American firms keen to invest in Kenya as ties with US improve

Last evening, American giant car manufacturer Ford Motor Company launched on the local market a Mustang, a sports car it says delivers with a pulse-raising torque and legendary roar.

Bechtel Corporation, another US engineering firm, is fighting for a tender to construct a multi-billion-dollar six-lane super-expressway from Mombasa to Nairobi, which would represent the biggest investment by an American firm in Kenya in more than two decades.

The two are part of about 50 American firms now investing billions of dollars in the Kenyan economy, as they fight off competition from Chinese, Japanese and South Korean firms that have been awarded some of the mega projects the Jubilee administration is undertaking.

There has been a total turnaround in the relations between Kenya and the US, which hit a rock-bottom low in early 2013, when Kenyans elected President Uhuru Kenyatta and his deputy, Mr William Ruto, who were facing charges of crimes against humanity in the International Criminal Court.

In February 2013, then United States Assistant Secretary of State for African Affairs Johnnie Carson, while commenting on the elections that were a month away, warned that Kenya could face consequences if they elected the two Jubilee leaders.

“We live in an interconnected world and people should be thoughtful about the impact that their choices have on their nation, on the region, on the economy, on the society and on the world in which they live. Choices have consequences,” he said.

Mr Kenyatta and Mr Ruto did not take kindly to the position of the US and decided to work more with the East, mainly China.

Chinese Prime Minister Li Keqiang visited Kenya in May 2014.

However, by mid-2014, the relations with America started warming, placing on the path of recovery ties established at the time of independence.

On Friday, US Ambassador Robert Godec said: “Johnnie Carson was misunderstood. He never intended the remark as a preference for any political party. It wasn’t intended to endorse one candidate over another.”

GROWING POPULARITY
Mr Godec said the Kenya-US ties were not dependent on the relations of those in power, but by the urge of the American people to work with Kenyans.

However, he admitted that President Barack Obama’s visit in July 2015 was a turning point, pushing the relations to its current level.

“The extent and level of our engagement is intense and President Obama’s visit played a part. We have had eight Cabinet- level visits, and Secretary of State (John Kerry) has visited twice, which has never been the case before,” he said.

Foreign Affairs Principal Secretary Monica Juma described the relations with the US as “very good” and have been given a fresh boost by the leadership of the two countries — President Obama and President Kenyatta.

“The state of our relations with the United States is very good. It has been rebooted and is growing both in scope and depth,” she said.

She said following President Obama’s visit, several deals were signed.

“The commitments were on security, anti-terrorism, governance, trade, direct flights, a new visa regime, health, infrastructure, climate change, wildlife and environment conservation, among other areas,” she said on phone.

Dr Juma said there “is a growing appetite” by US companies for investments in technology, infrastructure, innovation and the media”.

“The growing appetite by US companies mirrors what is happening across the world in relation to Kenya — both the West and East are very interested in doing business with us.”

Arising from the renewed relations, Bechtel Corporation has been bidding to build the super-expressway from Mombasa to Nairobi.

Another US firm, Overseas Private Investment Corp (OPIC), is setting up offices in Nairobi to provide insurance for American accompanies investing in Kenya.

At the same time, America’s Exim Bank is providing the required finances for the projects.

“We have just opened OPIC offices in Kenya. OPIC has a portfolio of $5 billion (Sh500 billion) in Africa and $750 million (Sh75.9 billion) — a big percentage — is in Kenya.

Under President Obama’s Power Africa programme, which is worth Sh3.3 trillion ($33 billion), Kenya has a share of Sh708 billion ($7 billion) to finance its green energy projects.

KENYANS' INTERESTS

Under the African Growth and Opportunity Act, Kenya is negotiating to increase its quota from Sh40.4 billion ($400 million) to its potential of Sh300 billion ($3 billion).

“We have opened an office on Waiyaki Way (Westlands, Nairobi). I have encouraged the government to help business people access the American market,” said Mr Godec.

He cited General Electric, Rigleys LLC, IBM and Ford as being among the firms that have invested in Kenya.

“We have a lot of projects going on in Kenya and it’s an intense engagement like never before. We certainly have an interest in the pipeline from Turkana to Mombasa, and Lapsset (Lamu Port-South Sudan-Ethiopia Transport ) projects, even though there are challenges,” said Mr Godec.

During the UN General Assembly, Mr Ruto said direct flights to the US were two meetings away, with America acknowledging that Kenya had taken commendable steps towards tightening security at the Jomo Kenyatta International Airport.

However, the US, while denying that it was not investing in Kenya heavily to fight out Chinese influence, reminded the government to ensure interests of its citizens are taken into consideration when entering into business deals with the East Asia economic giant.

“Our interest in Kenya is not spurred on by China. What drives our investment is the desire to work with Kenyans. We have a lot in common, dating back 50 years. You have even given us a President, whose father was Kenyan,” he said.

Away from commercial interests, Kenya and the US have been cooperating at security, education and technical levels, he said.

“We are soon going to deliver helicopters to the military to fight Al-Shabaab,” he added.