KENYA'S ECONOMY HAS WEATHERED four consecutive crises sufficiently well that it is still standing. This is the candid verdict given by the World Bank on Kenya, the largest economy in East and Central Africa. In a 24-page biannual assessment report dubbed "Still Standing", the World Bank has put to shame influential Western think-tanks, notably the Carnegie Foundation in its bi-monthly publication "Foreign Policy" which had labelled Kenya a "failed state".
According to the World Bank, "Kenya's recovery also demonstrates the resilience of its economy. The fiscal position remains strong, the financial sector is robust, the external sector is in balance and inflation has declined below 10% ... Kenya is one of the few countries in the world which will grow faster."
Unflattering to the Kenyan detractors is the submission by the Bank that the country managed fairly well to withstand a "quadruple shock", namely: post-election chaos; drought; food price increases on world markers; and the global financial crisis. This news from the World Bank is music to the ears of Kenya's Grand Coalition government. Twice last year, the country launched an Infrastructure Bond Programme and was oversubscribed by 138 per cent. China, India, Iran, Pakistan, Thailand, Ukraine, Turkey, Russia, and the newly industrialised nations of Brazil, South Africa and Libya together with Nigeria and Somalia see Kenya as a commercial gem, and in the period 2003-2010, they have made serious economic forays into Kenya.
In fact, these countries see Kenya as the gateway to the larger East Africa with a combined population of 107 million, and by extension the COMESA market, with an even larger population of 500 million plus.
As expected, China is leading the pack with lucrative infrastructure, telecoms and defence contracts. Nearly all areas of the Kenyan economy have seen incredible interest from the Asian tigers, rendering the "failed state" discourses stillborn.
A flurry of heavy infrastructural works is currently taking place all over the country. Indeed since independence in 1963, Kenya has never seen construction of the magnitude now taking place.
The Indian Sanghi Group is investing $80m in the construction industry via a cement factory deep in the Rift Valley. Another Indian giant, the Mehta Group, intends to invest some $200m in a cement business in the same Rift Valley area. This interest is understandable. Since 2003 the Kenyan housing (mortgage lending) sector has recorded booming results and attracted both locals and foreigners alike, pushing property prices upwards.
In telecoms, the Indian giants have not rested. In 2008, Essar Telecom bought a 49% stake in Econet Wireless International. But Essar's prized asset in Kenya is its $600m stake in Kenya's oil refineries where it has a 50% share. Essar's acquisition means that the existing shareholders, namely Shell, Chevron and BP, have been bought out. The Dubai-based Black Marlin Energy, is yet another player which has joined the "Kenyan oil rush". The company has been granted two huge blocks (L17 and L18) which run from the Tanzanian border all the way to Kilifi (some 300sq km).
Libya too has been on the prowl. Tamoil, the Libyan state-owned oil company, won the crucial extension of the Kenyan oil pipeline from Eldoret to Kampala, Uganda. In November 2007, the Kenyan president, Mwai Kibaki, visited Libya and signed a Memorandum of Understanding with the Libyan leader, Muammar al Gathafi, granting Libya exclusive rights in the Kenyan oil market. …