US envoy: How Kenya can be the Singapore of Africa via industries

US Ambassador to Kenya Meg Whitman. [Collins Oduor, Standard]

US Ambassador to Kenya Meg Whitman has fronted manufacturing as one of the sectors that will position Kenya as Africa’s economic powerhouse.

The manufacturing sector, which contributes just 7.2 per cent to the country’s gross domestic product (GDP), has the potential to expand the economy and provide millions of jobs to Kenyans, according to Ms Whitman.

President William Ruto’s administration targets to grow the GDP contribution of manufacturing to 20 per cent. The envoy, while addressing the ongoing American Chamber of Commerce (AmCham) Business Summit in Nairobi, particularly showed interest in the apparel sub-sector.

This is because there is already a market in the United States with apparel and textiles being the leading exports from Kenya to the US.

She said big clothes brands like Levi are sourcing their products from the country “and many more will come.”

But to ensure Kenya maximises this opportunity, Whitman noted the need to revitalise cotton farming that was once booming in the country.

She pointed out that in the 1980s, Kenya was producing 38,000 tonnes of cotton seeds annually, which now stands at 2,000.

“There is a tremendous opportunity to vertically integrate the apparel sector from seed to thread,” she said.

Whitman said there is no doubt that Kenya’s business climate is improving but there are still milestones to be covered if the country seeks to be pivotal in the continent.

“If Kenya is truly to become the Singapore of Africa, it would need to grow GDP between six and eight per cent every year and create one million new good paying jobs every single year for the next 10 years,” said the envoy.

“But more reforms are going to be needed to reach that goal and unlock Kenyan innovations and the United States is committed to partnering with Kenya to keep moving forward.”

She said Kenya is the best place to start and grow a business in Africa.

“There is more evidence that the business climate is improving. It underscores that Kenyans are natural entrepreneurs,” she said.

Tourism and the creative industry are other sectors that the envoy said have the potential to transform the country’s economy.

“Tourism, which Kenya is known for is 10 per cent but think about the opportunities in the creative sector,” the ambassador said.

Trade, Investment and Industry Cabinet Secretary Rebecca Miano said with this year’s AmCham summit having attracted more businesses, Kenya is expected to gain more in strategic areas including ICT, digital economy, agriculture, renewable energy and health.

“They all resonate well with the Bottom-up Economic Transformation Agenda.” 

CS Miano said Kenya has had a pleasant relationship with the US and in the previous AmCham, Kenya Investment Authority (KenInvest) signed an agreement with the US Chamber of Commerce to establish dialogue towards addressing trade bottlenecks between the two markets.

Joint investment promotion, joint commercial activities, convening quarterly US-Kenya business dialogues, and business climate reforms are the areas covered in the MoU.

“We have developed a three-year strategy rollout. We have a plan and budget which will enable KenInvest to deliver its services to meet the objectives of the MoU,” Miano said.

Trade between Kenya and the US shows an increase in the value of exports from the country over the years, she added. 

“Kenya imports from the US, just like exports to the US have also increased over the years.

“Kenya has been experiencing a negative balance of trade with the US all along although the trade deficit narrowed significantly in the last few years, especially in 2022.”

She expressed confidence in the renewal of the African Growth and Opportunity Act (Agoa), which expires end of 2025, that Kenya and other qualifying Sub-Saharan countries are using to access US markets. 

Additionally, Kenya is currently negotiating for a strategic trade and investment partnership with the US which once effected, will support businesses besides Agoa. “Several rounds of negotiations have taken place and substantial ground has been covered,” said the CS.