M a r k e t N e w s

How to advance Kenya economic, political interests through TICAD

Posted on : Wednesday, 7th September 2016

 This weekend, Nairobi hosts the sixth Tokyo International Conference on Africa’s Development (TICAD) and the first outside Japan.

 
The Nairobi summit is expected to build on various resolutions made during the TICAD V in 2013, which had focused on six issues. They included boosting economic growth; accelerating infrastructure development; empowering farms; promoting resilient growth; creating inclusive society for growth; and consolidating peace, stability, democracy and good governance.
 
As a host of the TICAD summit, Kenya stands to gain enormously. The hospitality, tourism, aviation and taxi service sectors stand to benefit from over 10,000 delegates attending the meeting.
 
Nairobi will also enhance its status as a hub for multilateral diplomacy. On the other hand, Kenya-Japan relations will be boosted as the two leaders engage in deepening bilateral ties.
 
How will Kenya benefit from the TICAD process in trade, industrialisation, investment, infrastructure development and tourism?
 
Tourism is one of the key sources of foreign exchange for Kenya. In recent years, the sector’s performance has been affected by insecurity, travel advisories and Ebola outbreak. Japanese tourists to Kenya decreased from 22,400 in 2013 to 10,500 in 2015.
 
In the last 10 years, Kenya has made modest gains in attracting tourists from emerging economies. As Kenya and Japan deepen their bilateral cooperation, attraction of more tourists from Japan could be part of the country’s strategy in exploring both traditional and new markets.
 
Though trade has increased between Kenya and Japan over the years, the persistent trade imbalance heavily favours Japan. For instance, value of Kenya’s imports from Japan increased from Sh56.6 billion in 2011 to Sh88.2 billion in 2015.
 
On the other hand, Kenya’s exports to Japan increased from Sh2.3 billion in 2011 to Sh4 billion in 2015.
 
Kenya’s exports to Japan comprise mainly tea, fish fillet, coffee, nuts, raw tobacco, sisal and textile fibres and cut flower while Japan’s exports to Kenya include vehicles, auto parts and engines, iron and steel products, machinery and rubber tyres.
 
It is critical to explore how Kenya could increase its exports to Japan to address the problem of trade imbalance.
 
Since industrialisation has been identified as an important tool for economic growth, deeper cooperation with Japan could play a significant role in the realisation of Kenya’s industrialisation agenda.
 
In the last decade, Kenya’s manufacturing sector has been stagnated at about 10 per cent of the GDP. With regards to investments, Kenya can directly engage specific Japanese firms, targeting those that form a bulk of imports from Japan.

Source : www.businessdailyafrica.com
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