Japanese seek trade pacts with Kenya

DP William Ruto (left) with Japanese volunteers at his Karen Residence recently. Japanese firms are eyeing to fund infrastructure projects in Kenya. (Photo: DPPS)

President Uhuru Kenyatta will Thursday morning hold a meeting with top executives of Japanese multinationals who are in Nairobi seeking a slice of investment opportunities, a month after a similar visit by their American rivals led by US leader Barack Obama.

Chief executives representing 84 conglomerates, including Toyota Tsusho and Mitsubishi, are in the country to fight for a share of emerging opportunities in both the public and private sectors that have caught the attention of the World’s top two economies, US and China.

Japan, the third largest economy in the World, was keen on grabbing part of the ongoing and planned mega infrastructure projects including the Sh3 trillion-worth Lamu Port South Sudan-Ethiopia Transport project.

“We convinced them to come here in our previous visit to Tokyo, and they are to look for the right kind of investments for their respective companies,” Amb Amina Mohamed, the foreign affairs Cabinet Secretary said.

Wednesday’s daylong meeting held at the Serena Hotel brought together business executives from Japan and their local counterparts. Japan is the source of top three vehicle makes in Kenya and the balance of trade is heavily against Kenya which exports comparatively low value commodities consisting tea, coffee and cut flowers.

In Thursday’s meeting at State House, the Japanese are expected to reveal commitments that they could be making in both investments and business. China has specifically made major inroads in the upcoming infrastructure projects including the Sh300 billion Standard Gauge Railway linking Mombasa and Nairobi, with the expectation that the project would be extended to Kampala and later Kigali.

Dozens of other huge projects in ports, roads and housing have also been grabbed by the Chinese, which saw the US fall behind in involvement in Kenya’s transformation that came with lucrative opportunities.

Top officials who attended the meetings where Kenyatta hosted President Barack Obama said the US had been unsettled with the trend. It was on that premise that the US signed memoranda to fund American firms in a turn that would enable them compete on the same level as the Chinese which are State-owned and therefore had access to unlimited sources of financing.

The Japanese have been involved in the design of the Hoima-Lokichar-Lamu crude oil pipeline and are also involved in the expansion of the Mombasa Port. In the Mombasa container terminal however, Japan has protested on possible exclusion and responded by threatening to withdraw funding for the project.

Japan International Cooperation International informed the National Treasury that it would consider withdrawing future assistance if its concerns relating to the formula used to select the operator of the container port.

Lapsset project

Ms Mohamed has since promised to clarify the government position relating to the standoff. She added that talks were already underway to launch direct flights to Tokyo, and more likely through the country’s stronger airline flying directly into the Jomo Kenyatta International Airport in Nairobi.

Foreign Affairs Permanent Secretary Karanja Kibicho invited the Japanese to consider investing in the Lapsset project, where the Chinese already have a grip and the American firms standing by.

Lapsset includes the construction of 32 berths at the mega sea port, a crude oil pipeline and refinery, a coal-powered power plant, a railway line terminating at the port and three resort towns along the route. Japan has set aside Sh3.2 trillion for investment in Africa, with Kenya angling to be the biggest recipient of the FDI.

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