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Reforms record under scrutiny at 2009 AGOA Forum

Published date:
Tuesday, 04 August 2009

The ground that Kenya has covered in implementing political and economic reforms comes under scrutiny this week as 40 African countries converge on Nairobi to compete for the attention of American investors.

The American investors who started streaming into the country yesterday for the eighth African Growth and Opportunity Act (Agoa) forum are expected to place high premium on the individual country’s image abroad and the key reforms being pursued to limit risks on investments in the region.

Strict observance of the rule of law is one of the Agoa eligibility criteria but the Kenyan government has failed to establish a special tribunal to try the post-election violence suspects.

Kenya’s image is important in the Agoa negotiation for while the country is now used to negotiating trade deals under the East African Community bloc, Agoa provision did not envisage the emergence of economic groups in Africa.

EAC secretary- general Juma Mwapachu who is a participant, says Agoa deal remains bilateral in nature and has no room for a collective bargaining.

In its latest competitiveness report — the benchmark used by international investors to judge business destinations —the World Bank ranks Kenya in the 82nd position, far below many other countries on the continent that are eligible for the Agoa.

“To reap maximum benefit from this forum, Kenya needs to demonstrate that it has taken steps to fix her international image, reduced official red tape, improved global competitiveness and implemented real reforms to forestall the kind of violence witnessed in the country last year,” Ms Phyllis Shearer Jones, the president and CEO of Elan international and former US Assistant trade representative told journalists in a digital video conference arranged by the US embassy in Nairobi a few days ago.

Ms Jones said the violence that erupted after 2007’s bungled election, poor enforcement of intellectual property rights law and the country’s proximity to the lawless Somalia top the list of concerns that American investors keep raising about Kenya.

The shape of an intricate mix between politics and trade will play out when US investors and deal hunters arrive in Nairobi, accompanied by top government officials, among them Secretary of State Hillary Clinton, Agriculture secretary Tom Vilsack and Trade representative Ron Kirk.

According to Mr George Aldridge, US Economics Officer at the Nairobi embassy, most of the American investors attending the forum will not only sign more deals with African suppliers but will also be scouting for investment opportunities that could open more windows for higher foreign direct investments in the continent.

This means that if the pace at which Kenya is implementing her reforms fails to measure up among her peers, local traders will be the immediate casualty, losing out on the race to clinch more trade deals with the world’s largest economy to their counterparts from any of the remaining 39 other eligible African countries.

In a statement issued to the Business Daily by the US embassy, Mr Kirk said the Nairobi forum will open new dialogue — not only between the US and the African governments but also with the representatives of the private sector and civil society on ways of expanding and deepening economic and trade partnership with the continent.

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