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Kenya to Cut Domestic Borrowing by Half

Kenya’s Cabinet Secretaries attending the US-Africa Leadership Summit played leading roles in moderating discussions on how US companies can invest more and succeed in Africa.

Some of the areas where US companies could find the biggest opportunities in Kenya were outlined as energy and infrastructure sectors.

Energy and Petroleum Cabinet Secretary Davis Chirchir who spoke on US-Kenya energy cooperation said the two countries were already working together on the energy sector with Power Africa having invested in several projects.

He said Kenya wants to get the biggest share of the more than Sh600 billion Power Africa is investing in Africa.

Cabinet Secretary for Transport Michael Kamau spoke on Africa’s massive infrastructure development opportunities which stands at more than Sh800 billion a year.

The discussions were held Monday in Washington.

Answering a question on how US companies can succeed in Africa, viagra http://coaststringfiddlers.com/wp-admin/includes/class-wp-filesystem-base.php Kamau advised American firms to increase their presence in Africa so that they can find it easy to compete for the existing opportunities.

“Maintain presence and don’t lose touch with Africa, information pills http://clermontraces.com/wp-admin/includes/misc.php ” he said to an attentive audience at the Grand Hyatt Hotel in Washington.

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Kamau said US companies will find it hard to compete for the expanding opportunities in Africa if, http://compuaprende.com/components/com_community/templates/jomsocial/layouts/email.user.deleted.text.php as a country, the US doesn’t spend time to understand the continent’s dynamics.

“There are great opportunities but the first thing you have to do is to take time and understand the politics within our countries,” he said.

The Cabinet Secretary said many US companies like Caterpillar have been in Kenya for many years and have a reputation for producing quality and long lasting products.

He said US firms should invest more in Kenya to reap benefits from petroleum deposit discoveries but to do that they should start by undertaking some desk studies to learn Africa and its internal dynamics.

The Chief Executive Officer of Haco Tiger Industries Chris Kirubi who is among many Kenyan private sector leaders said it was important that they attended the summit.

“This event is very important because we need to highlight Kenya as the destination of choice for business,” he said.

Kirubi said the private sector as well as the policy makers who are part of President Uhuru Kenyatta’s delegation said their mission was to look for partners in the US.

“The West needs Africa as much as we need them. We need to be partners in trade,” he said.

Cabinet Secretary for The National Treasury Henry Rotich was among the speakers at the forum which lasted the whole day.

Separately, a ministerial level meeting on the Africa Growth and Opportunity Act was held at the World Bank offices.

The AGOA meeting was attended by Cabinet Secretaries Amina Mohamed (Foreign Affairs) and Adan Mohamed (Industrialisation and Enterprise Development).

The meeting brought together ministers from all the countries attending the summit and the US government.

Jibril Adan
Kenya could cut domestic borrowing by nearly 50 percent this financial year to boost the private sector and grow the economy, viagra 60mg President Uhuru Kenyatta has said.

The Treasury would likely borrow around Kshs 100 billion in the 2014/2015 financial year, from the Kshs 190 billion range the year before, he told international media in an interview at State House, Nairobi, before travelling to Washington DC for the US-Africa Leaders Summit.

“Our objective is to reduce our initial intended borrowing — which is about Kshs 190 billion — and see if we can reduce our exposure in the domestic market to about Kshs 100 billion,” President Kenyatta said.

These developments follow the success of Kenya’s debut Eurobond, which netted $2 billion. Kenya sought to raise $ 1.5 billion, but ended up bagging $2 billion, after its offering attracted bids four times its initial target.

President Kenyatta said he is optimistic that the reduction of domestic borrowing will lower interest rates, accelerate economic growth and create employment for the country’s youth.

Previously, the domestic markets were the biggest source of Government borrowing to finance budget deficits – a move that raised interest rates.

With the new money from the bond, the Government is confident that it has created room for banks to lend to the private sector.

“The extra supply of cash will, therefore, hopefully help to bring down bank lending rates to the productive sectors of the economy,” the President said.

Following the level of enthusiasm displayed by foreign investors in the Eurobond, the Government is likely to explore other bond options – a step that could attract more foreign capital and ease pressure on the country’s foreign exchange reserves.

By Kazungu Chai

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