Kenya Lawmaker Criticizes Chinese Businesses for Driving Out Local Companies | 2018-11-11 21:59:43 (Visits: 526 Times) |  | | photo1,AKenya Commercial Bank (KCB) worker counts Kenya shilling notes on a money counting machine as she serves a client inside in the banking hall at the Kencom branch in Nairobi on July 10, 2018. (Thomas Mukoya/Reuters)
BY REUTERS
November 8, 2018 Updated: November 8, 2018
NAIROBI, Kenya—A lawmaker from Kenya’s ruling party has proposed limiting foreign involvement in public contracts after what he said was an outcry about an influx of Chinese businesses driving out local companies.
China has become Kenya’s biggest trading partner, accounting for 17 percent of the East African nation’s annual trade by value, or more than $4 billion, heavily tilted in China’s favor. That imbalance, together with increasing borrowing from China, which is estimated at 21 percent of Kenya’s total public debt of 2.51 trillion shillings ($24.67 billion), has begun to ruffle feathers among Kenyans.
“The hue and cry has been brought about by what I call the Chinese invasion,” Rigathi Gachagua, a member of parliament from central Kenya, told Reuters by phone.
A recent wave of Chinese investments in real estate, retail and road construction sectors has further added to the unease.
Gachagua proposes amendments to the Public Procurement and Asset Disposal Act, 2015, to prevent foreigners from bidding for any contract valued at up to one billion shillings ($9.83 million). He said the proposal is going through the legislative process; he aims to bring it to parliament for debate in early 2019. The proposal has already garnered widespread support in the ruling Jubilee party and other parties, he said.
Spokespeople for Jubilee and Kenya’s trade ministry didn’t immediately return several calls and emails requesting comment.
The government in late October issued a notice to ban tilapia fish imports from next year, a move widely interpreted as targeting China, a major source of tilapia imports to Kenya.
China’s embassy in Nairobi declined to comment on Gachagua’s initiative, but said it hoped the issue of fish imports would be resolved amicably, for the sake of the broader ties between the two nations.
“As a strategic partner of Kenya, China will not be engaged in a trade war with Kenya, or even associate the issue of fish imports with other cooperative projects,” the embassy said in a statement.
As with other African nations, Kenya has turned to China over the past few years for funds, technology, and equipment to develop its infrastructure, including its biggest project since independence, a $3.2 billion railway linking Mombasa to Nairobi, which was opened last year.
The growing reliance on Chinese finances has caused anger among many Kenyans, with critics saying that it places an unbearable debt burden on future generations. Many Kenyans consider China the biggest threat to the country’s economic development, according to an article by Daily Nation, citing a survey conducted between July 25 and Aug. 2 by market researcher Ipsos Synovate.
Among those polled, 26 percent see China as a threat to Kenya’s development, while 38 percent say the relationship between Kenya and China will lead to job losses. Another 25 percent say that the Kenyan economy will be hurt by imports of cheap Chinese goods, while 8 percent believe that China’s influence will foster corruption in Kenya.
Corruption is one of the concerns voiced in a report presented at a U.S. congressional subcommittee hearing on Africa and global human rights on March 7. The report indicates that some contracts signed between China and top officials in the Kenyan government are shady, greased with bribes and other antecedents, such as all-expenses-paid shopping trips to China and scholarships given to Kenyan elite.
“China plays a big part in corrupting leaders to gain business advantages through corruption within Africa, especially in Kenya,” the paper stated.
Gachagua said China is using its position as a lender to give its firms an unfair advantage over their local counterparts, when it comes to competing for contracts.
“They have taken all the businesses and they are also buying all the goods from China,” he said.
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