Obadha: We must make the most of the opportunity GES presents
The foreign entrepreneurs we see in Nairobi today and tomorrow are here for a mission, they think, or rather they are sure that we have something they can build on. A majority of them are Americans, and Kenya has caught their attention.
To be specific Kenya is in need of technical assistance, affordable funding, infrastructure expansion, and reliable energy sources. On the other hand, American firms are seeking new technologies, affordable skilled labor, and consistent markets for their products and services.
To achieve their goal American companies have come seeking to participate in the key government-led projects in the areas of technology, infrastructure, energy, and agribusiness. They are also very keen on Kenyan entrepreneurs who through innovation are trailblazing in technology and other sectors.
Kenya’s good pool of skilled and schooled workers
Kenya has a competitive talent pool, an invaluable human capital. Competent human capital is a fundamental element to American big businesses, which are good at identifying and recruiting employees with perceived good technical skills and bright futures.
The same way America has treated emerging innovative countries, India included, it should consider giving bright and needy youth from Kenya H-1B visas to plug in American firms need for cutting edge techies. The H-1B visa is a temporary, non-immigration visa for foreigners in specialized occupations.
Kenya’s competent human capital is still under-utilized by the economy. Instead of having this capital idling locally, it will help to have the youth engaged in energy and mind sapping productive activities to occupy their time gainfully. Eventually, even if seen by other observers as a brain drain, it will serve to create a viable source of foreign exchange back into the country as diaspora remittances as it gives meaning to many young lives.
Trade and Direct Investment
There is urgent need to realize close and balanced economic partnership between Kenya and America.
In simple terms, Kenya ranks no. 96 biggest trading partner to America (very insignificant) while America recently became Kenya’s third largest trading partner (quite significant).
The data indicates how heavily the little trading America does with Kenya is skewed in their favor, which however in terms of volume is still insignificant to their economic wellbeing. If this is the case, it follows that Kenya needs America!
To compound matters, Kenya’s current ranking on the World Bank Ease of Doing Business Index is number 136 out of 189 economies. It is obvious that Kenya has a lot to learn in this perspective and to take prudent and fast steps to address bureaucracy in the business sector.
The bright and promising side to this is that trade between Kenya and US is characterized by a lot of untapped potentials. The Kenyan delegation should look into unlocking this potential without undue exposure to their citizens.
The Kenya delegation should ensure they strike with America an investment treaty, parallel and concurrent to AGOA that creates bigger and more balanced bilateral trade and investment opportunities, improve investor confidence and spur growth in both countries.
Drive an Agenda for Authentic Kenyan exports
It is a widely known policy of the Jubilee Administration to promote and buy local products and services up to 40% of total public expenditure purchases before resorting to external sources.
But Kenya cannot export what it has not made! The low export regime brings into sharp focus the letdown that our export processing zones have become. It is well known that in Kenya’s export processing zones, it is foreign firms that register businesses to satisfy the AGOA quota for Kenya.
Most of these businesses employ a majority of unskilled and semi-skilled workers who work under deplorable conditions and earn miserable wages while the firms enjoy incentive tax breaks of up to 10 years. Revenue generated from their activities does not serve to better Kenyans lives. A good number of firms file for insolvency just before the tenth year, then move out to other lucrative markets around Africa to propagate the vicious circle.
Economists have pointed out over time that there is nothing like a vibrant manufacturing sector in trying to lift up a country’s economic growth projectile! American firms should be welcomed to manufacture locally but under terms that take care of Kenya’s interests.
Filling the gap for start-ups to grow to maturity
Big business is good, but it must be acknowledged that they all began small some day. Kenya should negotiate for American firms to adopt its start-ups specifically to ensure their conversion from fledgling small and medium enterprises to fully-fledged multinational firms. Mentoring of small business is invaluable, it the inoculation jab that sees through child businesses fight off maladies until development to maturity.
One very important way to assure business survival is to enable access to cheap finance and capital seen in the light of Kenya’s limited and very expensive capital sources such as commercial banks.
Kenya should expect American investors to raise the issue of official bureaucracy, a lax and tedious legal regime and corruption as risk factors for American firms seeking for business in Kenya.
Insecurity, human rights, and governance issues can only be discussed once Americans have assured investments and considerable interests in the country. It might seem cruel to say this, but the foremost factor in the investors’ heads is about gains and benefits with other important issues being the tail of the deal to be pursued by American authorities.
The time is now, and the opportunity is here; history will judge Kenya harshly if she allowed this rare meeting of ‘opportunity’ with ‘chance’ to go to waste because she was not prepared. The millions of dollars at stake will only go to those prepared and ready to move a notch higher in entrepreneurship!
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