KENYA-UNITED STATES: Hopes Soar Following U.S. Envoy’s Visit

By Moyiga Nduru Reprint | | Print |

Moyiga Nduru

NAIROBI, Feb 23 1996 (IPS) - U.S. Commerce Secretary Ron Brown offered no handouts to Kenya when he visited here this week — at least, nothing like the 92 million U.S. dollars pledged earlier to Cote d’Ivoire for housing projects in its capital.

Still, the mood here was upbeat following his departure Thursday, with experts predicting that U.S. investment in Kenya should rise above the current level of about 285 million U.S. dollars as a result of the visit.

While Brown made no concrete promises, he had encouring words for the East African nation. “If Kenya continues with reforms, its annual economic growth rate will be raised well above the current five percent to seven percent and more,” he said.

Kenya was the third leg of an eight-day African tour which took Brown to Cote d’Ivoire and Ghana, and also includes Uganda and Botswana. The visit is aimed at boosting trade and investment ties between the United States and a continent which has long been Europe’s preserve.

He said in Accra at the start of the week that the disparity between the U.S. share of the African market and Europe’s (the United States accounts for eight percent of business done in Africa and Europe more than 40 percent) meant that the United States had to focus more attention on Africa.

Less than 10 percent of the 1,711 million dollars worth of goods Kenya imported in 1993 came from the United States. In that year, only 3.63 percent of Kenyan exports, which totalled 1.374 billion dollars, went to the United States.

Still, exchanges between Kenya and the United States have been increasing. Kenya’s exports to the North American country climbed from 23 million U.S. dollars in 1992 to 50 million dollars in 1993 and 55 million dollars in 1994.

Imports went up by 21 percent between 1992 and 1993 and amounted to 139 million U.S. dollars in 1994, according to the ‘Economic Survey 1995’ published by the Kenyan ministry of Planning and National Development.

But Moi had a complaint for the U.S. Commerce secretary. He wondered why China enjoyed ‘favoured nation status’ — which gives preferential access to the U.S. market — while Kenya, a U.S. ally during the Cold War, has not been accorded similar treatment.

He charged that the United States had put emphasis on political and economic reforms in Kenya because “we are a small country” and blamed this partly on foreign reporters based here. “There are some 150 foreign journalists in Kenya,” he told his U.S. guest. “They harp on things which hurt our image.”

While trade between the United States and Kenya has been increasing, investments appear to have fallen.

A business sector analyst told IPS that “U.S. investment (in Kenya) declined progressively by three-quarters over a period of one decade. Many U.S. firms like the giant Kentucky Fried Chicken pulled out of the country. Others have sold their share to Kenyans.”

However, he said some, like the ‘Pepsi-Cola Company’ are making a comeback. The giant U.S. firm is soon expected to launch an aggressive campaign to recapture the Kenyan market.

In recent years, the East African nation has been taking steps to encourage foreign investment, including the scrapping, in December, of exchange controls, which now enables investors to repatriate as much of their profits as they wish.

Moi said the reforms were now almost complete.

To improve the country’s image, his government has also been cracking down on corruption, including a clean-up operation at Mombassa port, where some 30 senior officials have been sent on compulsory leave and others charged with conspiracy to defraud the government of millions of dollars in tax revenue.

The Kenyan president got a pat on the back from Brown for his government’s anti-corruption effort. According to the U.S. Commerce Secretary, ‘it will benefit the people of Kenya and the region’.