How Pakistan fits in with Kenya’s diplomacy plan

President Uhuru Kenyatta with Abdul Razak Dawood, the Advisor to Pakistani Prime Minister on Commerce, Industries and Investment, at the Kenyatta International Convention Centre (KICC), Nairobi on January 30. PHOTO | LUCY WANJIRU 

By BRIAN NGUGI
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Summary

• Pakistan is seeking to double its trade with African countries in the next five years by increasing the bilateral trade and economic cooperation under its “Look Africa Policy Initiative”.
• Kenya and Pakistan have traditionally maintained strong bilateral relations that go back to the 1960s when the Asian nation campaigned for the country's independence from British colonial rule.
• The country is the leading destination for Kenyan goods in Asia especially tea and coffee.

Last week, Nairobi hosted the inaugural Pakistan-Africa Trade and Development Conference, providing yet another platform for Kenya to explore more opportunities for trade and investment as it gears to achieve its various development goals under the Big Four Agenda and Vision 2030.

The conference dubbed "Engage Africa", organised by Pakistan's ministry of Commerce, was attended by over 100 leading Pakistani companies in sectors such as textile and apparel, pharmaceuticals, agriculture, banking, transportation, surgical instruments, leather and sports goods, light engineering and electronics, IT and software and cement and construction services.

Pakistan is seeking to double its trade with African countries in the next five years by increasing the bilateral trade and economic cooperation under its “Look Africa Policy Initiative”.

In what mirrors President Uhuru Kenyatta’s economic diplomacy, Pakistan has been searching for investment beyond its borders through economic diplomacy since its charismatic Prime Minister Imran Khan — a former cricket hero — took office in August 2018.

Facing an economic crisis due to depleting foreign reserves and a widening current account deficit, the Asian country has been seeking financial assistance and calling for investment from friendly countries, while also negotiating a bailout package from the International Monetary Fund (IMF).

Kenya and Pakistan have traditionally maintained strong bilateral relations that go back to the 1960s when the Asian nation campaigned for the country's independence from British colonial rule.

The country is the leading destination for Kenyan goods in Asia especially tea and coffee.

In 2018, Pakistan was the second biggest destination of Kenyan exports behind Uganda. Pakistan imported goods worth Sh59.4 billion from Kenya, mostly tea.

In the same year Kenya brought in goods worth Sh21.4 billion from the Asian country.

Last year, Pakistan also cemented its position as the largest buyer of Kenyan tea with stocks worth Sh35 billion in the 10 months to October 2019.

Latest data from the Tea Directorate indicates Karachi bought 14.8 million kilos of tea in the period, a marginal increase from 14.7 million kilos the previous year.

Pakistan has remained a major buyer of the Kenyan beverage, taking up close to 40 percent of total production.

Among other commodities from Kenya that have high potential in the Pakistani market are hides and skin, onions, carbonates, sacks and bags, cut flowers, dry nuts, mangoes, coconuts and powdered milk.

Pakistan’s major exports to Kenya include rice (80 percent), wheat, cotton fabrics (woven) and veterinary products.

Others are engineering goods, electrical appliances, pharmaceuticals, sports goods, surgical instruments, cutlery and furniture.

With Pakistan's renewed interest in Africa, Kenya stands to immensely gain by positioning itself not only as the ultimate trade and investment destination but also as the gateway to the rest of the region and continent, trade experts and diplomats from both countries agree.

Pakistan has already expressed interest in engaging in trade negotiations with regional blocs such as the East African Community (EAC), in addition to taking advantage of the African Continental Free Trade Area (AfCFTA).

Mr Kenyatta said during the opening of the conference that there are many untapped business opportunities in the country and Africa that can be exploited by Pakistan investors.

With a population of 1.2 billion, the AfCFTA presents a unique platform for investors to engage Africa as a bloc, thereby benefiting from economies of scale, noted the President. The same applies to the EAC, which boasts a population of over 100 million.

“This conference goes a long way in reaffirming the reality, that stronger bonds will be built between brothers and sisters across the African continent, under a single trading platform of the African Continental Free Trade Area framework, on which all third parties shall engage Africa on matters trade and investment,” said Mr Kenyatta told the conference attended by Pakistan's Foreign Minister Shah Mahmood Quresh.

The President indicated he would visit Pakistan soon.

To accrue maximum benefits, experts say Kenya should seek to negotiate strategic deals that would encourage more Pakistan investors to venture into the country.

It should also put in place favourable terms for Pakistani exporters dealing in goods such as pharmaceuticals, surgical equipment and farm machinery, which will help boost the Big Four Agenda.

Kenya, as East Africa's financial and technology hub, also stands to gain from the "Look Africa Policy Initiative" as Pakistan looks for more opportunities.

Pakistan has long maintained strong ties with Africa, extending support to peace and security efforts through its participation in multiple peacekeeping operations under the auspices of the UN.

Experts says Kenya and Pakistan can also focus on sister-ports city agreement, air connectivity (direct flights), and visa liberalisation to strengthen bilateral relations.

The two countries are also in talks on a proposed linkage between the Port of Mombasa and Karachi that will see cargo ships take less than 14 days from the current nearly 20 days with a view to helping businesses cut on time wastage and reduce export and import costs.

“I have a strong belief that trade and connectivity are two sides of the same coin and it is not possible to have one without the other," said the Advisor to Pakistani Prime Minister on Commerce, Industries and Investment, Abdul Razak Dawood.