This article first appeared in my column with the Business Daily on July 26, 2015
Kenya witnessed a media blitz around the visit of President Barack Obama and the Global Entrepreneurship Summit (GES). The POTUS’ visit in the context of the GES turned the global eye to our economic and business potential. Kenya should leverage on this opportunity and ensure that its bilateral talks with the US deliver the right type of strategic investment in the country.
Rather than getting caught up in side-line conversations on homosexuality, Government of Kenya ought to squarely focus on exploiting this opportunity. It should be looking to secure investment from US government and private sector in three core sectors – manufacturing, energy and business incubation.
Manufacturing in Kenya is undertapped and contributes a measly 10 per cent to the country’s GDP. The importance of the sector lies mainly in its role in sophisticating the export profile and increasing the forex earning potential of exports. Further, building the local manufacturing sector to create a diverse set of attractive products for local consumption will reduce reliance on imports and generate a healthier balance of trade. Thus the government should encourage the Obama administration and the US private sector to invest in existing industry and development of new plants.
Developing the manufacturing sector should be done in a manner that boosts agricultural base by tapping raw materials. Building local industries would also generate significant employment for Kenyans, thereby build disposable income creating stronger domestic demand for goods and services which then drives economic growth.
Secondly, the government should make a pitch for US investment in renewable energy technology such as wind, solar and hydro. Kenya has made it clear it is committed to building the country’s infrastructure; renewable energy and making it a green economy should be a core part of this.
The American government has already indicated its commitment to renewable energy in Africa through the US-Africa Clean Energy Finance initiative. Renewable energy is ideal for Kenya because it is relatively quick and cheap to deploy on a small scale compared with fossil fuels. Further, the US is an ideal partner in renewable energy as it is a global leader and dominates the world’s green investment, particularly solar and wind technologies. The government should ensure Kenya taps into this technical and financing pool through its talks with POTUS and the US private sector.
Finally, Kenya needs to be more aggressive in seeking investment to support business incubation. Incubation is crucial because it helps new and start-up companies develop by providing services such as training, mentorship, office space and networking opportunities. A thriving business incubation infrastructure supported by government will make important contributions to national and regional economic growth. By securing investment in business incubation, the government would enable thousands of incubated businesses to go on and achieve commercial success on a sound footing. The government could experiment with attracting investment from the US government and private sector into an incubation hub into which the parties invest through equity.
A focus on these three areas by the Kenyan government will ensure that the country has sound strategic direction as the visit from Obama and the GES closes.
Ms Were is a development economist. Email: email@example.com. Twitter: @anzetse