27 August 2018

Kenya: U.S. Plays Catch Up With China As Americans Sign Multimillion Dollar Deals With Kenya

Photo: AllAfrica
U.S. Assistant Secretary of State Tibor Nagy

Two US companies will invest $238 million worth of projects in Kenya in deals made during President Uhuru Kenyatta's visit to the country.

On Monday, Kenyatta witnessed the signing of two agreements by the US Overseas Private Investment Corporation (OPIC) and Kipeto Wind Energy Company in Washington DC.

The deal signed for Kipeto Energy by Grant Brooke will see the availing of financing for the construction and operation of a 100-megawatt grid-connected wind power plant south of Nairobi to provide a more reliable source of energy to the national grid.

This plant also supports the US Power Africa Initiative to double the number of people in Sub-Saharan Africa with access to electric power.

Another deal signed when Kenyatta met business executives of leading US companies under the umbrella of the Business Council for International Understanding (BCIU), was a $ 5 million letter of commitment in financing to expand the distribution network of Twiga Foods.

The deal signed by Twiga Foods' Dr Kenneth Namunje and OPIC President and Chief Executive Ray Washburne will also improve food security and agricultural wages in Kenya.

Addressing the US business executives, Kenyatta assured them of his administration's commitment to remove any hurdle that could impede their operations in Kenya.

"Kenya is open for business and all we want to do is package our partnership in a way that it is mutually beneficial to you as a private sector and the people of Kenya," President Kenyatta said.

President Kenyatta invited more US investors to set shop in Kenya to benefit from the opportunities created by the Big Four development blueprint projects.

He said the Big Four agenda projects - pegged on boosting manufacturing to create jobs, food security, provision of affordable housing and universal healthcare coverage - present major opportunities for local and foreign investors.

The BCIU is a US-based organization comprising of 200 member companies.

It helps its members to engage internationally by facilitating mutually beneficial relationships between business and government leaders worldwide.

In manufacturing, President Kenyatta said Kenya looks to increase the sector's contribution from 8.4 to 15 per cent by 2022.

"This presents major opportunities for local and foreign investors in areas such as agro-processing, textiles and leather, the maritime sector, construction, iron and steel, and oil and gas," the president said.

In the meeting that was attended by US Commerce Secretary Wilbur Ross and over 20 top executives of leading American companies, Kenyatta said the proposed investment of $5 million by Twiga foods in the agricultural sector was a boost for food security.

President Kenyatta meets British PM Theresa May during his visit to England early this year. May is expected in Kenya after Uhuru gets back from the US.

On provision of Universal Healthcare Coverage (UHC), Kenyatta said his government looks to roll out innovative health insurance options, set up local pharmaceutical companies, upgrade and manage healthcare facilities and set up specialized treatment centres.

"Given our long and well-established relationship, we can do more together and I invite the US companies to walk with us on the 'Big Four' journey," he said.

He added: "With so many opportunities open to us and given our long and well-established relationship, the time is ripe to make a change in our business engagement."

The Monday meeting was the third the President was having with members of the BCIU, the last one having been held in 2015.

He said his administration has continued to improve the business environment with a view of providing a facilitative environment for private sector growth.

"Between 2014 and 2018, Kenya improved its ranking on World Bank Ease of Doing Business Index (DBI) by 56 positions from 136 to 80 and remains on target to get to the top 50 by 2020," Kenyatta said.

Kenyatta pointed out that the economy remained buoyant and resilient, registering a 5.5 per cent average growth rate over the last 5 years in spite of a historic presidential election and weathering a major drought in 2017.

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