BIKO: What does Sh425bn China loan mean to us?

In investments, knowledge and information can be as critical to success as capital and strategy.

Know your business. Know your competition. Know your market. Most importantly—know your risks and this is what I have been asking myself since President Kenyatta signed the Sh425 billion deal with the Chinese.

I must say that the Sh425bn is a serious injection into our economy especially if it’s going into agriculture and wildlife, the two areas that earn Kenya a lot of foreign currency and create direct jobs than any other sector.

However, my joy and excitement on the signing and the upgrading of the partnership between Kenya and China to a special one has been that of a reluctant analyst. My reluctance is informed with numbers and statistics which do not lie.

Bilateral trade amounted to US$186.37 million in 2002; China exported US$180.576 million to Kenya, while only importing US$5.798 million of Kenyan goods, mainly black tea, coffee, and leather. Fast forward to 2013 and the numbers are grim.

The trade imbalance is greater than before as we import more, give key and crucial communications deals to the Chinese, not to mention their perverse attitude to press freedom. But this is not my concern as I believe the legal framework is at work and if any issue arises, then it will be dealt with accordingly.

My concerns about the Sh425bn have more to do with two issues; its effect into our economy if well utilised and what are we paying for. We know the price but do we understand its value to us? to the Chinese? Do we have the relevant fiscal frameworks to ensure that the money is well invested and all loopholes, corruption and embezzlement are sealed?

ALIEN CONCEPT

In developed countries, every partnership that involves two countries will be analysed in the perspective of the individual citizen of the individual countries in terms of job creation, wealth creation, GDP aspect and the tax realm. Unfortunately, this is an alien concept in Africa and more so, in Kenya.

Kenyans would like to know just how specifically the amount will be spent. How many jobs will be created overall and specifically be sector, say how many in agriculture and how many in wildlife. We would like to know just what will be the percentage effect into our GDP of this amount, and specifically into the various sectors of the economy that the money will be pumped into.

Another aspect that analysts need to be asking and not just showing illogical reasoning of excitement because of the money is how this amount will affect our external debt, which has been spiralling out of control, how are we going to pay for it, what is the duration the amount will be fully available to Kenya, how long shall we take to pay for it and most importantly, what as a country have we given up for such a deal?

Have we handed the dragon the key to our oil? Our minerals? Our land? Access to our retail industry for their unskilled labour?

Answers to these questions from the office of the President will help define just how we need to react but you can be assured, none will be forth coming, thanks to the fact that the governments information act has not been signed into law.

The other worrying factor is, in one single deal, we have moved East in terms of our foreign policy as a government. I am wondering, how is the private sector reacting to this? How are our Western partners thinking about this? Will this affect our security partnerships with the US and Britain?

Traditionally, Kenyans love the West. Look at the numbers of Kenyan students going to the US alone. Can you compare that to the East?

MODERN COLONIAL MASTER

They say those who ignore history are bound to repeat it and it seems as a country we are heading there if we do not reflect on our history, especially the scramble for Africa. China is a modern colonial master. The dragon is covered in Yuan that makes it so attractive, given our financial crunch we going through as a country, but at what price?

China takes from us primary goods and sells us manufactured ones. This was also the essence of colonialism.  ‘Africa must shake off its romantic view of China and accept Beijing is a competitor as much as a partner and capable of the same exploitative practices as the old colonial powers, Nigeria's Central Bank Governor warned in an interview with CNN a few months ago.

Is his advice valid? Should African leaders hearken to this? Do we really understand China’s intentions? What is their record in defending human rights? What is their record in honouring business patents and copy right issues?

For Kenya to realise its economic potential, we need to build first-class infrastructure. This should serve a Kenya-centric vision of economic policies, given that we have only raw materials to offer to the Chinese.

Kenya will not develop by selling commodities to Europe, America, India and China. We may not be able to compete immediately in selling manufactured goods to any foreign nation but in the short term, with the right infrastructure, we have a huge domestic market within the region and the African continent. Here, we must see China for what it is: a competitor and I hope the President is reading this.

We cannot blame the Chinese, or any other foreign power, for our country’s problems. We must blame ourselves for our investment scams, for embezzlement of our funds, for our neglect of agriculture and education, and for our limitless tolerance of incompetence.

The drink in the chalice that China has given us has a price of Sh425bn, but as a country, as a people, do we understand its value? Its impact to this and the future generation?

As a country we must start to debate these matters as they not only affect us but affect our children’s future and not focus on Big Brother and the sexual activities of the person you detest.