Minister in the Presidency of South Africa, Dr Nkosazana Dlamini-Zuma, has urged African countries to boost investment in infrastructure to encourage economic integration across the continent.
Minister Dlamini-Zuma’s message was delivered by Dr Gopalan Padayachee, special advisor in the Presidency, who said this move could increase real income across the continent by US $37-billion.
Addressing delegates at the 3rd annual Kenya Trade and Investment Summit, hosted by the Kenya High Commission in Johannesburg, South Africa, Padayachee – on behalf of Dlamini-Zuma – said the integration will have to be people-driven and inclusive.
“We all know the benefits of facilitating free movement of goods, services and people when we open our borders and integrate. Africa’s GDP would increase as high as 6% every year,” says Dlamini-Zuma.
The summit is aimed at increasing bilateral trade and investment between South Africa and Kenya, the largest economy in East Africa. In 2016, the two nations signed a Memorandum of Understanding (MoU) to boost flow of trade and investment between the two.
Kenyan High Commissioner to South Africa Jean Njeri Kamau told delegates attending the summit that since the beginning of these summits in 2015, Kenya’s trade deficit has shrunk by about 4%.
“Kenya is ranked 27th amongst South Africa’s global export destinations accounting for just about 1% of South Africa’s total exports and ranked as the 10th export destination for South Africa’s goods among African countries,” she says.
She adds that Kenyan commodities have made inroads into the South African market, thanks to the lifting of tariffs against coffee, which has seen an increase in coffee exports from 1,1% of total South African coffee imports in 2014 to 1,7% in the last few years.
Kenyan companies are also increasing their presence in South Africa, taking advantage of investment opportunities that exist in Africa’s biggest economy. This bodes well for strengthened economic ties between the two countries.
“Kenya Airways increased its flights between Nairobi and Johannesburg and introduced the Nairobi-Cape Town route which has seen daily flights increased to five. “Horticulture is growing steadily and remains a key area of focus for attention to remove all encumbrances through tariffs and other barriers,” says Kamau.
Sports Pesa, a Kenyan betting company, is now conducting online betting in South Africa and a proud sponsor of Cape Town FC.
Meanwhile Kenyan Foreign Minister Monica Juma says Kenyan government has implemented economic reforms to attract inward investment into Kenya and to encourage bilateral trade between Kenya and South Africa.
Juma says Kenya’s aim was to showcase the investment opportunities available in the country with a view to elicit interest not only in current investment projects but also in the country’s available business opportunities.
Juma adds that her government’s priorities for the period 2018 to 2022 lay in the country’s Big Four Agenda, namely; Healthcare, Food Security, Manufacturing and Affordable Housing.
“We have identified investments in the area of energy and infrastructure as being particularly crucial to our development, adding that various South African Firms had taken a keen interest in investing in the energy and infrastructure sectors, in Kenya using the public-private partnership model,” she says. “We laud the support received from the South African government through the Development Bank of South Africa (DBSA) and the Public Investment Corporation (PIC).”
Juma says Kenya had embarked on building an entirely new world-class railway system, and thousands of kilometers of road network to connect producers to markets.
“To this end, the first phase of the high speed, high capacity and efficient Standard Gauge Railway from Mombasa to Nairobi has been completed,” she told delegates.
With regards to healthcare, the expansion of public hospital infrastructure and the transformation of National Hospital Insurance Fund (NHIF) have improved access to quality healthcare for millions of Kenyans.
Within five years, the government plans to ensure that 13-million Kenyans and their dependents are beneficiaries of this scheme.
Other areas of importance include facilitating affordable housing and the manufacturing sector.
Juma says Kenya has already attracted foreign manufacturers into its local market, notably auto producers VW and Peugeot, which built motor-vehicle assembly plants. Kenya has also attracted investors that have set up fertilizer blending factories.
“We are targeting the creation of 1 000 SMEs in agro-processing. Our ultimate goal is to grow and sustain manufacturing sector and raise its share of the Gross Domestic Product from the current 9% to 15%.
“To achieve this leap, the power tariffs charged to manufacturers have been reduced by 50% between the hours of 10:00 pm and 6:00 am. This in line with our policy of a 24-hour economy,” Juma says.
The Kenyan government is also focusing on developing the following sub-sectors: agro-processing, textiles and apparel, leather processing, construction materials, innovation and IT, mining, and extractives.
Value addition for primary export products such as vegetables, tea, coffee, oil or gemstones is also been encouraged and supported by the Kenyan government.
“Our policies and actions as a government over the next five years will be to ensure that as much value and as many jobs, as possible are created and retained in Kenya,” Juma says.