By MARVIN SISSEY
In Summary
- Our historical ties, geographical closeness and growing trade offer more potential than China.
On November 7 last year, the Business Daily ran a story that probably passed many readers unawares. The story’s title was India beats China in Kenya trade deals.
Citing the Kenya National Bureau of Statistics,
eight months into last year, Kenya’s imports from India were worth Sh144
billion compared to Sh114 billion imports from China.
In the comparative period the previous year, India
had Sh122 billion worth of exports to Kenya comparable to Sh113 billion
from China.
Around the same time, London-based Overseas
Development Institute (ODI) released a report that showed that in
Africa, Kenyan businesses received most funding from Indian banks in the
past five years.
The report by ODI on international private capital
flows showed Indian banks increased lending to Kenyan businesses
six-fold between 2005 and 2012, the corresponding period within which
the emerging Asian economic giant had become the leading source of
Kenyan imports.
In fact, when compared to other low income African
countries, the report showed that Kenya attracted the lion’s share of
cross-border bank lending.
None of the other 19 African low income countries then got more than $100 million (that Kenya got) in lending from Indian banks.
This increased import bill from China has obviously created a related increase in the balance of payments bill for our country.
Some of the materials we import from India include
petroleum oils, medicaments, flat-rolled products, iron or non-alloy
steel, electric power machinery, food-processing machines, textile yarn,
electrical machinery and apparatus, motor vehicles, equipment for
distributing electricity andgeneral purpose machinery.
Contrast this with what we export to India —
metallic salts and peroxysalts of inorganic acids, vegetables, roots,
tubers and other edible vegetable products, crude minerals, tea,
leather, wool and other animal hair, lead, non-ferrous base metal,
pearls, precious and semi-precious stones, textile and leather
machinery.
Our lack of manufacturing muscle has meant that
our export value largely pales in comparison with our import value
placing us at a serious trade disadvantage.
Nevertheless, it also means that even as we
consider building relationships with our trading partners, those who
consume most of our foreign exchange dollars need to be optimum on our
radar.
The government obviously seems to agree with this
hence the adoption of looking East as an economic strategy.
Unfortunately, politically at least, our eyes seem so transfixed on
China at the expense of other partners.
On the positive side, this has led to the
strengthening of Sino-Kenya ties, which may prove critical in
geo-political shape up. All this may be good on paper in the short run.
But it would be disastrous for Kenya to ignore
other trading partners who may prove to equally strategic. In
particular, it would be disastrous for Kenya to ignore India
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