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Interview with:
Mr. Owango,
The Chairman of the Chamber of Commerce
Nairobi, April 19th, 1999
Contact:
Visiting Adress: Ufanisi House, Haile Selassie Ave. Nairobi
Postal Adress: P.O. Box 47024, Nairobi, Kenya
Tel: 254 (2) 220866 / 7 and 254 (2) 334413
Fax: 254 (2) 406664
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When the Chamber of Commerce was created one of its main aims was to Africanize Commerce. How has that role changed with time?
The initial role was to help the African get into business. In that regard we were in a controlled economic environment. There were a lot of Government controls on the economy and they were able to direct certain businesses to be reserved for Africans only. That policy has worked well, and we have a few Africans who have come up the ladder and are now able to fend for themselves. But with the introduction of liberalization, the controls have been removed. Now everybody has to compete and only good serve and, quality of product count. The role of the chamber has changed to that of a lobby group. Our role now is to ensure that the private sector is not put at a disadvantage during the formulation of our country's economic and other policies.
Kenya traditionally runs a trade deficit. While imports have increase exports have stagnated. What promotional strategies has the Chamber of Commerce set in place to help change the sign of the balance?
The Chamber has been active in the promotion of exports for some time now. We are proud that whenever a foreign business person gets out of his country and comes to Kenya the first office of contact is the Chamber of Commerce. We have thus been able to build a very wide international network of partners for our members. This we have done by organizing missions to foreign countries, by inviting missions from foreign countries to Kenya, by organizing exhibitions in foreign countries, by inviting colleagues to exhibit in Kenya and by trying also to encourage joint venture partnerships with business colleagues from outside. We have indeed been quite successful in building contacts.
The Kenyan economy relies heavily on agriculture. What is the role of the Chamber of Commerce in this sector?
The Chamber of Commerce believes that agriculture is the engine of growth in our country. In all our presentations to the government we have asked them to place more emphasis on strengthening the agricultural sector. In particular we want the government to look at value addition in agriculture. For example Kenyan Tea is exported in bulk and is packaged overseas. But studies have shown that if we were to go the extra mile and do the acceptable quality and standard of packaging, we would increase the value of our products 6 times. This goes for Coffee and flowers. We are doing very well with the latter in auctions in Holland. Ideas have been floated to the effect that we should think of creating a regional centre here for flowers, but those are still just ideas. We must now think of putting them into practice.
How has the El Nino incident affected the Agricultural Sector?
Very drastically. Because of severe damage to the roads and railway lines, the cost of transporting agricultural inputs and products has gone up astronomically thus affecting our competitiveness.
Being that the role of the Chamber of Commerce has changed slightly and has moved more into the area usually covered by the Kenya Association of Manufacturers does the Chamber of Commerce work together with KAM now?
The Chamber of Commerce and the Kenya Association of Manufacturers work very closely together. In fact the two acting together with the Federation of Kenyan Employers we have established a loose Association called the Kenya Business Council. We normally meet and consult monthly. Where there are any issues we need to present to the state, we do it jointly. Between Mr. Chris Kirubi and myself, we have been able to create very harmonious working relationship for the two institutions. There is no power struggle. All our attention is focused on serving the business community.
How does the Chamber of Commerce encourage joint ventures? Are there any projects underway?
This is a fairly difficult area. However, the following is an example of what we are trying to achieve: We are trying to match-make the Kenyan and Egyptian business. Now that Egypt is a member of COMESA, they would like to enter into various partnerships with our people and negotiations are currently going on. In addition we have a lot of work to do in terms of joint ventures with America. I have personally been involved in campaigning for President Clinton's African congressmen, been to their offices, met their staff in order to make sure they pass the bill in Congress. I also met the Black Caucus, with their staff and I am quite happy with the progress. Our contracts with the USAID are also very encouraging. Together we are trying to interest American businesses into getting into projects in Kenya. Because of the passing of the bill, we are now moving very fast. In my capacity as the Vice-President of the ESABO (East African & Southern Business Organization), I have signed a memorandum of understanding with the World Trade Centre in Chicago. One of our missions is to create a core of African and American businessmen and women. We hope to star with a project of getting 21 business executives from the region to go and work in Chicago at the North Western University for about one month. A similar number of people from the Mid-West would also come and work in our region as a sort of exchange. It is going to be a three year project. In three year's time we hope to create over 100 business partners; people who will have established friendship through this exchange. It is a fact that up to recently, America has been a foreigner to business in this region, but with the opportunities created by President Clinton's Africa Growth and Opportunity Bill, the situation is bound to improve considerably. | Are you confident that progress is being made since the Africa Growth and Opportunity Bill was passed?
In fact we were already on the move with Missions and contacts before the bill was passed. I now expect the tempo to increase considerably. I, for example have entered into a joint venture with an American Company from Wisconsin and we have a World bank funded contract to remove the water hyacinth from Lake Victoria. It is a one-year contract, but this could be just a start. We are looking forward to doing a similar job for the whole of East Africa because the Water Hyacinth is a problem in the whole of Lake Victoria. My message to America is: there is a lot out here. If we, for example, could get American road contractors to come here, there is a lot of money to be made. We have over a possible 100 million dollars to be made. Currently, we only have British and Italian Companies operating in Kenya. Moreover Kenya is currently liberalizing our telecoms sector. This is opening up many opportunities for direct foreign investment. There is also a partnership in Research between KARI (Kenya Agricultural Research Institute) and Monsanto. Another example of co-operation is that between the Kenya Bureau of Standards and its American counterpart. They are working together to ensure that all the products conform with the best standards in the world.
Could you fill us in on the COMESA summit that is going to be taking place in Nairobi?
We had a very successful meeting in May 1999. Many Heads of States attended. They approved several initiatives including reduction of tariffs for infra COMESA trade. It is envisaged that by October next year all the 21 COMESA Countries will be zero tariff. As at now Egypt and Madagascar are leading. The two have reduced their tariffs by 90%. Kenya and a few others are currently at 80%. Other countries have not moved as expected because of the expected shortfall in revenue. This is understandable. I was part of the COMESA mission to Washington which met the World Bank to find ways and means in which some of these countries could be compensated, so that our move towards zero tariff is not impended. Along side the summit we had a trade exhibition on May 29th -27th 1999. This was a resounding success. A recent study carried out by the USAID shows that within COMESA there are over 600 products which are produced within COMESA but are currently being imported from third countries, e.g. Europe,China or the Far East. It is only through having exhibitions, that we can match what exists in the region to what the economies of our countries need. The exhibitions will also act as forums for business communities to get to know each other, and perhaps have an opportunity to enter into a joint ventures.
Is this the first time an exhibition took place together with a COMESA meeting?
This is the first time. The last time we had one was in 1994 in Maputo, Mozambique. But that was just an exhibition. There was no Summit. The importance of a Summit for us as the business community, is that we are able to come into contact with top government policy makers.
What is the final message to our 4.6 million American readers?
The message to all the American readers and investors, is that President Clinton's Growth and Opportunity Bill is going to avail over 650 million dollars for joint ventures and business within Sub Saharan Africa. Studies show that this is the market of tomorrow. I would therefore like to urge the American business community to move without delay. They can do that by getting in touch with us at the Chamber of Commerce., or our Regional Business Organizations. We are keen and willing to organize interactions. In fact we have requested the Mid-Western Region of the United States to host a solo exhibition of American goods next year, for our people to be able to see what America has to offer. One of the biggest areas where there are opportunities is textiles. Kenya has not been able to meet the textile quota granted by the American Government earlier. With the passage of The bill, there will be a quota. And because of the cheap labour that we have here, there will be many opportunities for "Stitch and Sew" projects involving American manufacturers and our people. In this way we shall have the American technology and employment for our people including women. We already have one American Company in our export zone which is employing 1000 people. With the passage of The Bill there is no reason why we cannot have 100 times that figure. American investors can be assured that they will be able to get their money in three years. A good example is that of a flower farm which belongs to an American consortium near Thika Town. The Americans came here on holiday. The farm was on sale and they bought it for $5 million. It is not yet three years but they have more or less paid off what they invested in the farm. |
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© World INvestment NEws, 1999.
This is the electronic edition of the special country report on Kenya published in Forbes Global Magazine.
November 29th 1999 Issue.
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