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Kenya, UK elevate relationship to ‘strategic partnership’

Sunday January 26 2020

Boris Johnson and Uhuru Kenyatta

UK Prime Minister Boris Johnson (left) greets President Uhuru Kenyatta outside 10 Downing Street on January 21, 2020. Kenya may have signed trade deals worth Sh227 billion at the recent UK-Africa Investment Summit but officials say the ultimate goal was to cement guarantees that could provide Kenyan businesses at least a five-year assured market. PHOTO | TOLGA AKMEN | AFP 

AGGREY MUTAMBO
By AGGREY MUTAMBO
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Kenya may have signed trade deals worth Sh227 billion at the recent UK-Africa Investment Summit but officials say the ultimate goal was to cement guarantees that could provide Kenyan businesses at least a five-year assured market.

After a meeting between British Prime Minister Boris Johnson and President Uhuru Kenyatta, the statement indicated Kenya and the UK were elevating their relationship to ‘strategic partnership.’

In international relations, countries routinely enhance the status of their cooperation depending on need, and labelling theirs ‘strategic’ implies deeper long-term goal for business, political or cultural ties.

Kenya has a similar status with the US and China, while it has run a ‘special status agreement’ with Ethiopia since 2012.

LONG OVERDUE

For the UK though, officials admit it may have been long overdue, given UK’s more than 200 firms operate in Kenya, with an annual foreign direct investment of about Sh80 billion by 2017.

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The British High Commission in Nairobi says 80 per cent of all workers employed in private corporate bodies in Kenya earn from a British-related firm. It adds that the British also pump in Sh7.4 billion annually in security cooperation.

UK will also be sending some Sh527 billion in aid.

So what will it mean for Kenya?

At the summit, there were about 50 Kenyan corporate chiefs.

EXPERTS AND RESOURCES

The dispatch said this elevation, targeting the first half a decade, will create a pool of experts and resources to focus on business, security, conservation, people relations and sustainable development known as the ‘five pillars.’

“From 2020-2025, we will work together across five pillars…reflecting the key challenges and opportunities of our time,” a joint dispatch from the meeting between PM Johnson and President Kenyatta said.

“Our countries will develop new investment and trade opportunities that will support business, including those of the Blue economy, and create jobs.”

The UK wants to start a formal exit from the European Union (EU) starting next week on January 31 and the worry among Kenyans was that there is no trade agreement to replace the one signed during the EU days.

NO DUTY

The leaders agreed that Kenya enjoys the old order of no duty imposed on Kenyan fresh produce during the 18-month transition, but technocrats will have to thrash out a deal within the next one year.

Initially, the EU insisted on negotiating with the East African Community as a whole and it often led to some members moving slowly, inconveniencing the stronger economy in Kenya.

In London, Kenyan officials argued that the collective approach was burdensome on the country and called for what is known as a geometric asymmetry where those willing to sign go ahead.

Ahead of the summit where 21 other leaders were invited, Kenya had said it will use the event to pitch for investment in affordable housing and healthcare.

GREEN BOND

It saw the launch of the first green bond worth Sh4 billion by UK property developer Acorn Holdings.

If it raises this money, the developer intends to use the funds to build eco-friendly hostels for 50,000 university students in Nairobi.

The UK has also offered to buy in what Kenya is marketing as Nairobi Urban Renewal Programme, which involves giving land to investors to put up affordable houses.

A railway city in Nairobi, estimated to cost Sh395 billion, was announced two years ago. But lack of money has stalled it to date.

The President said he was looking for people to invest in it, as private dealers, probably dodging the perennial criticism of taking loans.

“There was a great focus on private sector investment to grow jobs,” Kenya’s High Commissioner to the UK Manoah Esipisu told the Nation on Saturday.

ISSUES OF THE DAY

“There was also a great focus on partnership in tackling issues of the day such as immigration, security and climate change.”

The University of Manchester Hospital and the Christie National Hospital Service inked MoUs for cancer research collaboration with Kenya.

But one of the criticism about UK-Africa relations is the tough visa rules, often taking weeks to mature and sometimes applicants being rejected.

For example, it is often easier to get a visa into China than to the UK.

There was no formal announcement on specifics, but there was a promise to ‘look into’ how Kenyan students in the UK could be granted a two-year stay after graduation to gain work experience.

DEALS

The following are some of the deals:

  • Solar power producer Globeleq said it will put some Sh6.6 billion in establishing a solar farm in Malindi.
  • Tullow listed as pledging to continue investing £1,200m in continued oil production in Kenya.
  • British beer maker Diageo, which owns a big chunk of East African Breweries, investing Sh22 billion in projects meant to improve the environment.
  • British firm Acorn Holdings fetching Sh4 billion million via green bond on the London stock exchange, to build student hostels in Kenya.