SUMMARY OF THE PM's WORKING TRIP ABROAD
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The visit by the Rt. Hon. Raila Odinga, Prime Minister of the Republic of Kenya, to the US, April 10th – April 17th, 2011.






Editorial teams in virtually all of Kenya’s mainstream media have given this significant visit by the Prime Minister ONLY little snippet coverage as a minor footnote.



The Prime Minister has been to a very important Investment Conference in New York, met the US Vice President at the White House, addressed a leading Global Policy Center (CSIS Washington DC), visited two State Houses (Florida and Massachusetts), a couple of leading American Universities, and went across public halls meeting Kenyans in the USA with only limited coverage in Kenyan media.



Compared with other ill-fated and wasteful trips such as the misguided ‘shuttle diplomacy’ by VP Kalonzo Musyoka, I have closely followed the Prime Minister’s current trip and found it more than worth the taxpayer money spent.



Coming along with Prof. Hiroyuki Hino, the Economic Advisor to the Prime Minister (& former IMF Director), Raila Odinga's trip focused on attracting American institutional investors in key sectors where we badly need capital-intensive investments such as; geothermal energy generation (to offset our energy shortfall and make manufacturing (job-creation) cheaper), rapid transit rail systems for Nairobi (to decongest traffic), airport and port developments/upgrades (to open up remote places and fix crumbling structures ), affordable housing projects such as America’s Inner City high-rise housing projects (to tackle our growing Slum / affordable housing deficit problem), ICT investments (create jobs for our educated unemployed youth), and invite collaboration in establishing a world-class financial market (post demutualization of Nairobi Stock Exchange).



Prof. Hiroyuki Hino



It was done in the most innovative one-stop-shop format – via a well publicized conference in New York, where the Prime Minister was the Key-note Speaker, and Kenya the co-host. In a nutshell, Big Corporations with interest showed up and concrete liaisons were established. Watch out for news in many sectors in the coming months.



There were also MOUs and collaborative pacts to be signed on behalf of Kenyan Universities with top American Universities like M.I.T & Harvard (for research and student exchanges). Another MOU between Florida Agricultural and Mechanical University (F.A.M.U) and Kisumu’s R.I.A.T ( in engineering and health sciences cooperation/exchanges) was already penned by Kenya’s Higher Education PS Prof. Kiamba, and F.A.M.U’s President.



The Prime Minister then went ahead to pitch for support of Kenya’s environmental conservation (esp. restoring main water tower - Mau Forest and declining Lakes like Naivasha) following-up on an earlier pledge made by former US President Bill Clinton.



The PM then engaged in high-level lobbying for a direct flight between Kenya and the US (to allow Kenyan traders of time-sensitive goods a chance in the US market – which would create jobs at home) then proceeded to meet with the US Vice President Joe Biden on crucial matters such as support towards ending Kenya’s burdening by Somali refugee influx, and implementation of the new constitution. The PM also discussed emerging trade opportunities (esp. if the direct flight dream materializes) with the Florida Republican Governor, Rick Scott.





As usual the PM also met (& will still meet) with Kenyans in the Diaspora to record their concerns (some which I’ll highlight), including gracing a much awaited cultural event in recognition of the success of Kenyan Boston Marathon runners. This Boston event was an invitation by an organization of Kenyan community in Boston and the runners themselves, who (on their own) decided to invite, from Kenya, the Prime Minister, while from the US, both the Massachusetts Governor and Boston Mayor.



Overall, this trip by the Prime Minister, currently on its last stages, is turning out to be quite a resounding success.




HIGHLIGHTS


The New York Institutional Investor Conference (plus formal and informal input from the Corporate luncheon)



This was principally an official working tour in line with the Prime Minister’s (& Kenya’s) vision to boost global investors’ interest on business opportunities at home. The Kenya government came up with the innovative idea to co-host the “Africa Investment Conference” in New York City, to be headlined by Prime Minister, Raila Odinga. It was deliberately meant to attract investments not just in Kenya, but Africa as a whole – with an eye on expanding interest.



The government was targeting about 100 corporate investors interested in various sectors of the Kenyan economy whom they proactively invited. The conference turned out into a big success – better than anticipated – with more than 400 corporations (including one of America’s biggest multinationals, General Electric {GE}), and several others with serious interest showed up.



On Kenya - the attendants were given exceptional presentations by the PM himself, (Keynote speaker) and the delegation accompanying him – see list at the bottom) offering detailed information about the business climate in Kenya, regulations, economic policies, and areas of opportunities.



The gist


The Key-note Speaker, the Prime Minister, told the investors about the broad vision for Africa - also highlighting his vision for Kenya - on diversification of the Kenyan economy into multiple sustainable sectors. He gave them information on the government’s ‘now-attractive’ regulatory and economic policies (including tax, legal, monetary and fiscal). The CBK Governor Ndung’u backed it up with a detailed follow-up presentation on fiscal and monetary policy. Odinga referenced a UN Conference report on Trade & Development, which cited that Africa generates the greatest investment return: 12% compared to 10% in Asia and 8% in Latin America.



The PM listed investment opportunity areas in infrastructure public-private partnerships; project (and leverage financing) opportunities in oil and gas, telecoms, transportation, tourism, health services, metals/mining, agribusiness, renewable energy, and power; and development of capital markets and banking.



He spoke of Africa's need to trade more with the West and stop reliance on aid. He alluded to Kenya’s own need to expand its market in the US – with a good start being the launching of a direct flight between Kenya and the US – giving time-sensitive goods like horticulture exports an opportunity in the US. Even Americans were called in to invest in horticulture in Kenya. Can you imagine Kenya exporting flowers beyond Europe, into the US? That would be an automatic job-creating move right there and an opportunity for investors in Green House farms (& green house manufacturers). {The PM revisited this direct flight matter with the US bureaucrats he later met}.



The PM decried that Africa was rich in raw materials yet lagged behind in manufacturing. In Kenya, he noted that manufacturing sector (a big job creator) accounted only 9.5% of the economy and called upon fellow industrial investors (like himself) to invest in this job-creating sector. Of course he mentioned about the main challenges that have held investors back and how the government was meeting them – energy and transportation.



He confidently said that Kenya was expecting to produce 2,000 MW of power (twice the current level) in just 5 years – thanks to increased government investments in geo-thermal energy production. He saw that energy shortfall, as yet another investment opportunity for Americans. He called upon corporations like GE to come to Kenya and invest in geothermal production in the Rift Valley – which had a potential for up to 900 wells. In attendance and listening with keen interest, was of course, Jay Ireland, President & Chief Executive Officer, GE Africa, alongside his American based Corporate bosses.




To boost the point, the Kenyan technocrats had prepared a short presentation Titled: “A ‘green’ geothermal plan in Kenya”, showcasing Kenya’s geothermal progress and potential. It later highlighted requests for proposals for joint partnerships in building geothermal power plants, listed incentives (including the government’s underwriting of drilling risks), and even gave estimated capital costs (for drilling, building power plant, and setting up transmission grids) and expected revenues based on already existing plants. The PM also met with corporations engaged in nuclear production, and may still meet more in one of the world's most advanced nations in nuclear technology - France - where he heads next. I am positive some proposals will likely spring up.



Later at the luncheon, the Prime Minister urged American investors to come and invest in Infrastructure in Kenya. Signaling that this will remain Kenya’s priority (& job creator) in a long time, he called on the big corporations to see the glaring opportunities in Roads, Rail, Airports, and Ports construction that Kenya offered with big incentives. He called on GE and others to invest in Rapid Transit systems in Nairobi and other Kenyan cities (like commuter transit rails) which had very promising returns.



He also asked American ICT investors not already in Kenya that they risked losing out because big plans were underway – underground cables already spreading across Kenya and a Technology City being planned. He has always maintained that educated Kenyans compete amongst the best in the world – thus technology skills will continue advancing in Kenya. {The PM intends to later visit (alongside Higher Education PS Prof. Kiamba) and meet with the Presidents of world renown Universities, M.I.T and Harvard, to enhance collaboration in higher education with Kenyan top Universities.




He has also today witnessed the signing of an MOU of technology and research exchange/collaboration between Florida’s Agricultural and Mechanical University and Kenya’s Higher Education PS Prof. Kiamba on behalf of the Ramogi Institute of Advanced Technology (R.I.A.T.) in Kisumu. This agreement would see the development of a process for implementing engineering and health sciences training systems at R.I.A.T. and initiate personnel and student exchanges.




The agreement “would also contribute toward boosting human resource capacity and focus on selected areas of interest including curricula development and training in engineering, pharmacy, nursing and allied health sciences, environmental science; environmental research collaboration; joint medicinal research; joint grant writing; staff and student exchanges; and funding for facilities development”.




The PM sees the ICT (& other technologies – agricultural, mechanical, biomedical) as still an untapped-area with exponential potential for employing our skilled youth because of (a) limited (stiff) competition in the region and (b) Kenya’s superior education preparation. The PM's speech which encompassed Africa as well, noted that 60% of Africans owned cell phones. Imagine what else can be done with cell phones besides calling, sms, and M-PESA-like transactions.



In a related presentation on the subject, I glimpsed at Kenya’s master-plan (under the Vision 30 framework), to build the Konza Technology City near Machakos. The PM noted that World Bank had already commissioned International Consultants from London to master-plan it and produce a development proposal. It is his dream that this project is completed to give Kenya some tangible and concrete technological edge.



The PM also outlined Kenya’s progress in building a World-Class Financial Market. It was noticeable that a lot of interest was shown by the Americans like Colin Coleman, Managing Director, Goldman Sachs on this subject. I will not give my own opinion about these Goldman Sachs fellows for now. On a side-note, I’ve noticed that Equity Bank (K) CEO James Mwangi never misses in the Prime Minister’s trips to the US. And if you keep a close eye, he is always a step away from the PM during luncheons and cocktails, always getting a handshake (& swift contact exchange) with those the PM hobnobs with. What an intelligent and savvy entrepreneur?



Investors in Urban development listened to the PM’s highlighting of opportunities in building affordable housing (modern High-Rise buildings) to offset rural-to-urban migration. In the US, the government solved this problem ages ago by constructing High Rise lowincome housing for poor people in all cities. I strongly suspect this is one area where the PM’s vision is to build a legacy of putting up affordable PUBLIC housing for Kenyan cities. Those ready to shout communism and socialism should take a hard look at the US itself, then most of Europe and China’s models to provide housing to an escalating migrant urban population.



There is no way the government cannot invest in public housing projects for its people if we are to even talk about well-planned cities. Private Sector will have to work with the Housing Department (Ministry), Cities, and Municipalities to build affordable housing for Kenyans. If the colonial government could do it, why not the government of the day! Otherwise we shall have ceded this responsibility to Slumlords who will build cheap shacks everywhere, ready to exploit migrant labourers while leaving us with an eyesore. Millions more will migrate to cities searching for opportunities. Where will they live? The government must be always awake to this question and I’m glad the PM is on top of his game on this matter that affects his own constituency so badly.





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PART II


Then came the big question whispered to the PM by all serious investors. I was told that there has lately been significantly increased interest among US institutional investors in Kenya, except they were worried about prospects of stability. After lessons from the global financial meltdown starting in September 2008, sovereign funds and venture capitalists are willing to enter Africa via Kenya but potential instability holds them back.



Kenya’s ugly politics which resulted in 2007 PEV and still rearing its ugly side (ethnic hate-rallies) amidst impending trials of the Ocampo-6, is a big turn off to interested investors - who see more money and market in Africa, (especially Kenya) YET are afraid of impending instability. The PM deftly allayed these fears at the podium.



While the PM didn’t acknowledge undercurrents of trouble in implementing the constitution at the business forum, he reassured potential investors that Kenya’s challenges will be surmounted.



The unspoken fact though, is that the PM and these investors all know that the best indicator that stability can be guaranteed is Judicial Reforms, Police Reforms and Electoral Reforms – done transparently, in an inclusive manner (as stipulated in the new constitution {both in letters and spirit}), without malice or under-the-table games being played by the Ocampo-6!



That is what shall boost foreign confidence that there might be stability in Kenya post-2012. Can you imagine another contested election in 2012 when there is no universal confidence in the Electoral Commission, the Judiciary and the Police? That’s recipe for another instability and violence ala 2007/8.



I was glad though that the PM cleverly downplayed these concerns – choosing to address governance bottlenecks at a different forum.



Another concern of the American investors in consumer products was counterfeit by Chinese competitors. They want to seriously sell quality products that can’t be compared to the cheap Chinese counterfeits flooding our market. But the Americans are hesitant to pour in more capital until they see corruption at Kenya Bureau of Standards and the Customs – which allow the cheap counterfeits addressed.



Look at an American company like Eveready Batteries, they are being run out of business in Kenya because of cheap Chinese (counterfeit) battery imports which can’t last two days. Kenyans previously employed at Eveready are losing fairly decent Jobs. The Chinese are not creating any local jobs – just corruptly dumping cheap, low quality products in the market. The PM expressed confidence that both KBS and Customs are themselves undergoing positive reforms.



But on the bigger points related to counterfeits - corruption and bad governance – alongside potential instability, and electoral fraud – the PM chose to address them elsewhere, not at this forum. The PM was clever in separating these issues (at different choice venues) so as not to cause anxiety amongst the potential investors- dwelling on business matters in New York and the business forum (luncheon) in DC, then tackling the reality of a Democracy back-slide at a different forum in the CSIS.



CSIS Forum





The “Statesman Forum” at the Center for Strategic and International Studies (CSIS), Washington DC, is the place the Prime Minister specifically addressed Democracy and Good Governance, right in front of my eyes. He openly addressed the fact that Democracy is sliding back in Africa - especially regarding blatant refusal by incumbents to hand over power after electoral defeats (and brazen election rigging).



This is where the foreign investors (and their governments) also have a stake so long as they have invested in Africa. It follows that America cannot turn a blind eye to the back-sliding of Democracy in the continent, because the former would trigger instability – threatening all their investments. The CSIS video is on a separate thread.



The only observations I’ll add to it are:



1) His drawing of US attention to the “democracy deadlock” in Africa via the new pattern of failing elections and power-sharing is a direct call on the need for tweaking US foreign policy towards Africa. He was calling for US to start paying more attention to elections (democracy) in Africa, rather than focus on stability alone, because an army of youthful, restless and educated population is emerging. They know a thing or two about flawed elections and they know their rights regarding freedom to protest such fraud.



2) CSIS’s Joel Barkan asked the trickiest question pointing a finger at the contradictory US Foreign Policy towards Uganda’s Museveni and Ethiopia’s Meles, The PM veered around it like plague, ending up discussing events in Egypt and Middle East.



3) The PM’s cognitive astuteness and appreciation of Africa’s history gives him a bird’s-eye vantage of diagnosing the problems bedeviling Kenya’s governance. I have confidence he will reform the most difficult elements of bad governance (corruption, ineptitude, tribalism etc) esp in – Judiciary, Land, Police and such…




OTHER HIGHLIGHTS

US Corporate Council on Africa Luncheon in honour of the Prime Minister


US Corporate executives, led by Stephen Hayes, director of the Washington-based Corporate Council on Africa, feted and chit-chatted with the Prime Minister in Washington DC during a two hour luncheon after the PM’s CSIS presentation.



It is at this forum that the PM and invited guests started getting the first positive feedback on the earlier held New York Conference. Corporate executives keen to invest in viable opportunities in Kenya showed serious interest and made important contact follow-ups. The success of the conference is already showing.




Protecting Kenya’s Environment


During a meeting with Prime Minister Raila Odinga at the Clinton Foundation offices in New York, the former President Bill Clinton made the first tangible offer. He promised to help set up an operation (with start-up funds upfront) that would distribute stoves that use cheap fuels other than charcoal in rural Kenyan villages where wood remains the main source of fuel. This would of course reduce pressure on forests and protect water towers and water bodies.




He also promised to provide start-up funds (through his foundation) to convert garbage into cheap biogas for domestic use, instead of charcoal.




Meeting Kenyans in the Diaspora


Of course the PM is thanking Kenyans in the Diaspora for their role in passage of the draft constitution besides calling upon them (those not yet started) to invest in Kenya. The PM is engaging with Kenyans exceptionally well. He’s traveling with an entourage that has both PNU officials (like Kimunya) and ODM (like Margerer) plus a host of technocrats. The Ambassador Elkana Odembo is also superb, liaising with Kenyans across many US cities (New York, Washington DC, Tallahassee) to facilitate these meets.




Emerging Diaspora issues under the dual citizenship dispensation seem to be things like acquisition of IDs (some long lost them), facilitating voting from abroad, and the issue of separate representation. Save for the ID issue, I still see a long road ahead of such ambitions (my own opinion).



A confident PM is downplaying the recent rise in political temperatures over the ICC Pre-Trials while stating that Kenyans are aware of the challenges and opportunities they have. There has been a conscious attempt to avoid politics during the trip. This is a working trip.



Media and foreign envoys


Increased interest by the International media, such as Ivorian and French media of course! Envoys such as the new Ivorian Ambassador to the US have paid him a visit.



To come


The Boston Marathon awards event (to be graced by Massachusetts Governor Duval Patrick and Boston Mayor Menino) and the M.I.T & Harvard trips and more




Accompanying the PM (both in government and private sector) - this is not an official list, so it may have some minor errors (ommissions or commissions)



1 Hon. Amos Kimunya, EGH, MP Minister for Transport

2 Hon. Langat Magerer Assistant Minister for Energy
3 Dr. Mohamed Isahakia, CBS Permanent Secretary, Office of the Prime Minister
4 Mr. Joseph K. Kinyua Permanent Secretary, Office of the Deputy Prime Minister and Ministry of Finance
5 Dr. (Eng) Cyrus Njiru, CBS Permanent Secretary, Ministry of Transport
6 Dr. Bitange Ndemo, CBS Permanent Secretary, Ministry of Information and Communication
7 Eng. Michael S.M. Kamau CBS, HSC Permanent Secretary, Ministry of Roads
8 Dr. Edward Sambili Permanent Secretary, Ministry of national planning and vision 2030
9 Amb. Patrick Wamoto Ag. Permanent Secretary
Ministry of Foreign Affairs
10 Samuel Mwamburi Mwale, CBS Principal Administrative Secretary/Assistant Secretary to the Cabinet
11 Karoli Omondi Chief of Staff
Prime Ministers Office
12 Esther Koimett Investment Secretary/Treasury
13 Prof. Njuguna Ndung’u Governor, Central Bank of Kenya
14 Mr. Mugo Kibati Director General, Vision 2030 Delivery Secretariat
15 Dr. Geoffrey Mwau Economic Secretary/Treasury
16 Mr. Kennedy Waituika Kihara, EBS Secretary, Liaison, Parliament and Commissions, Cabinet Office
17 Paul Gondi Chairman, Geothermal Development Corporation
18 Mrs. Mary Kimonye Chief Executive Officer
Brand Kenya Board
19 Ms. Susan Kikwai Chief Executive Officer, Kenya Investment Authority
20 Mr. Edward Njoroge Chief Executive Officer, KENGEN
21 Dr. Silas Simiyu Chief Executive Officer, Geothermal Development Company
22 Eng. Stephen Gichuki Chief Executive Officer, Kenya Airports Authority
23 Eng. Nduva Muli Chief Executive Officer, Kenya Railways Corporation
24 Mr. Paul Kukubo Chief Executive Officer, ICT Board
25 Amb. Elkana Odembo Ambassador
Kenyan Embassy, Washington DC
26 Amb. Kamau Macharia Ambassador
Kenyan Mission to the NY
27 Prof. Hiroyuki Hino Economic Advisor to the Prime Minister
28 Dr. James Mwangi Managing Director, Equity Bank
29 Bob Collymore Chief Executive Officer, Safaricom
30 Eng. Judah Abekah Director, Macro & Enablers
Vision 2030 Delivery secretariat
31 Mr. Emmanuel Nzai
Executive Officer
Vision 2030 Delivery Secretariat
32 Eng. S. Okech Omer General Manager, Kenya National Highways Authority
33 Kennedy Manyala General Manager, Investment Promotion
Kenya Investment Authority
34 Jacquie Muhati-Lukiri International Brand Manager
Brand Kenya
35 Mr. David Muthike KENGEN
36 Eng. Solomon Ouna Project Manager (SGR&CS) Kenya Railways Corporation
37 Ms. Wangui Bernadette Mwaniki Corporate Affairs Manager
Kenya Railways Corporation
38 Mwende Mwinzi CLS
39 Peter (CLS) CLS
40 Mugo Kibati, Director General, Vision 2030 Delivery Secretariat, Republic of Kenya
41 Titus Naikuni, Chief Executive Officer, Kenya Airways
42 John Ngumi, Director of Investment Banking Coverage, Corporate & Investment Banking Division, Standard Bank Africa, Stanbic
43 Kwame Parker, Director & Head, Debt Solutions & Infrastructure Finance, East Africa, Stanbic Bank
44 Michael Joseph, Chairman, Kenya Tourism Board, Former Chief Executive Officer, Safaricom, Ltd.
45 Jonathan Jackson, Managing Director, Lordship Africa
46 Gad J. Cohen, Partner, eleQtra Ltd, Manager of InfraCo Africa
47 Honorable Prof. Njuguna Ndung’u, Governor and Chairman, Central Bank of Kenya