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Chinese investors are now gearing up to set up manufacturing industries worth billions of shillings in Kenya and other African countries. Recently launched, the African Chapter of the American Chinese CEOs Society (ACCS) in Nairobi announced that they will engage executives and decision makers of Kenyan companies as an entry point to establishing more manufacturing companies in the country.
According to the Society’s President Robert Sun, the huge interest to invest in the country has been informed by Kenya’s over-reliance on the agriculture sector, whereas there is a huge potential for industrialization in the country. The purpose of the society’s mission is to work together with the government and local companies to bring Chinese manufacturers into Kenya for industrialization. Kenya is still an agricultural country and imports many agricultural products, the target is to have Chinese industrialists who have trade connections with the United States of America because they can benefit from Kenya’s treaty with America through the African Growth and Opportunity Act (AGOA). Under this treaty, eligible Sub-Saharan African countries are provided with duty-free access to the U.S market for over 1,800 products. This is in addition to the more than 5,000 products that are eligible for duty-free access under the Generalized System of Preferences program.
Accordingly, Sun says that ACCS is in discussion with the Kenyan government through the Ministry of Trade to facilitate the realization of the society’s development agenda in the country which complements President Xi’s undertaking. Kenya is an open forum when it comes to international investments. It offers some special treatment regarding taxation, especially around Export Processing Zones (EPZ) and the subject of land policy guiding foreign investors. Kenya has also good accessibility to the African market given that most of the trade barriers in the African countries have been dealt with.
With more manufacturers coming on board, Kenya will reduce the importation capacity, as more products will be produced locally. Consequently, prices for most of the products in the country will be reduced for Kenyan consumers. According to data published by the Kenya Trade Network Agency (Kentrade), in the first quarter of the financial year 2023/2024, Kenya imported goods and services worth Ksh 258.7 billion. This figure represents imports of 10 products that play a pivotal role in sustaining Kenya’s multifaceted needs ranging from energy resources to agricultural staples.
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The heightened lobbying of China to invest in Kenya comes in the wake of a report released by the Kenya National Bureau of Statistics this year which indicates that there is a substantial drop in direct investment in Kenya from China with statistics indicating that Beijing’s investments in Kenya fell by more than a third over the last three years, yet, investments over the same period from the US increased slightly to 7.4% from 7.1%.
The data shows that between 2020 and 2022, Chinese expenditures in Kenya’s construction sector, which is China’s leading area of foreign investment in the country, dropped more than 34%.
