Information communication technology (ICT) and renewable energy have opened new frontiers for ventures that would raise trade volumes under the preferential US trade arrangement even as rules of origin cloud the future of textile exports to the market.
Officials at the US Trade and Development Agency said increased investment in ICT infrastructure and recent tariff incentives to clean energy investors have seen many Americans asking for investment opportunities in Kenya.
The US market has remained elusive to most local investors despite the 10 years of the preferential African Growth and Opportunity Act (Agoa), prompting many experts to call for partnership with American investors to help boost export capacity.
“The opportunities for investment in ICT and geothermal, together with many positive stories that are now coming out of Africa are helping American investors to learn and grow interest about Kenya,” the agency’s director Leocadia Zak said at a telephonic conference organised last week for African journalists in the run up to the next Agoa forum in Lusaka in the next two weeks.
Agoa allows Sub-Saharan African countries to export 6,500 product lines to the US duty and quota free but textile still accounts for close to 80 per cent of what Kenya exports under the facility.
Ms Zak said the agency provides technical assistance to develop ICT infrastructure in the region through its East African Broadband Connectivity Initiative.
It is also helps regional project sponsors to develop renewable energy and efficiency capacity through its African Clean Energy Solutions initiative in a move aimed at lowering cost of doing business.
Ms Zak’s sentiments also came from executives of Export-Import Bank of United States (Ex-Im Bank) and the Corporate Council of Africa.The Ex-Im Bank is the US’s official export credit agency while the council is an American not-for-profit association of more than 160 companies that encourage more US firms to do business in Africa.
Timothy McCoy, the association’s vice-president for development said African exporters often find American market very difficult to penetrate due to high cost of transport as well as different labelling and packaging requirements.
These challenges, he said, would easily be overcome through knowledge exchange and technology transfer that will result when more US companies get into partnership with local enterprises. “The perception that Africa is largely unknown and a risky destination for investment has begun to change and we expect to see more partnership with American companies,” said Mr McCoy
The comments came just days after the government released official data indicating significant growth in ICT platforms in the past year.The Economic Survey 2011 shows that mobile phone subscribers rose to 20.1 million by 2010, a 15.9 per cent growth from the 17.4 million subscribers in 2009. The number of internet users over the same period more than doubled to 7.8 million, up from 3.6 million the previous year.
It was during the same period that energy ministry introduced feed-in tariffs, to lure private investors to put their money on wind, biomass, small hydro power, geothermal and solar systems. The investment in renewable energy seeks to cushion the country against climate change while reducing overdependence on the volatile oil imports.
The data indicates that petroleum products claimed close to 50 per cent of the country’s Sh947 billion worth of exports in 2010.
“American investors prefer areas where they can see growth,” said Ms Alice Albright, the executive vice-president and chief operating officer at Ex-Im Bank, adding that the bank will work with banks that have regional presence.