May 25th 2013, GLANCE FACTS
Despite the hullabaloo about China and its growing influence in Africa, India is the largest exporter to Kenya.
While Chinese activities are more pronounced in Kenya and
Africa in general, the two Asian economic giants have been battling to
be the next major influence in Africa, especially given the difficult
phase the European economy is going through.
This has partly been
with varying degrees of success, with the two countries alone accounting
for close to 30 per cent of total imports to Kenya in 2012, according
to the just released Economic Survey 2013.The flipside is, however, disturbing, with exports to India declining, while exports to China grew on the back of increased sale of scrap metal to Chinese businesses.
This is despite the fact that Kenya is not a metal producer and scrap metal dealers have in the past been accused of vandalism to satisfy this lucrative export market.
According to the Survey, Kenyans bought goods worth Sh195 billion in 2012 from India, a substantial growth compared to Sh148.5 billion that Kenya imported from the country in 2011.
Imports from India are in comparison to Sh167 billion imported by Kenya from China, which was also a substantial increase when compared to Sh143.8 billion worth of imports in 2011.
Combined, imports from the two Far East countries stands at Sh362 billion to accounted for about 30 per cent of the Sh1.37 trillion that was the value of total imports to Kenya in 2012.
While it’s a known fact that Kenya’s trade with the two countries is heavily skewed to the Asian giants favour, actual figures of exports to the two countries tell a different but a sad story.
Low exports
According to the Survey, compared to the hundreds of billions in imports from China and India, Kenya exported goods worth a measly Sh5.4 billion to china, a growth from Sh3.8 exported in 2011.
Exports to India fell to Sh7.5 billion in 2012 from Sh9.4 billion in 2011.
“The growth of total exports to China is partly explained by growth of in scrap metal exports during the review period. Exports to Indonesia declined by 27.5 per cent and 19.9 per cent respectively,” said the Economic Survey.
The two countries have been positioning for what seemed to be
another phase of scramble for Africa, counting on the misfortune of
Europe in the face of the Euro zone crisis and the warmed up attitude
among African leaders to emerge as the key trade partners, source of
credit and even socio-cultural points of reference for Africa.
China’s intervention in Africa has been led by the state, while India’s intervention is led by the private sector.
While the two may not exactly replace Europe’s place in Africa, they have made significant inroads in Africa by way of financing mega infrastructure projects. Private sector firms from the two countries have also made huge investments in the country.
China has to a certain extent been able to dispel the notion of inferior products by its manufacturers.
There are numerous Indian multinationals looking at entrenching themselves into Kenya and the larger African market. Bharti Airtel recently acquired Zain, giving it a footprint in over 15 countries across Africa and making it one of the largest mobile operators in the world in terms of subscriber base.
Essar has a 50 per cent stake at the Kenya petroleum Refinery Ltd (KPRL) and also runs a mobile operator, yuMobile.
Other Indian majors in the country include Vehicle manufacturers Tata and Ashok Leyland, business process outsourcing company, Spanco, and cement producer Sanghi Group, whose subsidiary, Cemtech, has rights to mine limestone in Pokot.
Chinese multinationals operating in Kenya include ICT giants Huawei and ZtTE, a host of vehicle manufacturers like Foton that is putting up a Sh1.2 billion plant in the outskirts of Nairobi, electronic maker, Aucma, mobile handset maker, Tecno, and infrastructure firms like Shengli and China Wu Yi, all battling it out with major global brands and some have gotten major contracts in different sectors.
There are a host of other large and small Indian and Chinese firms that have thrown their hats into Kenya, and most expect to use their operations in Kenya as a springboard to the rest of Africa. Some of these are recent while others have operated in the country for some time now.
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