Kenya is arguably the biggest winner of the just concluded sixth Tokyo International Conference on African Development, which left Africa with a $30 billion (Sh3.042 trillion) investment pledge from Japan.
From minting more than Sh12 billion in the hospitality and tourism industry which saw city hotels record 100 per cent occupancy, as the host country, Kenya also sealed major deals with Japan from the summit which focuses on Japan-Africa development.
TICAD first held in Tokyo on October, 5 and 6, 1993 with the intention to bring global attention back to Africa. In the early 1990s, global interest in Africa relatively faded after the collapse of the Berlin Wall in 1989 and the end of the Cold War. Capitalist and communist countries had raced to support African countries in order to expand their own blocs and spheres of influence.
The Government of Japan established TICAD to promote Africa’s development, peace and security, through the strengthening of relations in multilateral cooperation and partnership, particularly with the country.
In the course of the past 20 years, TICAD which is organised by Japan, the United Nations, the World Bank, the UN Development Program and the African Union, has evolved into a major global and open multilateral forum.
For the first time in history, the forum was held outside Japan and Kenya boasts of becoming the first foreign country not only in Africa, but globally, to play host to the forum.
A harvest of MOU’s
On August 26, Kenya entered two key agreements with Japan, setting pace for the conference which culminated with 73 MoUs between Japan and Africa countries, with Kenya securing 22 MoUs.
The two were a ‘High Quality Infrastructure’ agreement which seeks to promote development of superior quality projects in the country.
Mining CS Dan Kazungu also penned an MOU with Japan’s Oil, Gas and Metals National Corporation, on remote sensing technology in field mineral resources.
On August 28, Kenya and Japan entered an agreement on the ‘Promotion and Protection of Investment’ signed by Japan Foreign Affairs Minister Fumio Kishida and National Treasury CS Henry Rotich.
The agreement aims at further protection and promotion of investment between the contracting parties. It entails fair and equitable treatment of investments, free transfers requirements, conditions for expropriation and compensation and procedures for dispute settlements.
President Uhuru Kenyatta who hosted more than 30 Africa heads of state and top government officials called on Africa to “stand as one in pursuit of equitable growth”.
“It is only by coming together, to embrace partnership, mutual respect and long-term thinking that we can make the world more secure for the dreams of our people,” said Uhuru at the conference, attended by over 10,000 delegates including twenty - three Presidents, nine Prime Ministers and more than five Vice Presidents.
It was
the biggest gathering of leaders in Kenya in more than 30 years, signaling President Uhuru’s aggressive foreign policy, including visits abroad to trumpet Kenya as the investment destination of choice on the continent, were bearing fruit. All African countries except Libya and Morocco attended the meeting where 33 countries were represented.
The forum also attended by more than 100 chief executive officers from top Japanese corporations, saw Kenya rekindle its long term relationship with Japan, which pledged Sh10 billion for economic and social development in the country. President Uhuru said the grant will go towards building food security and sustainable agriculture as well as strengthening the health sector.
The two countries agreed on priority areas of corporation which include health, energy, infrastructure development, education, trade and security.
During the forum, the Kenya Investment Authority signed three MoUs, a move that will see increased investment flow from Japan, managing director Moses Ikiara said.
These include a partnership with the Japan External Trade Organisation to offer Kenyan investments in Japan.
Keninvest also signed MoUs with Japan’s Mizuho bank and the Bank of Tokyo-Mitsubishi.
“The two cover all big corporates in Japan. They will directly offer investment opportunities in Kenya to their clients in Japan,” Ikiara said.He said Kenya is eying investments in agro-processing, energy, telecommunication, tourism among others.
Kenya also took the opportunity to push for more market access of local products in Japan.
“What we have asked Abe is for easy and more market access for agricultural products which include tea and horticultural produces,” Kenya National Chamber of Commerce and Industry chairman Kirpono Kittony said.
He said Kenya firms have also initiated talks to have equity in Japan-Kenya based companies.
“We expect a lot of benefits to come from TICAD for our local industries,” Kittony said.
Kenya’s health sector was also a big beneficiary of the forum.
First Lady Margaret Kenyatta’s Beyond Zero initiative received a Sh8 million mobile laboratory from four international companies. The fully fledged lab that has a higher disease diagnostic capacity than a normal basic lab was donated through a joint partnership between Japanese entities Toyota Tsusho, Sysmex and
Terumo
Corporations alongside Eiken Chemical. The facility will largely concentrate on diagnosing blood-related diseases and CD4 counts in informal settlements and other areas where HIV/Aids is prevalent.
Prime Minister Shinzo Abe said Japan will use Kenya as a model country in Africa, in its move to foster universal healthcare.
Kenya and Japan also signed an MoU to jointly develop the Mombasa-Dongo Kundu Special Economic Zone, with Kenya securing Sh27 billion from the Japanese government in form of both loan and grant for the project. In February, Cabinet approved the development of the 1,326 hectares SEZ facility, which could create up to 27,000 jobs. It will host wholesale and retail trading entities, breaking bulk, re-packaging logistics, warehousing, cargo handling and storage among others.
“We will re-enforce our corporation for ports and harbor development as well as geothermal in regards to quality infrastructure promotion.” Abe said.
Other achievements during TICAD VI include Kenya-Japan corporation in maritime security and the fight against terrorism.
President Uhuru Kenyatta also called on Japan to take advantage of Kenya’s position as the regional hub and gateway to East and Central Africa, to set up firms in Kenya and penetrate the regional market.
Kenya will be seeking to leverage on its long term relationship with Japan to reap maximum benefit from the $30 billion (Sh3.042 trillion) investment pledge to Africa. Part of the pledge is a $10 billion (Sh1.014 trillion) kitty for infrastructure development starting this year, which Kenya will be seeking to gain from.
Prime Minister Shinzo Abe said the funds will be channeled through the African Development Bank, focusing on electrical power, urban transport systems, roads and ports. Uhuru affirmed his government’s commitment to create an enabling environment for the operation of private businesses.
Japan’s Nairobi pledge comes in addition to a 2013 - five year investment promise of $30 billion (Sh3.042 trillion). Japan has already implemented 67 per cent of the aid money, Abe said.
TICAD VI also saw the adoption of the “Nairobi Declaration” which will guide the development agenda between Japan and Africa for the next three years. Japan took advantage of the forum to market among others, its infrastructure development programme and industrial sector to the Kenyan government and private sector.
Its aggressive move to bring TICAD to Africa’s door step signals a battle for the share of the continent’s development project, where countries like Kenya have increased engagement with the likes of China attributed to its “flexible debt terms and low-cost infrastructure technology”.
(+) Key Japanese projects
One of the key projects is the construction of the Sh30 billion Mombasa port second container terminal, which will be commissioned on Friday. Completed in March, the project by Toy Construction Company brought
an additional 550,000 twenty-foot-equivalent unit capacity at the port, raising the port’s total capacity to 1.65million TEUs.
Japan has provided loans and technical assistance to Kenya’s geothermal projects in the past, among them a $408 million (Sh41.4 billion) loan signed in March, to build a 140 MW geothermal plant expected to be operational within two years.
Historical projects by Japan include the Nyali Bridge in Mombasa which was completed in 1980.
Japan through its development agency - JICA is currently co-financing the design of the proposed Likoni Bridge, together with the Kenyan government.