Kenya signs Brazil as new economic partner

By Patrick Githinji

Kenya has added Brazil as its new economic partner.

The move comes barely five years after the country reviewed its economic partnership with India, Europe and the US while bringing China on board.

Last week, Brazilian President Luiz Inacio Lula Da Silva and Presiden Kibaki sealed six agreements that will see the two countries cooperate in trade and development.

The pacts revolve around investment opportunities in agriculture, education, manufacturing, energy, ICT, housing and exploration of natural resources.

The countries’ trade ties shall further be deepened through a weeklong Kenyan week in Brazil and vice versa at the end of the year, and high level visits to enhance mutual understanding, friendship and co-operation between the duo in all fields.

"I have come to discover the opportunities that exist here, what we can buy from Kenya and what we can sell, and what we can do to improve the quality of air we breathe by diminishing green house gas emissions," Da Silva said while wooing Brazilian companies to invest more in Africa.

He urged Kenyans to exploit business opportunities in Brazil as well as Southern America through increased exports.

"Now is the time to diversify exports from Kenya to Brazil and to stimulate Brazilian investments in Kenya," Da Silva said.

"This is why I came, followed by Brazilian business delegations that are interested in establishing partnerships and identifying business opportunities."

To fuel the commercial ties between the two nations, Da Silva said Nairobi will be the landing point of Brazilian Airlines to the continent.

tourism activity

The airline will connect Nairobi and Sao Paulo, thereby shortening the distance and time consumed aboard any flight to South America.

Apart from increasing business activities, Trade Minister Amos Kimunya said the airline would also increase tourism activity into the country. Kimunya said Kenyans are poised to benefit more from Latin America compared to its traditional economic partners.

Technical expertise

Given that Brazil is the world’s leading ethanol exporter, Kimunya said this would help Kenya produce bio-diesel, a move President Kibaki has always advocated.

"Kenya is especially keen on exploiting Brazilian advances in the area of biodiesel technology," Kibaki said.

"Brazil is a world leader in this field and Kenya stands to gain as we seek ways of becoming more efficient in our management of the energy sector," Kibaki said.

"Kenya is entering the ethanol fuel market in September following the release of a formula that will see petroleum blended with ethanol at the ratio of 85:15."

This, Kibaki said, will attract smaller companies interested in investing in the local markets, rather than in producing commodities. Economists have noted a growing diversification of Brazilian interests in trade and investment, both in terms of companies and sector.

HACO Industries Managing Director Polycap Igathe says manufacturers will benefit more by getting cheap raw materials from South America, with Brazil on board as a new economic partner.

"Kenyans should also take advantage of the new market since it will serve as an entry point to the eighth largest economic market in the world."

The two nations are also expected to share technical expertise and equipment on manufacturing and mining.