What you need to know:
- China is not really a big thing in terms of trade with Kenya.
- We export more and earn more from Uganda, Tanzania and Rwanda and others in the region than what we earn from trading with China.
Uncle Sam came to visit the other day. But the frenzied welcome given to POTUS aroused so much dust that there was no opportunity to reflect on who Uncle Sam (US) is to Kenya’s development and whether China is really worth the praise it receives in some circles.
Now that the dust has settled, there is room for review on who the US actually is to Kenya, and whether China makes any difference in our development agenda. There is a group of ‘business politicos’ or politically influential middlemen who have been selling China as the way to go from the early days of President Mwai Kibaki’s reign. After tongue lashing over issues of corruption, they advised the government to troop to the ‘east’.
These business politicos have conceived and portrayed China as a very good friend of Kenya’s development agenda. But they really do not say why they love China. They love China not because China does not care about issues of governance or that China does not do tongue lashing. They love China because of the money they make by opening doors to Chinese businesses.
But China is not really a big thing in terms of trade with Kenya. Africa, America and Western Europe are far more important than what China is assumed to be. In terms of trade relations, Kenya has more goods traded with African countries and especially with neighbours in the region than goods traded with China.
We export more and earn more from Uganda, Tanzania and Rwanda and others in the region than what we earn from trading with China. In 2013 and 2014, Africa in general represented about 45 per cent share of our export earnings.
Europe represented 22 per cent. The countries in Europe contributing a significant share of export earnings include the UK and the Netherlands.
Asia represented only 18 per cent of our export earning. This includes trade with China, India, Japan among other countries. China was not even the main trading partner in Asia in 2013 and 2014. Total earnings on exports to China was about 1 per cent.
We have more earnings from export with Pakistan, Afghanistan, and United Arab Emirates (Dubai), than from China. Our earnings from any one of these countries, individually, is more than double our export earnings from China. China in fact represents only 10 per cent of the share of earnings from our exports to Asian countries.
Earnings from exports to US have been on increase. America, in fact, represents close to 15 per cent of share of export earnings. Our earnings from exports to the US are more than four times those from China.
China announces presence through visible gigantic projects
China has been paraded as the most important actor in Kenya’s trade relations as well as in development. True, the mega infrastructure projects like the roads, the railway line, the ports (Mombasa and Lamu), have been portrayed as gigantic development solutions. They have been given the image of the ‘magic bullet’ that has never happened in Kenya.
This is the strategy China is using everywhere in Africa. There is a reason for this. Until very recently, China’s goods in Africa were ‘renown’ for poor quality and cheap pricing. That was the fame of China in Africa: Cheap, not durable, small, and poor standard.
But China has to change all this. The country has to announce itself on the world stage by doing what the West does not do — big things. This cannot be done without repackaging products and creating a new ‘selling image’. This is the image of mega projects everywhere in Africa and now in Kenya.
In Kenya, America is big on development assistance
Even though development assistance is not a very important indicator for Kenya’s development, the figures of who gives how much to Kenya are an important guide about who the real players are. This is the amount they give to support development programmes in various fields.
What is quite clear in terms of development assistance is that it is only Western Europe and America (plus Japan) that have been visible. In the development budget for the 2012/2013 period, Germany gave almost 60 per cent of the total grants followed by Denmark at 11 per cent.
But China came big in 2013/2014 fiscal year by giving grants amounting to 28 per cent of the total grants supporting the development budget. Much of this was meant for the railway and other mega projects. Western Europe and America filled major gaps.
Simply put, western Europe and America have been the main players in our development. America, Denmark and Germany have been leading in this respect. US accounts for close to 40 per cent of the total development assistance. Britain accounted for about 12 per cent and a similar share for EU institutions. Denmark, France and Germany are also major players.
China is just big on loans
A close look at the 2014/2015 budget support by donors shows how illusory China is: They are big in giving big loans. China accounted for 33 per cent of the total loans for the 2014/15 budget. Japan was next at 21 per cent and France at 17 per cent.
In the previous year, China at 43 per cent share of total loans to the government again was leading as the lender. In 2012/2013, the share of loans by China was 51 per cent of total loans to the government.
In the same period, Denmark, US, and Japan topped the list of the countries giving more grants to the government of Kenya. Not China. China was giving loans. Japan was giving both loans and grants.
Here in lies the difference. China is big on loans. They give big loans. Traditional partners do not give a lot in terms of loans. They give grants.
The journey to the ‘east is not real’. We seem to gain more trading with other African states than trading with China. China seems to get more from us particularly because they are focussed on giving loans rather than encouraging trade.
The American ‘know it all’ spirit spoils it all
Although America tops the list of the countries providing development assistance, there is something that is not very good with their approach to development — ‘they know it all’ even when they know little about local conditions.
A close look at America’s development assistance in the last three years shows a growing interest in at least four areas. Agriculture, health, governance, and population related issues. These are the areas whose share of US assistance is relatively more compared to other sectors such as education.
The problem, however, is that not all that America and other traditional partners fund pays dividends. The Americans have a tendency to adopt the attitude of ‘know it all’ and ignore what Kenyans know can make a difference.
What they give ‘from the American people’ may be much but the impact on national development remains quite difficult to show. They ‘know it all’ and give little attention to what recipients may say.
You will not find America building big infrastructure projects in the rural areas. Yet the concern of ordinary farmers and livestock keepers is good infrastructure such as roads, and feeder roads.
All the same, support to Kenya communities must take a new turn. Kenya and partners must re-invent themselves to build a strong foundation for development.
It is only innovative approaches to development that will make a difference. Without this approach, there will be minimal impact of development assistance. And China with its ‘big bang’ mega projects will continue to dot the country without real connection to people’s livelihoods.
Prof. Karuti Kanyinga is a researcher at the Institute for Development Studies (IDS), University of Nairobi, [email protected]