Inside Uhuru’s Sh20bn basket of goodies from London

Small businesses are some of the big winners in President Uhuru Kenyatta’s three-day visit to the UK where he is the co-host of the Global Education Summit with Prime Minister Boris Johnson. 

In what’s projected to resuscitate an ailing economy, he secured more than Sh20 billion in investment deals from London that will boost small and medium-sized firms paralysed by the pandemic.

In a meeting with President Kenyatta at Mansion House in London, British Foreign Secretary Dominic Raab said the investments will focus on housing, finance, renewables, and entrepreneurship.

“This £132 million (Sh20 billion) package of new UK-Kenya deals will support investment in the region, including building new green affordable homes, connecting households to clean energy, and boosting manufacturing. It will create new jobs and unlock new opportunities for UK and Kenyan businesses,” said Mr Daab.

President Kenyatta also launched the Nairobi International Financial Centre (NIFC), which seeks to rival Johannesburg and Casablanca as the top financial hubs on the continent.

MoU

He later witnessed the signing of a new memorandum of understanding between TheCityUK, a private-sector membership body and industry advocacy group, and NIFC Authority, establishing a formal partnership, including closer collaboration with the London Stock Exchange.

This will help to channel international investment into Kenya and the wider region, making sure firms and investors are able to make the most of trade and business opportunities. British insurer Prudential intends to be the first firm to set up in Nairobi’s new financial centre.

President Kenyatta invited UK investors to tap into emerging business opportunities in Kenya, saying the country remains one of the most attractive investment destinations in Africa.

“Kenya continues to pursue initiatives aimed at lowering the cost of doing business. Significant investments have been made to improve the quality of infrastructure, with our infrastructure ranked amongst the best in sub-Saharan Africa,” he said.

There are more than 100 UK firms in Kenya, including Unilever, ACTIS, De La Rue, Diageo, Vodafone, BAT, Diageo, Standard Chartered Bank and GlaxoSmithKline.

Investment commitment

SMEs, which are bearing the brunt of the Covid-19 pandemic, will receive investment commitment from top British financiers to scale up their operations through the Sh180 billion (£1.2 billion) UK-funded Manufacturing Africa programme, which commenced in 2019.

UK Deputy High Commissioner to Kenya Julius Court recently said the seven-year program, which targets financing to capital-intensive businesses in agro-processing, textiles, pharmaceuticals, industrial parks and electronic products, will stimulate creation of thousands of new jobs and stimulate growth of the local economy.

The programme has already unlocked Sh4.2 billion (£28 million) to SMEs. “To its credit, the government has made positive changes to the country’s business policies which has made a huge difference to investors who were holding back but are now coming to invest in the country,” Mr Court said.

Importers and exporters will also reap big after President Kenyatta secured a grant of Sh2.7 billion (£18 million) through the Foreign, Commonwealth and Development Office (FCDO), to complete the operationalisation of the Integrated Customs Management System (iCMS) to fasten movement of goods into-and-out of Kenya.

Cut cargo clearance time

The system, which went live in the last quarter of last year and is over 90 per cent complete, has cut cargo clearance time by over 50 per cent to smooth international trade, one of the pillars in the government’s economic turnaround plan after the pandemic.

The President also received a Sh500 million (£3.3 million) investment commitment from InfraCo Africa to finance the expansion of off-grid solar in the Western region, and a further Sh560 billion (£3.7 million) to support hastened adoption of renewable energies and forest conservation. 

The investment is set to provide over 6,000 homes with cheap energy for lighting and pumping water.

The company will also invest an additional Sh140 million (£0.9 million) in Nopea Ride, an electric taxi service in a boost to drivers whose earnings have been significantly cut due to fare price hikes following adjustments by taxi-hailing companies over higher fuel costs.

UK manufacturing firm ARC Ride has also committed Sh680 million (£4.5 million) to expand their fleet of electric vehicles on Kenyan roads to further grow the transport sector that employs over two million people.

Gold mining

Artisanal miners in gold-rich counties such as Migori will also win big after mining firm Mayflower Gold, which employs 400 people, will float Sh2.1 billion (£14 million) shares on the London and Nairobi stock exchanges to unlock new funding to expand its operations in the country.

The funding is expected to create hundreds of new jobs to small-scale gold miners across the country as Kenya races to increase the contribution of its mineral resources to the economy.

Meanwhile, low and middle-income households also received a boost in their quest to own affordable houses after the President secured a Sh8.7 billion (£58 million) deal to build environmentally friendly low-cost homes, which is part of the government’s Big Four Agenda.

The government plans to build 500,000 affordable houses by next year. 

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Utility: Uhuru’s basket of goodies from London

• A new Sh8.7 billion fund, anchored by Sh5.2 billion of UK government investment, which will finance the construction of 10,000 green affordable homes in Kenya.

• Sh4.2 billion of private investment in Kenyan manufacturing through the UK’s Manufacturing Africa initiative.

• Sh2.7 billion of UK grant funding for a digital customs system to help smooth Kenya’s international trade, including with the UK, and allow firms to take greater advantage of the UK-Kenya trade deal ratified at the start of 2021.

• Sh675 million investment by UK company ARC Ride to expand their fleet of electric vehicles in Kenya.

• Sh495 million investment from UK-backed InfraCo Africa to finance expansion of off-grid solar in Western Kenya, providing 6,000 Kenyan homes with access to clean energy.

• Sh555 million support from the UK government to back Kenya’s green transition including projects supporting renewable energy, clean cooling, and forest restoration – including Kaptagat Forest, a project spearheaded by Kenyan marathon legend Eluid Kipchoge

• Sh150 million of UK aid funding for technical support, to structure Kenyan infrastructure projects so they are able to attract private investment.

• Sh135 million investment from InfraCo Africa, backed by the UK government, in Nopea Ride, an electric taxi service.

• Sh75 million of UK funding for policy advice on how to support the development of green manufacturing in Kenya, including of electric vehicles.

• Mayflower Gold, a Kenyan mining company that employs 400 people, will float Sh2 billion of shares on the London and Nairobi stock exchanges.