Kenya is banking on Japanese expertise in the health, transport and energy sector to spur local production systems as the Asian country continues to sink more money into the economy.

Industrialisation Cabinet Secretary Betty Maina said the two countries will leverage the private sector to expand growth in the region. This comes in the backdrop of increased assistance making Kenya the largest recipient of Japan’s Development Assistance in sub-Sahara Africa.

“Africa Free Continental Trade Area (AfCFTA) is one of the successful flagship projects of the African Union’s Agenda 2063. It presents vast opportunities for mega projects, that can be undertaken between Africa and Japan,” Maina said.

The CS was speaking on the sidelines of the second Japan-Africa Public-Private Economic Forum held in Nairobi yesterday.

State Minister of Economy, Trade and Industry of Japan Hosoda Kenichi announced that Japan will focus on, among others: support for Japanese companies expanding their businesses with the aim of solving social issues including those in healthcare, finance and green in Africa.

 He said this will be done by by utilising digital technology and promoting business collaboration between Japanese companies and overseas startups/companies through J-Partnership as well as J-Bridge, initiatives newly extended to Africa.

National Treasury’s budget estimates for the financial year starting July listed Japan as the largest source of bilateral loans and grants, leapfrogging China which has been the biggest financier for nearly a decade.

Beijing is projected to lend Kenya Sh29.46 billion for the fiscal year 2022/23, a sharp cutback from Sh140.03 billion in the 2015/16 budget.

Improve connectivity

The completion of the infrastructure has the potential to drastically improve connectivity with the Northern Corridor, promoting trade, investment and new industries. Since 2016 the Asian nation has been conducting summits in Africa to identify opportunities in the fields of trade, investment, infrastructure and energy.

It is held once every three years, with the participation of people from the highest levels of the public and private sectors in both Japan and Africa. Trade relations between Africa and Asia have grown significantly in recent years with 2020 data showing that Africa’s exports to Japan were around $8.6 billion, whereas African imports from Japan were about $7.9 billion. 

Carole Kariuki, Kenya Private Sector Alliance CEO pointed out the need for Kenyan firms to adopt value addition to increase revenues for their products. “We want to see more value addition than just sending our raw products to the international market,” she added.