Kenya, China to pursue trade opportunities through OBOR

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By Eric Biegon in Beijing, China

Nairobi has announced that it will henceforth lead a hunt for more trade opportunities with Beijing through the newly established Belt and Road economic framework.

Kenya’s trade & industrialization cabinet secretary Adan Mohamed says the 21st century Silk Road economic belt which is originating from China will involve trillions of dollars of investments in major significant projects in each of the regions covered.

He insists that Kenya and Africa will benefit significantly from being connected to the biggest economies of the world such as China, citing mega projects that have so far been completed under the initiative.

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“Connectivity is so critical. For us, we see projects such as the Standard Gauge Railway and the development of the port of Mombasa as crucial, where possibly the maritime route will terminate from the rest of the world before it reaches into the mainland of Africa.” He said.

Mohamed, who was part of the delegation which graced last month’s Belt and Road Forum in Beijing, says the program is particularly a landmark to Kenya given that one of the entry points into the continent will be passing through Mombasa.

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“It is really a transformational project that would have a major impact on infrastructure not only in Kenya and Africa but globally.” He said.

Being part of the framework, the industrialization minister disclosed that Kenya will utilize the opportunity to expand trade with China and other large economies that have so far enrolled in the program.

He says for a long time, for example, Kenya has not had a free trade arrangement with China, disclosing that trade balance between Beijing and Nairobi has been in favor of the Far East economic giant.

He lauded the latest platform saying it now enables the two countries to discuss trade and how to open up the Chinese market especially for Kenyan goods.

To improve business to business connectivity, the cabinet secretary revealed that more direct flights from Kenya to different parts of China are being considered. He says a lot is being sought especially direct Kenya Airways flights to the capital, Beijing but admits a lot needs to be done.

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“Over time, we need to improve our competitiveness to be able to access markets like China. But the first step is to have a form of free trade arrangement with China which has been elusive for a long time.” He said.

According to Mohamed, Kenya at the moment is looking to China as “one that we now need to really be in a position to actually export more things to.”

For some time now, there has been concern locally over perceived dangers of opening up Kenya’s market to China without payment of any duty. In the opinion of the minister, the fears emanate from the notion that China, owing to its scale and because of its unit cost, which is much lower than in any part of the world, could easily be a market that will just supply goods into East Africa.

The caution notwithstanding, the Industrialization CS says China can longer be ignored in any issue touching on trade.

“We have to make sure that we become competitive ourselves as a way of making it easy for us to access this important market.” He said.

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Mohamed disclosed that Kenya now has a program of improving its exports into China just like it has been doing in other parts of the world. In his opinion, Kenya intends to utilize the OBOR initiative to the maximum for Kenya’s own success.

Among other things, the belt and road framework seeks to build an open economy, ensure free and inclusive trade as well as opposing all forms of protectionism.

As part of the cooperation strategy, the 30 heads of states and governments and several leaders of major world institutions who met during the BRF Summit in Beijing affirmed the need to prioritize policy consultation, trade promotion, infrastructural connectivity, financial cooperation and people-to-people exchanges.

In their joint communique after the meeting, the leaders resolved to deepen economic and trade cooperation by upholding the authority and effectiveness of the multilateral trading system as well as promoting trade and investment liberalization and facilitation.

 

Twitter @EricBiegon    

Email: biegoneric@yahoo.com

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