East of Africa can be a gateway to huge investment opportunities. This region comprises mainly of
All these countries provide varied business opportunities ranging from agriculture to industrial sector. But business comes at a risk which an entrepreneur has to overcome to grow and expand. This region also faces certain challenges in form of weak civil laws, poor infrastructure, political instability and a harsh climate.
Bilateral trade already exists between Bharat and East Africa but the past decade has seen a burst of activity and initiatives – many of them private sector led – that have injected renewed vitality into Bharat and East Africa’s historical bond. Bharat has also launched DFTP( duty free trade preference) scheme under which duty free access is provided to exports from LDC’s( least developed countries) African countries.
There has been overall growth in bilateral trade between East Africa & Bharat, as can be seen in the table below –
|S. No.||Trade||2013-14 (in USD million)||2014-15 (in USD million)||Growth|
Kenya seated in the centre of East Africa, surrounded by Ethiopia to the North, Uganda on the West, Tanzania on the South and having a coastline along the Indian ocean, provides an amiable business environment. Service sector and agriculture are the main economic drivers of the Kenyan economy.
Top 5 items of import & export to Kenya (from Bharat) –
|Inorganic chemicals||Mineral fuels|
|Edible vegetables, roots and tubers||Nuclear reactors, boilers and machinery|
|Dried leguminous veg. shelled w/n skinned/split||Vehicles other than Railways|
|Coffee, Tea, Mate and Spices||Electrical Machinery and Equipments|
Agriculture provides largest employment but is largely inefficient. Among agri goods, Kenya exports high value cash crops comprising tea, coffee and horticulture products. All of these also form import items of Bharat. And as level of income and purchasing power of Bharatiyas will rise in future, demand for cash crops, especially fruits & nuts will further increase. Hence agriculture and related activities provide ample opportunity for investment due to the high growth potential. This could be in the form of owning or leasing tea farms or agriculture fields, and practicing commercial farming. There is abundant availability of cheap workforce but they need to be trained in modern ways of farming. By using a mix of improved seeds, better manure, and trained workforce the per hectare yield can be increased manifold. Good scope also exists for practicing organic farming. By forging partnership with the Kenyan farming community, better ways of organic farming can be evolved.
Just like Bharat, Kenya’s growth is also led by the service sector. The last decade has seen a huge expansion in tourism, education, and telecommunication – mainly led by private investment. Bharat has presented a remarkable model of evolving a service sector economy and has become the back office of the entire world. Similar opportunities exist in Kenya, provided some gaps can be closed. The transport sector is weak and fails to provide last mile connectivity. Huge investment is required in roads , railways and other means of mass transport.
Kenya has high literacy level of 85% making it a good market for telecom companies. With more development, there will be a demand of better digital connectivity which can be met by Bharatiya manufacturers only if we act fast to get first mover advantage. Other equipment like optical fibers, routers, set top boxes, cheap mobiles etc could be exported from Bharat.
Industrial activity is concentrated around the three largest urban centres – Nairobi, Mombasa and Kisumu. It is dominated by food-processing industries such as grain milling, beer production, and sugarcane crushing. Another key industry is fabrication of consumer goods, e.g. vehicles from kits. There is a vibrant and fast growing cement production industry, and also an oil refinery that processes imported crude petroleum into petroleum products, mainly for the domestic market.
The food processing industry (FPI) provides a good investment avenue for Bharatiyas as we have low cost and efficient expertise in FPI. Mega food parks or agriculture processing zones can be envisaged on a mega scale. Refineries can be set up for meeting domestic market demand as well for exporting refined oil to other neighboring African countries.
In addition, a substantial and expanding informal sector commonly referred to as Jua Kali engages in small-scale manufacturing of household goods, motor-vehicle parts, and farm implements .Here also Bharat can get involved either by directly investing in small scale industries or through joint ventures with Kenyan partners, or directly exporting to Kenya. Again, time is of the essence as China is also eyeing the same market.
Bharat can also help in meeting energy needs of Kenya. Kenya is mainly dependent on hydro-power and is looking to expand its energy sector. Scope exists in renewable energy like solar and wind power, although they require a large one-time investment but are easy to harness, operate and maintain. Investment in renewable sources of energy will also be in line with the Kenyan African 2030 vision of low carbon, climate resilient development pathway.
Kenya is a resource rich country, but fares very badly on basic health indicators. Preventable diseases like malaria, AIDS, pneumonia, diarrhea and malnutrition are the biggest burden, major child-killers, and responsible for much morbidity. Besides this, life expectancy is low while infant and maternal mortality rate is high. Kenya can be a huge market for Bharat’s traditional healthcare systems like Ayurveda and Yoga. Kenya is also naturally blessed with fertile land for medicinal plants farming. Bharat’s Ayurvedic firms can see Kenya as a new and untapped market for Ayurvedic products, and in long run can also produce Ayurvedic products in Kenya for export to other African nations.
The Kenyan Government has undertaken many initiatives, like favorable tax measures including the removal of duty on capital equipment and other raw materials, to create an investor friendly business environment. It is one of the emerging economies of East Africa, and a gateway to the entire region. Active trade and investment will bridge the gap among people and lead to better ties in others spheres as well.
– By Kriti Agrawal