How Kibaki started looking East for investment capital

Former President Mwai Kibaki. [File, Standard]

At the height of post-election violence in February 2008, US President George W Bush dispatched the most senior member of his administration to Nairobi to weigh in on the ongoing mediation efforts led by the former Secretary General of the UN, Kofi Annan.

After a meeting with Annan, US Secretary of State Condoleezza Rice issued a terse statement aimed at urging both sides to conclude negotiations and end the violence. “I believe the time for a political settlement was yesterday, it is really important that this is done and done urgently,” she said.

Ms Rice said the United States was not imposing a solution on Kenya, but said Nairobi could not enjoy “business as usual” with Washington until the crisis was resolved.

Two weeks later, President Mwai Kibaki and his rival Raila Odinga signed the National Accord, a power-sharing deal that ended the violence and ushered in a new era of governance in Kenya. In the two months leading up to the deal, Kenya found itself isolated from the international community as global news channels broadcast images of rioting and looting in parts of the country.

The road to recovery from the worst socio-political crisis Kenya has ever known seemed uncertain and lonely. Six months after the deal was signed, US financial giant Lehman Brothers filed for bankruptcy, triggering a global financial crisis.

It was in this context that China stepped in to fill a void left by Western investors, establishing a firm grip on the Kenyan economy that persists to this day. Kibaki had already started preparing for the Asian dragon long before the United States warned against cutting economic ties with Kenya, and years before the global financial crisis.

In 2004, two years after being sworn in for his first term, Kibaki paid an official visit to China, the first by a Kenyan head of state in more than a decade. The following year, Kenya and China signed a Development Cooperation Framework Agreement which set out the terms for strengthening bilateral relations between the two countries.

President Kibaki and his Chinese counterpart, Hu Jintao, asked their ministers to define areas of cooperation in politics, trade and economy, education and culture, and health public.

China then opened the Confucius Institute at the University of Nairobi, making Kenya the first country in East Africa to host the cultural institute. During President Kibaki’s first term, hundreds of senior Kenyan government officials and specialists visited China for seminars on knowledge exchange programs and benchmarking.

It is therefore not surprising that Kenya has become a major node of China’s Belt and Road Initiative, further strengthening the country’s ties with the Asian superpower.

According to data from the Kenya National Bureau of Statistics, Chinese exports to Kenya grew from 167 billion shillings to 390 billion shillings between 2006 and 2012, representing an average annual growth of 37 billion shillings. By 2013, China had overtaken Europe and America as the fastest growing source of foreign direct investment in Kenya year-on-year.

The effect of China’s renewed focus on Kenya has also served to boost foreign direct investment from the wider Far East.


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