Experts say Kenya to reap big rewards from initiative

Experts believe Kenya will be one of the African states to reap huge benefits from China's ambitious Belt and Road Initiative, through the opening up of new global markets and local industries.

Performers take photos at the railway station in Nairobi. Kenya's first standard gauge railway from Mombasa to the country's capital, Nairobi, began operation on May 31, The railway was built by China Road and Bridge Corp. [Photo/Xinhua]

The landmark Chinese initiative seeks to expand the ancient land routes that connect China to the Mediterranean, and corresponding ocean routes, including to Africa.

Modern political and economic relations between China and Africa began in the era of Chairman Mao Zedong.

But archaeological excavations within East Africa have uncovered ancient Chinese coins and porcelain, confirming that Africa and China have been trading with each other since as far back as the 14th century.

Now experts expect a consolidation of trade and economic relations with China's mission to build a massive network of land and sea links connecting Asia, Europe, the Middle East and Africa.

In total, China will spend as much as US$3 trillion (2.7 trillion euros; ￡2.3 trillion) on roads, ports and other updates to infrastructure in more than 60 countries participating in the Belt and Road Initiative.

In Kenya, a new railway connecting Nairobi to the country's port city of Mombasa, funded and built by China, was recently commissioned and will eventually reach neighboring East African states including Uganda, Rwanda and the Democratic Republic of Congo.

Nairobi-based investment analyst Aly Khan Satchu says the Belt and Road Initiative is expected to benefit countries along the route, especially Kenya, by boosting trade levels.

"It is particularly satisfying that a China-financed and built standard gauge railway places Kenya admittedly at the periphery but properly connected to the Belt and Road project and the vision of President Xi Jinping," Satchu said in an interview with China Daily.

"The reason that it is satisfying is that 600 years ago, the Muslim eunuch Chinese Admiral Zheng He actually made it to the Swahili coast and that was, in fact, Africa's first engagement with China. So it is fitting."

The Kenyan coast was the African landing site of the ancient Chinese "maritime" Silk Road.

According to Satchu, the infrastructure projects lined up for the initiative will open up Kenya to the world and allow it to benefit from Chinese industries.

"It has been widely predicted that aproximately 100 million low-cost manufacturing jobs have to depart China, and Kenya needs to win some of that transfer," he says.

Satchu says while Kenya has, or is in the process of solidifying, all the main ingredients for creating a manufacturing sector, including access to good human capital and cheap and uninterrupted power, it needs infrastructure that takes its goods at low cost to global markets.

"Think of the wider Indian Ocean. That is a market of 3 billion people right at our doorstep. That's the opportunity," says Satchu.

According to Edward George, UK-based head of group research at Pan African lender Ecobank, Kenya will be the fulcrum of African engagement with the Belt and Road Initiative.

East Africa's largest economy has been courting China to support its own plans to construct a new transportation corridor covering rail, road and an oil pipeline from Lamu and connecting Kenya with Ethiopia and South Sudan.

The Lamu Port-South Sudan-Ethiopia-Transport (Lapsset) corridor seeks to strengthen Kenya's position as a gateway and transportation and logistics hub to the East African subregion and the Great Lakes region to facilitate trade, and to promote regional economic integration and inter-connectivity between African countries.

George says the Belt and Road Initiative fits perfectly with Kenya's own long-term aspirations for the Lapsset corridor.

"The Belt itself is the road and railway line which goes across Asia but the Road is a combination of sea routes. The only official stopping point in Africa is going to be Kenya. It will be Mombasa and Nairobi, and I am thinking about the Lappset project," says George.

He says that since Kenya is already a major entry point for trade, the Belt and Road Initiative will build on the country's strength as a major trade hub.

"It is very positive for Kenya in terms of the way the country could be the key point of integration for Africa with this initiative," says George.

According to Bob Wekesa, a postdoctoral fellow at the University of the Witwatersrand in South Africa, the Belt and Road Initiative offers Kenya a great opportunity to "skim off value" even as Kenya positions itself as the initiative's African champion.

"With some strategic thinking, the Belt and Road Initiative is a low-hanging fruit for the county governments of Mombasa, Kwale, Kilifi and Lamu," says Wekesa, writing in a Kenyan daily paper.

The trade volume between China and other Belt and Road countries from 2014 to 2016 exceeded US$3 trillion, and China's investment in these countries has surpassed US$50 billion.

Kenyan President Uhuru Kenyatta said on May 15 that the Belt and Road Initiative is the best model for Africa's desired progress.

Kenyatta told a round-table summit of global leaders in Beijing that the African continent is poised to regain some of the missed opportunities of globalization by playing an active role in the China-proposed initiative for an interconnected world.

Kenyatta, citing the construction of the standard gauge railway in Kenya, said that joining the Belt and Road Initiative will open up trade and investment opportunities while also reigniting Africa's plan for regional and continental integration. The rail line linking Mombasa port and Nairobi was launched just two weeks after President Kenyatta attended the Belt and Road Forum in Beijing.

"We will all win when the economic corridors we develop hasten industrialization and when they hasten the development of domestic private-sector capabilities," Kenyatta said.

"Being part of One Belt allows the continent to move to a new platform, through which global collaboration will allow for value addition, innovation and increased prosperity."

The Kenyan leader spoke in Beijing when he attended the Belt and Road Forum for International Cooperation on May 14 and 15.

Speaking at the forum, President Xi stressed the importance of promoting land, maritime, air and cyberspace connectivity, focusing on key passageways, cities and projects and connecting networks of highways, railways and seaports.