By JOHN NJIRAINI
This sign probably says it all; 'Bear with us today for a better tomorrow'.
To most Kenyans using Thika Road, the sign by China's Wu Yi, Syno Hydro and China Overseas Enginering Corporation that are transforming the busy road to a super highway cannot be more than assuring.
"The traffic jams are unbearable today but when you see what is coming up, there is no doubt about a better future," said Charles Wanjau, a user of the road.
But not everybody is happy with the Chinese coming to Kenya.
The Government has rewarded China with numerous huge infrastructure projects. [PHOTO:FILE] |
According to cables dubbed Chinese Engagement in Kenya, from the US Ambassador Michael Ranneberger, China has literally staged a well-calculated coup against Western powers and taken a place on the high table, as the new darling of Kenya’s ruling elite.
In the process, the Asian giant that has since overtaken Japan as the world’s second leading economy after the US, is controlling all major contracts in the country in infrastructure development besides being a major trading partner and donor.
Take for instance in trade. Statistics by the Ministry of Trade indicate that Comesa remains the single largest trade destination for Kenyan goods, accounting for Sh113 billion of last year’s exports against imports of only Sh25 billion in 2008.
In the same year, Kenya’s exports to the European Union accounted for Sh100.3 billion against total import bill of Sh171.9 billion.
To the US, Kenya’s exports accounted for a mere Sh27.4 billion against imports of Sh35.2 billion. This was irrespective of the fact that the US has granted Kenyan goods concessions under the African Growth and Opportunity Act plan.
Though there exists a huge trade imbalance between Kenya and China, the country’s exports accounted for Sh2.3 billion but the imports accounted for Sh73.3 billion.
"China’s engagement in Kenya continues to grow exponentially. China enjoys a large trade surplus with Kenya exporting more than 30 times its imports," said Ranneberger, adding the activities will continue to grow given Kenya’s strategic location.
But how did China, a country that only 30 years ago was on the periphery of global affairs, emerge to be a major player in Kenya to the discomfort of the US and the EU?
Is China’s rising influence in the country healthy for the country’s long-term development? Experts say China’s conquest in Kenya must be viewed on the premise of the country’s aggressive push to become a major world power spreading its tentacles of influence far and wide.
The drive, conceived 30 years ago, came about following the launch of a series of a policy shift and economic reforms that saw the country relax its strict communism economic policies and allow private businesses.
Economic growth
Since then, China’s economy has been growing at an average of 10 per cent — three times the global figures.
Today, China has expanded to be the world’s biggest exporter ahead of Germany.
It is also the world’s leading energy consumer having overtaken the US. In the process of the spectacular transformation, China decided to court nations that it presumed could help on its way up whilst burying its head in the sand on the face of governance.
Driven by a soft power diplomacy, the country has managed to endear itself to African leaders who have consciously become tired of the West’s constantly hammering them on corruption, good governance and reforms.
This it does on the understanding that Africa is endowed with vast resources that can furnace its burgeoning manufacturing sector whilst also offering the products a ready market.
"China has been silent on the implementation of reforms in Kenya, which we consider essential to future stability and prosperity," said Ranneberger.
It is due to this wanting silence that the Government has rewarded the country abundantly with numerous huge infrastructure contracts.
Besides the three Chinese companies transforming Thika Road at a cost of Sh25 billion, China National Aero-Technology International Engineering Company is undertaking the second phase of a project to upgrade the Jomo Kenyatta International Airport.
China Wu Yi, undertook the first phase. TBEA International, a Chinese firm, is developing a 120 MW thermal plant in Longonot and 600 MW coal-fired power station in Mombasa as an independent power producer.
TBEA is also undertaking projects that involve construction of 132 KV lines and sub-stations in the Rift Valley, Central, Western and Coast provinces.
Great Wall Drilling, another Chinese company, is exploring for geothermal energy in the Rift Valley, while China National Offshore Oil Company drilling the deepest well in Isiolo in search for oil though it turned out to be dry.
China’s Shengli Engineering Construction is currently refurbishing the Moi International Sports Complex at Kasarani at a cost of Sh1 billion, money from China.
But the biggest deal that China is most likely to clinch is the construction of a second port in Lamu.
It has strategic interests in the port, which the Government is desperately determined to put up.
Though Kenya has identified it as a catalyst for growth, China intends to use it in transporting oil from Sudan.
"China’s interest in the Lamu project is reportedly linked to the presence of oil in Southern Sudan and Uganda, which could be exported via Lamu as well as the greater export potential to Ethiopia, Southern Sudan and Uganda," said the cables from Nairobi.
Yet the big question, not for disgruntled US but for Kenyans, is whether China’s unparalleled engagement is good for Kenya in the long run?
"Kenya’s leadership may be tempted to move ever closer to China in an effort to shield itself from Western, and principally US pressure to reform," says Ranneberger.
But viewed in a more critical aspect, China’s engagement in Kenya, though largely positive, has also come with detrimental effects to the economy.
There is no denying, for instance, that China has significantly contributed in destroying numerous local companies due to influx of cheap products, counterfeits and substandard ones.
Only recently, Eveready East Africa, a company tottering on the brink, announced a 65 per cent drop in profit before tax for the year ended September 30, blaming the loss on illicit dry trade in the country including sub-standard products and dumping.
And considering that Kenyan manufacturers lose a staggering Sh50 billion while the Government loses Sh20 billion in revenues due to illicit trade, it is contradictory for the Government to put in measures to tackle the menace, while allowing China to have a field day.
Another downfall of China’s engagement in the country revolves around its tendencies to export Chinese experts to implement all projects in its docket.
While it is understandable the nation want to guarantee quality work, the huge number of expatriates could be helpful to Kenya if they engaged in technology and expertise transfer.
