Nairobi — The Government has defended the entry of Chinese private investors into key sectors such as infrastructure and hospitality amid growing public concern over foreign dominance and the absence of strong local partnerships.
Responding to criticism over Anhui Jiubao Electronic Technology's recent move to invest in Kenya's transportation infrastructure, Government Spokesperson Isaac Mwaura clarified that the Chinese company is a private investor focused on manufacturing traffic control equipment such as traffic lights which are currently imported.
"This investment will lead to import substitution and job creation," Mwaura said.
"Kenya allows 100% foreign company ownership, and this is the global norm. We are open for business, and the government has a program of liberalizing foreign ownership."
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He added that localization can still be achieved through employment of Kenyans, sourcing of local raw materials, and subcontracting to local suppliers even when foreign companies hold full ownership.
Last year, President William Ruto lifted local ownership restrictions in the ICT sector, and the government is currently reviewing similar changes for other industries.
Concerns have also been raised over the feasibility of a Sh29.7 billion hotel project by China's Hunan Conference Exhibition Group, especially in a market already grappling with an oversupply of hotels.
Mwaura, however, said the investment is driven by projected growth in tourism, particularly in the Meetings, Incentives, Conferences and Exhibitions (MICE) sector.
"Kenya aims to attract over five million tourists from around the world. Chinese tourists are a key target. With a population of 1.4 billion, if we can attract just 1% of Chinese tourists, that's 14 million visitors. We need more facilities to accommodate them."
He further emphasized that the hotel investment is market-based, with Chinese investors aiming to position themselves to serve the increasing number of Chinese visitors to Kenya.
Addressing fears of potential "debt-trap diplomacy" often associated with Chinese investments globally, Mwaura stressed that the projects in question are entirely private sector-driven.
Last month, during President William Ruto's state visit to China, Kenya and China signed over 20 agreements on an array of sectors, aimed at enhancing cooperation in infrastructure, manufacturing, agriculture, technology, and education.
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