Kenya Investment Forum - Toronto Session (March 27th 2007)
I had the opportunity to attend the Kenya Investment Forum session held in Toronto in late March after a similar events that was held earlier in the month in various US cities including Atlanta, GA and Minnesota, ME.
Lots of other bloggers have covered the events and there was a particular focus on blogging on Mr. Kimunya’s presentation and as it happens, we saw the very same one in Toronto.
I found it very telling that the Kenyan Government choose to present Vision 2030 to Kenyans in the diaspora at exactly the same time that the plan was being revealed to Kenyan back at home for reasons that seem very clear to me. To some extent, non-traditional media coverage of the various forum events focused on political issues which muddied the waters significantly since this event was all about luring capital for formal investment. It seems however that the Governments reasons for choosing to pursue this path are therefore more fiscal than political. Bearing this in mind, I, however, want to focus on a slightly different aspect of the series of conferences that the Kenyan government held for Kenyans in North America and more specifically in Canada: the issues associated with implementation of Vision 2030 from the viewpoint of those in diaspora who will contribute through remittances.
In an effort to do this, aside from paying very close attention to Mr. Kimunya’s very informative and educational presentation on the immediate past of Kenya with a focus on 4 years of NARC governance, I found a presentation that came after Mr. Kimunya’s by Dr. Wahome Gakuru, a gentleman whose formal title is Director, National Economic and Social Council (NESC) but whose real job is acting as Project Co-ordinator - and thus front man - for Vision 2030 very compelling. He gave a second presentation that was essentially an addendum to Hon. Kimunya’s presentation that dealt with the specifics of implementing Kenya’s ERS (Economic Recovery Strategy) under the Vision 2030 plan.
(Thanks for the heads up Koranteng, link should now be OK)
After the talk, I was able to get his attention and talk to him for less than five minutes about some of the finer points around the approach that the Kenya Government had taken to conquering the huge task of moving Kenya from the rank of developing nations. When one has an interview window of only a couple of minutes, it pays to choose one’s questions wisely so I abandoned my initial set of questions on how the government intended to deal with the issue of formalizing remittances and made a decision to dive straight into the meat of the subject of implementation.
My initial question was the obvious one; the ERS that Kenya has proposed and has effectively began to implement is a very aggressive one that aims at getting Kenya to a 10% growth rate and hold it there over a 20 year period. Attaining this goal will obviously be very very difficult. I asked Dr. Gakuru what other nations were being used as case models to provide lessons on what to do towards achieving this ambitious objective, the success factors that had contributed towards making this happen and why they thought Kenya was in a good position to actually achieve this.
His response to me was very telling:
“The other 2 nations that have done this are Equatorial Guinea - whom, of course, have oil - and China.
China’s success is based on careful planning… careful strategic planning.
(emphasis mine)
The implication of course was that without mineral resources, the key to success was strategic thinking and it seems that a serious amount of this has gone into preparing the multi-faceted plan that Kenya is currently executing. And the cornerstone of this strategy is convincing anyone who has money to invest that Kenya is a great place to put it into. Even better was the fact that the statistics and supporting documentation presented by Hon. Kimunya about Kenya’s economic performance over the last 4 years indicated very strongly that was indeed the case.
Afterwards as the session broke up, I had the opportunity to talk to another of my interview targets, Mr. Eddy Njoroge who is the Managing Director of KenGen. The availability of cheap power if obviously the key to development and anyone will tell you that power in Kenya has over the course of the last decade proven to neither be cheap nor abundantly available. I hoped to talk to Mr. Njoroge about what KenGen was doing to expand supply capacity to the point where it at the very least begins to match demand as well as keep the cost of power to levels that were attractive to investors who might be interested in power-hungry projects.
Our conversation was a little longer and revolved around the challenges that KenGen faces in generating power for the Kenyan market as well as opportunities that have opened up for the organization in Kenya.
When I asked Mr. Njoroge about how KenGen was trying to mitigate the financial effects of having a mandate as narrow as the one that his organization has - generating electricity for Kenya - he responded by letting me know that KenGen has managed to tap into a new and significant revenue line in the consulting sector providing expertise in the area of power generation especially for African nations with multiple projects currently underway around the continent staffed by KenGen personnel in consulting roles.
We also talked a little about spend areas for KenGen: I was very surprised to learn that on the books, KenGen’s revenue has doubled in the recent past, thanks to the fact that they are required to book the cost of fuel that the organization uses to run generators as revenue since those costs are then passed on the to the consumer. I now realize that this must be wreaking havoc on their tax position. Mr. Njoroge also indicated that the other key spend area into which KenGen puts huge a huge amount of money is system maintenance and purchase of spare parts from OEMs.
I had prepared some pointed questions about remittances and Kenya’s policy/position on them but was unable to get an opportunity to speak to the minister before he left the the facility at which the event was held. I do have his email address though so I will be sending them out.
Who knows, I may even get an answer.
A sad aside to the event, at this session, I had the opportunity to meet and chat briefly for the very first time with Rispah Adala whom was also serving at the time as the Treasurer of KCO. My prayers go out to her family and friends in their time of grief.
This entry was posted on Sunday, April 22, 2007 at 8:53 pm. You can follow any responses to this entry through the RSS 2.0 feed. You can also leave a response or trackback from your own site.
7 Responses to “Kenya Investment Forum - Toronto Session (March 27th 2007)”
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Koranteng Ofosu-Amaah says:
April 22, 2007, 10:38 pm -
benin says:
April 22, 2007, 11:12 pmNtwiga:
Thanks for the excellent run down. It sounds like you really utilized your time wisely during the event. Thats great. Interesting point that you made about Dr. Wahome Gakuru essentially playing the role as a front man for the Vision 2030. You know in comparing his speech to Kimunya’s initially I just figured that he had a very tough act to follow in speaking directly after the finance minister. AT one point I even thought that his speech, since almost a carbon copy or tailored summary of Kimunya’s was not even necessary. But your synopsis actually makes more sense. I am glad that you answered my question about how Dr. Gakuru came to see E.G. and CHina as role models.
Because until reading your explanation-it was somewhat difficult for me to find how China (a state directed economy) and E.G. (oil rich nation who some might say was run like proprietorship) fit into the Kenyan context. Since the country’s inception and even during the turbulent Moi era the coountry has always stood out in East Africa as a country that has never doubted it’s place as a free market economy. However, there is always more than one side to a coin. And as you have correctly pointed out China has been very startegic in their planning and E.G. has been a powerful magnet for foreign direct investment lately. And again, Kenya seeks to attract higher levels of overseas investment. And somehow, I believe that with the diversified economy that Kenya boasts and the country’s role as the big investor to the adjoining neighboring states, that Kenya can achieve much more than EG with or without oil (which I am told has been located, is that a rumor?). Perhaps in 30 to 40 more years Kenya might even be a bigger success story than China’s too!
Steve, this is an excellent post. You are very multi-faceted in your range and depth of topics, great job!
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musa okoth says:
April 23, 2007, 8:29 ameconomics aside, my question is: steve, wapi muziki ya wiki hii bwana?? ama hujui there are those of us who literally look forward to friday because of the music yawa!!
Jarateng,
Forgive me, I just realized that I did not post anything Friday night when I saw your comment. Life has been hectic bwana, wacha nipost muziki leo jioni.
I will put up a whole bunch of tracks with a couple of extras to make up for being late when I get back home tonight.
- Steve
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Steve Ntwiga Mugiri » musical link: Franco, Madilu Coeurs and Tony Nyadundo says:
April 23, 2007, 11:58 pm[...] like I have been naughty, I could have sworn that I posted a couple of tracks this last Friday but Musa now reminds me that I did [...]
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Global Voices Online » Kenya: Kenya Investment Forum in Toronto says:
April 28, 2007, 12:06 pm[...] Kenyan blogger and Global Voices author, Steve Ntwiga, attended the Kenya Investment Forum in Toronto, Canada: “I found it very telling that the Kenyan Government choose to present [...]
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Sachin Kumar says:
August 1, 2007, 8:20 pmHi,
Is there a way that individual invstors who are not citizens of Kenya can invest there in say, stocks or funds?
Regards
Sachin
sachin_chander@yahoo.comNot sure as this is not my forte. Try bankelele for tips on investment.
But if you are really serious about this, I suggest getting in touch with an investment advisor in Nairobi. They are not expensive and will give much better advice than you can get ad-hoc from people like me.
- Steve
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Maroa Matiko says:
August 22, 2007, 5:19 pmHi Steve,
may you be in a position to know any person/organization/group of people who(that, ect) can help a young Kenyan entrepreneur/investor roll his business…
Otherwise, great job, Steve
Matiko
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Just an fyi: a broken link to the presentation…
I’m actually quite interested in seeing the Kenyan plan and comparing it to those of Ghana and Nigeria. The economies are different but are facing many of the same external strains… A decade of high economic growth would cure many things.
I’ve been poring over the Economic Report on Africa 2007 for the past week trying to wrap my head around this development quetion. The UN statistics are easier to follow than say the World bank/IMF ones but nothing beats the local perspective.
The issues for the diaspora are the same of course: more efficient remittance mechanisms would help for starters. One hopes we can follow the lead of the mexicans and salvadorans on the one hand and the Filipino model which is probably the gold standard for harnessing the diasporan contributions.