Government roots for Kenyan bank in the US

Says it will increase capital availability, boost investments.

In Summary

•The government plans to open more consulates in the USA.

•The US is Kenya's leading source of diaspora remittances, accounting for about 60 per cent of monthly inflows into the country.

Foreign Affairs CS Alfred Mutua engages Kenyans in the US/TWITTER
Foreign Affairs CS Alfred Mutua engages Kenyans in the US/TWITTER

The Kenya Kwanza government is pushing for a banking and loan system for its citizens living abroad, with a strong focus on the US.

Through the foreign affairs ministry, the government is also working on strengthening Mpesa services, as it remains a key shareholder in Safaricom with a 35 per cent stake.

According to foreign affairs CS Alfred Mutua, strengthening financial services and products abroad will boost access to investment opportunities, and support the financing of projects back at home. 

" I have encouraged Kenyans to join together we open a Kenya bank in America, so that equity in the US can be used as collateral for financing projects back home in Kenya," Mutua said.

Mutua is in the US where he visited the  Kenyan Embassy in Washington and met citizens at different forums in the states.

The CS said reliable financial services will help the diaspora community launch projects and tap other benefits.

The government further plans to open more consulates in the US.

It is considering Chicago or Minneapolis for the midwest either, in the South either in Dallas or Atlanta, and one in the northwest in Seattle.

This is to improve government services to Kenyans in the country.

"Our missions will also offer trade and investment services for Kenyans and foreigners to invest in Kenya so that they can take advantage of the Public Private Partnership program, and low cost housing ventures and other projects," Mutua said.

He said the move will increase trade and investment opportunities, which will in turn help create jobs in the country and boost economic growth.

The US is Kenya's leading source of diaspora remittances, accounting for about 60 per cent of monthly inflows into the country.

Remittances continued to register robust growth, with inflows of Sh 413.3 billion in 2021, the Economic Survey 2022 indicates.

This was up from Sh330.8 billion in 2020 and Sh289.4 billion the previous year.

"I assure Kenyans in the US, whose remittances make up the largest chunk of diaphragm funds that the Kenya Kwanza government will enact changes that will change their lives positively," Mutua said.


This comes at a time when Kenya is also seeking to strengthen its trade with the US, with talks for a pact ongoing.

Elections and change of administrations in both countries disrupted the talks which began in July 2020 during former Presidents Donald Trump and Uhuru Kenyatta’s tenures.

After the US elections in November 2020, Joe Bidens’s administration took time to review part of the pact before initiating a fresh round of negotiations.

This however stalled this year when Kenya went into an election, which saw President Ruto elected, with little engagement during the transition period.

President Ruto has since committed to stregthen ties with the US.

He will be heading to Washington in December for the US-Africa Summit to be hosted by Biden between December 13-15.

"Kenya is ready for more trade deals with the US under the AGOA programme,” Ruto said when he recently met a US delegation led by US Deputy Secretary of Agriculture, Jewel Bronaugh, at State House, Nairobi.

Kenya largely exports apparel products to the USA with the potential to export more products including value-added tea, coffee, and cut flowers.

The government has been keen to secure a free trade pact ahead of the lapse of the African Growth and Opportunity Act (AGOA) in 2025, which eliminates import tariffs on goods from eligible African nations.

More than 70 percent of Kenya's exports to the US are duty-free under AGOA.

With a bilateral deal, Kenya is keen to tap at least five per cent of the US market, which has the potential to earn the country more than Sh2 trillion in export revenues annually.

The new Trade, Investment and Industry Cabinet Secretary Moses Kuria is expected work closely with the US trade representative Katherine Tai to revisit the talks, taking over from where former CS Betty Maina left.

Last year, Kenya's exports to the US grew to Sh59.5 billion, up from Sh49.3 billion previous year, with increases in the exports of macadamia nuts and articles of apparel and clothing accessories.

The US is the largest export destination of Kenya’s apparel, accounting for over 90 percent of garment exports every year, a sector that stands out as the biggest beneficiary in an improved trade environment under the FTA.

On November 4, CS Kuria held a virtual meeting with US Trade Representative Tai.

During the virtual meeting, Kuria and Tai shared the objectives of the two governments as reflected in the joint statement launching the Kenya-United States Strategic Trade and Investment Partnership on July 14.

The two discussed opportunities to engage in the near future “to pursue a strong working relationship that advances common goals”.

This includes expanding bilateral trade with benefits that are broadly shared, and inclusion of women, youth and others in trade, Kenya’s trade ministry said in a statement.

Kenya and the US are also keen on supporting growth of SMEs as well as advancing the African continental trade integration.

“The two expressed an interest in meeting in person in Washington in December on the margins of the upcoming United States-Africa Leaders Summit,” Kenya’s trade ministry said.

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