President Uhuru pledges support for private sector

President Uhuru Kenyatta has said his government will continue to support growth of the private sector in Kenya.

He emphasised the need to create and sustain conditions that are conducive to development of the private sector.

“Our manifesto and Kenya’s Vision 2030 identifies a number of elaborate policy interventions aimed at enabling, guaranteeing and funding the economy,” President Uhuru said.

The President was speaking on Wednesday during the African Trade Insurance (ATI) 13th Annual General Meeting at a Nairobi hotel.

He acknowledged ATI’s support during Kenya’s election, saying the agency provided financial security to key sectors of the economy and ensured that several businesses continued to operate.

The President also noted that Kenya is a major beneficiary of ATI’s activities with cumulative investments of more than USD2 billion in diverse sectors including road, port infrastructure, agribusiness, power sector and the banking sector.

“ATI has thus made significant contribution to Kenya’s economy and I believe this is true of all ATI’s member countries,” he said.

Apart from increased trade and investment activities in African economies, President Uhuru said ATI has also helped to increase capacity and innovation in the insurance and financial sectors, and contributed to the growth and competitiveness of the continent’s exports.

The President added that there was still need to work towards reducing the continent’s vulnerability to external shocks, especially volatility in the Euro zone - a region which provides a large market for many African exports including Kenya.

He said: “The European Union for instance accounts for 26 per cent of Kenya’s total exports” and urged urged African countries to remove structural impediments that stand in the way of businesses and lower administrative barriers that impede trade and investments.

Despite the difficult global conditions, the President noted, Africa has maintained its economic resilience and its output is now growing at a faster pace than any other region in the world today.

He noted that regional output is set to rise in 2013 with overall economic growth projected to increase at an average of 5.6 per cent.

“Factors that influence this growth include high public investment spending, strong commodity export prices, new resource exploitation, and increasingly diversified trade with growing emerging economies such as China, Brazil and India,” the President said.

Noting that Kenyans have just come out of a complex election process in which they managed to navigate their way without major disruptions to the economy, the President said that is solid evidence that the continent is coming of age and the democratic culture is taking root.

In addition to the efforts made by individual governments to remove institutional bottlenecks to business and the democratic change sweeping across the continent, he called for common regional approaches in increasing Africa’s contribution to the global economy.

Given the small sizes of many of Africa’s economies, he said regional co-operation will help the continent to exploit the synergies that exist and speed up integration so that African countries can be key players in the globalised economy.

In this regard, the President noted that the creation of ATI by African governments is part of the regional approach to development.

He added that the establishment of ATI came out of a need to address the negative perception of Africa.

“For too long our continent had been perceived as a region where unstable political leadership and governance problems were posing unacceptable risks to foreign businesses,” the President said.

The President said by creating a credible mechanism in which governments were agreeing to take responsibility for losses caused by political risks, member countries were committing themselves to being the ultimate risk takers.

Notwithstanding the gains in democratic governance in Africa, President Kenyatta said African countries have a responsibility to enhance business confidence for both domestic and foreign investments.

He noted that the ultimate objective of ATI is to facilitate Africa’s economic development through the provision of investment and trade credit insurance.

The President added that ATI’s goal is also to facilitate bank lending for trade and investments, assisting exporters to reduce the cost of trade finance and improving terms under which financing is made available by banks, and the diversification of the exports of member countries.

In this regard, President Kenyatta expressed satisfaction that ATI has continued to achieve major milestones towards the fulfilment of its objectives.

“The agency has facilitated the flow of investments and financing to support productive activities for contracts in excess of US$ 7 billion. These are investments and trade flows which would not have taken place without ATI’s support,” he said.

He urged African countries that have expressed interest in joining the Agency to hasten their internal processes so as to enable ATI extend its services to businesses in those countries.

The President noted that the expanded membership has the added advantage of speeding up the economic integration of Africa and enhancing the region’s ability to compete effectively in the global marketplace.

“I wish to congratulate the new countries which have joined the Agency and those which are in the process of joining. These include Benin, Ethiopia, Sierra Leone and Ghana,” the President said.

Speaking during the occasion, ATI Chief Executive George Otieno said his agency is diversifying its investment portfolio in order to ensure that its services remain competitive not only among the member states but the continent.

Mr Otieno pointed out that ATI is further seeking innovative ways of collaborating with other key players in the member states and globally to deliver on its mandate.

Tanzania’s Finance Deputy Minister Janeth Mbene who is the acting Chairperson of the AGM, rooted for more African countries to join ATI in order to enhance its capital investment base.

Mrs Mbene noted that ATI, the African premier insurer’s rating should be based on the number of ordinary Africans benefitting rather than the number of transactions.

Other speakers included the Sierra Leone Consul-General Mr. Abdul Ko Kargbo who read a goodwill message from his country’s President Ernest Bai Koroma, ATI Chairman Israel Kamuzora and African Development Bank, Regional Director Gabriel Negatu.