Nairobi eyes greater trade with Jo’burg
President William Ruto has invited South Africa to tap opportunities in Kenya to spur help fast-track growth while deepening trade relationships between the two countries.
The call targeting private investors centred on his need to fast-track infrastructure development, affordable housing and manufacturing.
His hope is that the deals will be sealed through the public-private partnership (PPP) funding model to ease pressure on the country’s budget. This entails firms setting up projects and then taxpayers pay for the services.
The call for investors aligns with Kenya Kwanza’s plan to deviate from debt-funded projects, which has contributed a significant chunk of Kenya’s debt stock.
Plenty of opportunites
“We have huge opportunities in Kenya for private sectors in South Africa and business entities. We have huge opportunities in our housing and settlement plan. We are short of 200 million houses, and we want SA companies to come and work with us,” President Ruto said yesterday during trade talk with his South African counterpart Cycil Ramaphosa.
The trade forum had over 350 investors from both Kenya and South Africa, who were drawn from banking and investment firms, state corporations, and manufacturing.
Affordable housing was one of the key pillars of the infamous Big Four agenda launched by the former regime in 2017 which Ruto was part of. It targeted building 500, 000 houses by the end of 2022 but the implementation proved too hard.
President Ruto recently launched a housing programme in Kibra, pledging to construct at least 200,000 houses in the next one year.
Other key sectors that the administration will be eyeing to attract investors include water and irrigation, health, and roads.
“We are going to work with the private sector to deliver on our water harvesting program. We have already lined up the first 100 big dams which we want to build using the water purchase agreement instrument,” Ruto added.
Despite their great potential, the two countries traded only $366 million (Sh44.6 billion) last year, which shows the need for synergies to spur trade.
Big trade gap
Kenya’s trade gap with South Africa stands at about $440 million (Sh53.6 billion) as of 2021, importing close to $478 million (Sh58.2 billion) while exporting a meager $30 million (Sh3.6 billion).
SA is big exporter of coal, steal, furniture, chemicals, cosmetics, and edible fruits to Kenya while getting cut flowers, avocado and tea in return.
The two sides also exchanged views on pertinent regional trade, reduction trade barriers, financing and market access for small businesses, and value addition, and relaxation of strict visa requirements.
“As we make these breakthroughs as a government, we are saying we want the private sector to follow suit to see all these opportunities that can be capitalized on,” SA president Cyril Ramaphosa said.
Kenya is also expected to establish two bonded warehouses in Johannesburg and Pretoria to support small businesses access the Southern market, putting the country on the right path towards bridging the wide trade gap.
There is also a recommendation to establish a special fund for SMEs in the two countries as part of healing a funding headache among players in this sector.