived in Kenya on Friday night aboard an Air China aircraft amid tight security at the Jomo Kenyatta International Airport.

He was received with song and dance momentarily bringing business at the usually busy airport to a standstill. The President, his Deputy William Ruto and a host of senior government officials received him at the airport before being driven in a long convoy to the city. At State House yesterday, the Chinese PM was given a 21-gun salute by the Kenyan military symbolising the significance of his visit. Cabinet Secretaries and parastatal chiefs, most of whom are signatories to the deals, were also present at State House. Mr Keqiang kicked off his African tour on May 4 and has visited Ethiopia, Angola and Nigeria where he attended the 24th World Economic Forum in Abuja.

The visit by the Chinese Premier is also loaded with international symbolism to the West, signifying an apparent shift in Kenya’s foreign policy. Prior to the March 2013 presidential ballot, Western governments indicated that they would be unhappy if President Uhuru and Ruto were elected, given the ICC charges of crimes against humanity they are facing.

The US warned of “consequences” if they won, while Britain said it would maintain only “essential contacts” with the duo as long as they faced trial in The Hague.