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Kenya makes big entry into US market
Author: Karoli Ssemogerere. PHOTO/FILE
What you need to know:
- "We need a bigger conversation on the how and the why, Kenya and Tanzania are moving much faster than us.”
Kenyan President William Ruto makes a big foray into America’s Silicon Valley selling new products to the American economy. The IT age has made Kenya home to the region’s largest telecommunications company, Safaricom, a hub of tech innovators, app developers that have reduced the use of cash for transactions in Kenya by 70 percent. MPesa has been a big export, MPesa platform is the biggest mobile money operator in both Kenya and Tanzania. In 2017, Kenya attained middle income status.
In 2023, Kenya’s GDP passed $100 billion. Slowing population growth has increased income per capita even though a big underclass especially in urban areas, an issue that explained ambivalence to the former ruling party whose coalition disintegrated right before former president Uhuru Kenyatta’s eyes. His preferred successor Raila Odinga lost key constituencies, Ford Kenya, Amani in Western province and a small slice of Eastern province’s voters in the race to reach 50+1 in the final vote tally.
The Ruto administration has successfully kept US relations at a very high level. US First Lady, Jill Biden, US-Africa Sub-committee Chair in the US Senate, Chris Coons, very close to US President Joe Biden. Kenya and Tanzania continue to enjoy the lion’s share of tourism arrivals. The US Foreign Aid program in Kenya is 9 times the size of Uganda’s. US pressure forced Raila Odinga into talks with Mr. William Ruto, even though the talks have not broken the logjam. Against an empty treasury, Kenya was forced to hike key taxes, doubling VAT on petroleum, raising the top income tax band, percent%.
In another way, Kenya has also benefited from a high-profile US Ambassador Meg Whitman, former E-Bay CEO, Republican candidate for Governor of California in 2010. A few days ago, she led Ruto on a roadshow in the Silicon Valley, extolling the virtues of Kenya’s smart economy. She pointed out that Nairobi is home to the region’s largest stock exchange even though returns tanked in the last five years, bringing grief to big balance sheets like our NSSF.
As a political appointee, she enjoys special access to the political classes and carries more weight than a career diplomat. People are more willing to listen. As a big businesswoman in her own right, moved from E-Bay to Hewlett Packard, with mixed reviews but is an easily recognizable name on America’s richest politicians.
Appointments to Kampala have been less political, but postings have seen more high-profile career Ambassadors, Nancy Powell, Johnnie Carson who both later served as Assistant Secretaries of State are long in retirement. In short, something in the foreign policy has to happen. In the international scene, Uganda is branded more for security, terrorism, disease control and social support. The efforts to sell more tourism, more value addition or even food basket have yielded mixed results. Key areas in the economy remain under-promoted but most important lack big American names behind them. Rwanda successfully sold its post-genocide story to even higher levels of American society, the Bill Gates, Warren Buffet at that level.
Uganda has caught on to some of the basics, even though a bit late, like a national carrier. Meg Whitman in sounding stronger tones for Kenya stated Nairobi has 40 carriers flying in and out of Nairobi daily. Nairobi has a long- haul intercontinental flight from Nairobi to the New York JFK. And in one note that hit closer to home, Meg Whitman chimed further, Kenya has recently overtaken Uganda in value of total exports to the United States.
At this point the question that begs, do we need to fix the politics first before we fix the economy. Is our political economy the problem? listening to a top mandarin at the helm of Uganda’s financial sector. Has the politics of eating a little, sleeping more soundly numbed the soaring heights of the economy. We need a bigger conversation on the how and the why, Kenya and Tanzania are moving much faster than us.
Mr Ssemogerere is an Attorney-At-Law and an Advocate. [email protected]
