Kenya to gain a lot from Tokyo summit

Nairobi will host the sixth Tokyo International Conference on Africa’s Development (TICAD) on August 27–28, 2016. It will be the first time the TICAD summit will be held in Africa. Kenya is becoming the regional multilateral diplomacy hub as it continues to host high-profile summits.

Last year, the country hosted the Global Entrepreneurship Summit in July and the World Trade Organisation ministerial conference in December. The same trend has picked up this year as Nairobi hosted the second United Nations Environment Authority (UNEA) in May and the 14th session of the United National conference on Trade and Development in July.

Established in 1993, the two main objectives of the TICAD process include promotion of high-level policy dialogue between African leaders and their partners; and mobilisation of support for African-owned development initiatives.

The TICAD VI summit will focus on the theme, ‘Advancing Africa’s sustainable development agenda – TICAD partnership for prosperity’. The Nairobi summit is expected to build on various resolutions made during the TICAD V in 2013, which had focused on six issue areas. They included boosting economic growth; accelerating infrastructure and capacity development; empowering farms as mainstream economic actors; promoting sustainable and resilient growth; creating inclusive society for growth; and consolidating peace, stability, democracy and good governance.

It is, therefore, timely that the TICAD VI in Nairobi will be centred on three thematic areas including; promotion of structural economic transformation through economic diversification and industrialisation; promotion of resilient health system for quality of life; and promotion of social stability for shared prosperity.

As a host of the TICAD VI summit, Kenya stands to gain enormously in a number of ways. Definitely, hospitality, tourism, aviation and taxi service sectors will benefit from over 10,000 delegates attending the meeting. Nairobi will also enhance its status as a hub for multilateral diplomacy. On the other hand, Kenya-Japan relations will be boosted as the leadership of the two governments might engage in deepening bilateral ties.

The cordial relations between Nairobi and Tokyo have led to cooperation in various fields including trade, investment, energy, education, healthcare, infrastructure development, agriculture, human resource development, peace training and people-to-people exchange programmes. Promotion of structural economic transformation through economic diversification and industrialisation is critical to Kenya at a time when the country has given priority to economic diplomacy that is geared towards the realization of the Vision 2030 and other development programmes. How will Kenya benefit from the TICAD process in trade, industrialisation, investment, infrastructure development and tourism?

Tourism is one of the key sources of foreign exchange for Kenya. In recent years, the sector’s performance has been adversely affected by insecurity associated with terrorism attacks, travel advisories and Ebola outbreak in West Africa. Japanese tourists to Kenya decreased from 22,400 in 2013 to 10,500 in 2015. It is likely that the security and health concerns might have contributed to the decline.

In the last ten years, Kenya has made modest gains in attracting tourists from emerging economies. As Kenya and Japan deepen their bilateral cooperation, attraction of more tourists from Japan could be part of the country’s strategy in exploring both traditional and new tourism source markets in the East.

Though trade has increased between Kenya and Japan over the years, the persistent trade imbalance heavily favours Japan. For instance, value of Kenya’s imports from Japan increased from Sh56.6 billion in 2011 to Sh88.2 billion in 2015. On the other, Kenya’s exports to Japan increased from Sh2.3 billion in 2011 to Sh4 billion in 2015.

Kenya’s exports to Japan comprise mainly tea, fish fillet, coffee, nuts, raw tobacco, sisal and textile fibres and cut flower while Japan’s exports to Kenya include vehicles, auto parts and engines, iron and steel products, machinery and rubber tyres. It is critical to explore how Kenya could increase its exports to Japan to address the problem of trade imbalance.

Since industrialisation has been identified as an important tool for economic growth and diversification, deeper cooperation with Japan could play a significant role in the realization of Kenya’s industrialisation agenda. In the last decade, Kenya’s manufacturing sector has been stagnated at about 10 per cent of the country’s Gross Domestic Product (GDP).

An aggressive industrialisation policy and its successful implementation are likely to lead to job creation, economic growth, diversified economy and increase in industrial exports. Kenya should identify key areas of cooperation with Japan that could be instrumental in enhancing its agro-processing and small and medium manufacturing sectors.