Ajabu Africa News

PHOTO:

Parliamentary Transport committee chairman Maina Kamanda, Kenya Railways MD Attanus Maina and China Road and Bridges Corporation Kenya deputy chief engineer Zeng Chao during a review of work on the Standard Gauge Railway at Port Reitz in Mombasa, February 14, 2016. Photo/ANDREW KASUKU

By:

RICHARD MUNGAI

Posted:

Mar,24-2016 13:18:57

Kenya has reaped big gains from China's presence in Africa despite a huge trade imbalance between the two countries, the World Bank has said.

A report published on Thursday stated the benefits have mainly come through the shipping of affordable goods to Kenyan consumers.

It also cited the financing of critical infrastructure projects which were previously overlooked by traditional investors from the Western countries.

One such project is the Standard Gauge Railway linking Nairobi and Mombasa, which is being developed by the China Road and Bridge Corporation.

"China's loans compete with loans from traditional donors that attach conditions of good governance and transparency," World Bank said in the report titled 'Deal or No deal: Strictly Business for China in Kenya'.

"Uninterested in the politics of the country, China funds major infrastructure projects in Kenya."

World Bank said the allegation by researchers and journalists that China is in Africa to get land and natural resources is meaningless. This, it said, is because the stereotype ignores the useful role that the Asian nation plays in Kenyan economy.

"In Kenya, Chinese firms invest in more than just natural resources. They also invest large amounts in the communications and automotive original equipment manufacturing sectors," it said.

World Bank further said Chinese firms employ a majority of local workers in full-time and part-time roles challenging the stereotype that Chinese firms only use Chinese labour.

"Workers also receive basic skills, safety and hygiene training. Chinese firms can offer even more training if Kenya promotes local capacity building and technology transfer."

The report stated that the economic slowdown in China, coupled with a transition to a consumption based economy, will be a big boost to Kenya's exports, mainly cut flowers.

"Oil-importing countries such as Kenya will be shielded from China's slowdown and should even see an increase in their exports," it said.

"Kenyan exporters of services such as tourism will fare well as China transitions to a consumption based economy by 2030."

Data by the Kenya National Bureau of Statistics data shows the value of Kenya's imports from China stood at Sh295.39 billion in 2015. KNBS does not capture the value of Kenya's exports to China since it is too small.

The report links the huge gap in Kenya's balance of trade to over-reliance on agricultural and commodity exports and an underperfoming manufacturing sector.

"Kenya can enhance its growth in manufacturing if it continues to attract foreign direct investment from China," the report stated.

Source:

The Star