Kenya

Country profile

Geography

Kenya is located in East Africa. The equator crosses its middle, and the Great Rift Valley runs through Kenya from north to south. It is bordered by Somalia to the east, Tanzania to the south, Uganda to the west and Ethiopia and South Sudan to the north, and the Indian Ocean is to its southeast. Its coastline has a length of 536 kilometers. There arc many plateaus within the country, of which the average altitude is 1,500 meters. Kenya covers 582,646 square kilometers.

Kenya’s capital is Nairobi, where the time zone is GMT+3, five hours later than that in Beijing. There are no Daylight Saving Time rules for this time zone.

After the general election in March 2013, Kenya abolished the provincial administration and was divided into 47 counties for governance. The capital, Nairobi, is the political, economic, cultural, industrial and transportation center of the country. It covers an area of 648 square kilometers and has an altitude of 1,680 meters. Its population is about 3.5 million.

Other major economic centers include Mombasa, Kisumu and Nakuru. Mombasa is the second largest city in Kenya and the largest port in East Africa. Kisumu is Kenya’s third largest city and the economic and transportation center in the west of the country, and it has ports on Lake Victoria. Nakuru is the industrial and agricultural center in central Kenya. Eldoret, developed in agriculture and animal husbandry, is Kenya’s “granary.”

Natural resources

Kenya is an African country famous for tourism. The beautiful natural scenery, the rich national customs and the unique landforms, as well as the innumerable exotic birds and animals, attract tourists from all over the world. Located in the middle of the country. Mount Kenya, the second highest mountain in Africa, is a world-famous equatorial snow mountain very close to the equator. The mountain, after which the country is named, is magnificent, with a strikingly beautiful landscape.

There arc more than 40 tribes throughout the country, all brimming with colorful traditional culture. The Great Rift Valley, known as the “Great Scar of the Earth,” has a very steep rock face, as if cut by an axe. It runs from north to south across Kenya and crosses the equator. It is indeed a great geographical spectacle. The dozens of national-level natural safari parks and natural reserves are a haven for wildlife and more than 1,000 species of birds. Kenya is one of the world’s most popular tourist sites for wildlife appreciation.

Kenya’s mineral deposits are mainly soda ash, salt, fluorite, limestone, barite, gold, silver, copper, aluminum, zinc, niobium and thorium. In recent years, large-scale sites of gold, coal, rare earth and titanium resources have been proven in western and eastern Kenya. Multinational companies such as those in the United Kingdom, Canada and Australia have invested heavily in Kenya’s mining sector. The titanium mine of Australia’s mining company Base Resources in Kwale County has been officially brought online and the resources will be exported to China. In 2012, the UK company Tullow Oil discovered oil resources in the South Lokichar basin in Turkana County in northwest Kenya, with a preliminary proven oil reserve of 750 million barrels. British Gas has discovered both oil and gas resources in the Lamu offshore block.

Kenya has a forest area of 87,000 square kilometers, accounting for 15% of its territory, and a forest reserve of 950 million tons.

Kenya has rich reserves of clean energy resources such as geothermal, solar and wind energy, and the geothermal resources in the Great Rift Valley can generate 7,000 to 10,000 megawatts of power. Kenya currently has a total installed capacity of 798.7 megawatts of geothermal power, accounting for 50% of Kenya’s electricity production. The Lake Turkana Wind Power Station under construction is Africa’s largest wind farm, with a designed capacity of 310 megawatts. The completed solar power plant in Kericho County is the largest power plant in East Africa, with a capacity of 1 megawatt. The Garissa Solar Power Station, a project with preferential loans undertaken by Jiangxi International, has an installed capacity of 50 megawatts and was expected to begin construction in August 2016.

Population and ethnicity

According to the London Economic Quarterly Review 2015, Kenya’s total population is about 46.1 million. Densely populated cities are Nairobi, the capital city (3.5 million people), Mombasa (940,000 people), Kisumu (390,000 people), Nakuru (310,000 people) and Eldorct (290,000 people).

According to the Chinese Embassy in Kenya, there are about 30,000 Chinese living in Kenya, mainly in major cities, including Nairobi, Mombasa and Kisumu.

There are 42 ethnic groups in Kenya, which can be classified into three linguistic groups: Bantu, Nilotic and Cushitic. The Kikuyu ethnic group is the largest, comprising around 17% of the total population. Other ethnic groups include Luhya (about 14%), Luo (about 10%), Kalenjin (about 13%), Kamba (about 10%), and so on. In addition, there are a small number of Indo-Pakistanis, Arabs and Europeans. The minority group with the most people (200,000) is the one of the Indian origin. The current ruling party coalition is the Jubilee Union, which mainly represents the Kikuyu and Kalenjin; while the main opposition party, the Coalition of Reforms and Democracy, represents the Luo and Kamba.

Most Chinese in Kenya work in the industries of trade, tourism, catering and medical care. According to statistics of the local association of industry and commerce of Chinese and Overseas Chinese, there are more than 20 individual merchants engaged in catering, tourism and medical care and over 100 individual merchants doing import and export trade in Kenya.

Political system

Kenya has adopted the presidential system of government. The president, elected by direct universal suffrage for a term of five years, is the head of state, head of government and commander-in-chief of the armed forces. The Cabinet consists of the president and the vice president appointed by the president, the ministers, the deputy ministers and the attorney general.

The Parliament was established in 1963 as Kenya’s highest legislative body. Initially there were the House of Representatives and the Senate, which were then combined to form the National Assembly. As stipulated in a new constitution in 2010, the Senate was established. After the general election in March 2013, the 11th Parliament, consisting of the National Assembly and the Senate, was formed, where members serve for a five-year term.

The National Assembly is composed of the Speaker and 349 members, of whom 290 arc elected, 47 are elected women delegates representing the 47 counties, and 12 are nominated (the quotas arc shared according to the proportion of scats of the political parties in the National Assembly). The Speaker and the Deputy Speaker of the National Assembly are nominated by each party from their non-members and members, and are elected by all members of the National Assembly. The leader of the largest political party or coalition in the National Assembly becomes the majority leader, and the leader of the second largest becomes the minority leader. The main functions of the National Assembly are to legislate, determine the allocation of national taxes, supervise the national financial expenditure, supervise the government, approve wars and extend states of emergency, impeach the president and vice president, approve the important personnel appointment by the president, etc. The Speaker of the National Assembly is currently Justin Muturi from the Jubilee Union.

The Senate consists of the Speaker and 68 senators, including 47 elected members (one for each county), 16 women senators (nominated according to the proportion of the seats of political parties in the Senate), two young members (one male and one female) and two senators representing the disabled (one male and one female). The Speaker and Deputy Speaker of the Senate are nominated by each party from their non-members and members, and arc elected by all senators. The main functions of the Senate arc to represent the interests of the counties and their governments, participate in the legislation of the Council on county affairs, consider and adopt bills concerning county affairs, consider and adopt the allocation plan of national taxes to each county, supervise the financial expenditure of the county governments, impeach the president and vice president, etc. The Speaker of the Senate is Kenneth Makclo Lusaka from the Jubilee Union.

The judiciary is divided into four levels, namely the Environment and Land Court, Industrial Court, High Court and Court of Appeal. The Kadhi’s courts arc set up in Muslim-majority areas. The Chief Justice is Willy Mutunga, who took office in June 2011.

Diplomatic relations

Kenya pursues a foreign policy of peace, good-neighborliness and non-alignment. It actively participates in regional and international affairs, vigorously promotes regional political and economic integration and opposes foreign interference. It attaches great importance to developing relations with the West and its neighboring countries, and pays great attention to the development of

African countries 233 economic and trade relations with other countries. It carries out all-round and pragmatic diplomacy, and emphasizes that diplomacy should serve the economy. In recent years, it proposed the strategy of “looking to the cast,” focusing on strengthening cooperation with China.

Kenya is a member state of the United Nations, the African Union, the Non-Aligned Movement, the Group of 77 (G77) and the Commonwealth, as well as the Intergovernmental Authority on Development in Eastern Africa (IGAD), the East African Community, the Common Market for Eastern and Southern Africa (COMESA), the Indian Ocean Rim Association and the Community of Sahel-Saharan States. As of 2008, Kenya had established diplomatic relations with 107 countries. Fifteen agencies of the United Nations system and 52 other international organizations have established headquarters, regional offices or representative offices in Kenya.

Economy

Located at the gateway to East Africa, Kenya has retained political stability since its independence in 1963 and is one of the most politically stable and countries with a relatively sound economy in sub-Saharan Africa. Since the 1990s, Kenya has liberalized its economy, privatized state-owned enterprises and gradually increased the number of industries that allow foreign investment. In order to encourage FDI, the government of Kenya formulated the Foreign Investments Protection Act and adopted a scries of measures to boost investment, such as cancelling import and export licenses, reducing import and export tariff rates, eliminating export tariffs, abolishing foreign exchange controls and establishing export processing zones. Kenya has relatively complete investment laws and regulations, with more than 30 of them protecting the interests of foreign investors. A new Investment Promotion Act was promulgated in 2005. Kenya has also signed bilateral investment protection agreements with more than 10 countries, including China.

Kenya has a mixed economic system with the private sector as its main body, which accounts for more than 70% of the overall economy. Agriculture is the industry with most foreign exchange in Kenya, in which horticultural products (flowers, vegetables, fruits), tea and coffee arc the main products for export. Kenya’s tourism is developed, being the second largest foreign-cxchangc-earning industry. Remittances are Kenya’s third largest source of foreign exchange. Kenya’s industry is relatively developed in East Africa, and is basically self-sufficient in domestic consumer goods.

According to the latest data released by Kenya National Bureau of Statistics, Kenya’s import and export volume reached USS21.99 billion in 2015, a slight increase ycar-on-ycar. The imports were about USS 16.07 billion, down 3% ycar-on-year. Exports were about US$5.92 billion, up 8% ycar-on-ycar.

According to the statistics of General Administration of Customs of People’s Republic of China, the total volume of bilateral trade between China and Kenya reached USS6.016 billion in 2015, a year-on-year increase ol'20.12%. China’s exportsto Kenya totaled USS5.618 billion, an increase of 20% ycar-on-ycar. China imported US$99 million from Kenya, growing by 27.65% from a year earlier. Trade between China and Kenya has risen rapidly for three consecutive years, from US$3,275 billion in 2015 to US$5.09 billion in 2014, and Kenya rose from being the 88th to the 64th largest trading partner of China, becoming China’s sixth largest trading partner in Africa. China has also overtaken India as Kenya’s largest trading partner. In recent years, bilateral political mutual trust between the two sides has strengthened, cultural communication has increased, economic exchange has deepened and the relations between the two countries have entered the best period in their history.

Kenya is a market full of potential. In its vision for 2030, the government of Kenya prioritized the energy sector, infrastructure and construction, agriculture, manufacturing, mining, tourism, wholesale and retail industries, financial services and the information industry in its development. Chinese-funded enterprises and individuals can strengthen cooperation with Kenya in the aforementioned areas.

Current status of industrial capacity cooperation

Foreign investments

Between 2008 and 2012, local and foreign investors invested about US$6.6 billion and created 65,000 jobs in Kenya, according to Kenya Investment Authority. Benefiting from the peaceful general election and exploitation of oil, gas and mineral resources, Kenya absorbed US$1.26 billion in foreign investment in 2013, an increase of 80.5% from US$698 million in 2012.

According to the African Economic Outlook 2015 issued by the African Development Bank (AFDB), in 2014 Kenya ranked sixth among African countries in terms of FDI, which reached US$1.2 billion, more than double the figure in 2013.

Table 6.2

Source: World Bank.

According to the World Investment Report 2015 issued by UNCTAD, Kenya absorbed US$990 million in foreign investment flows in 2014. By the end of 2014, Kenya had absorbed a foreign capital stock of US$4.37 billion.

The United Kingdom, the United States, Germany, France, Japan, Canada and other Western countries have opened hundreds of companies in Kenya, investing in major fields of agriculture, industry, commerce, finance, tourism, transportation and medicine. In recent years, emerging market countries including China have increased their investment in Kenya. From 2011 to 2012, China became the largest source of foreign capital in Kenya, with an investment of approximately US$250 million followed by Germany’s investment of US$194 million. The United Kingdom ranked third with US$86 million. Fourth was Yemen, with about US$59.3 million.

Kenya accepted a foreign aid budget of US$2,989 billion in the fiscal year 2013/2014, according to the National Treasury of Kenya. The top five aid partners and the respective proportions of their aid were the International Development Association of the World Bank (30.3%), China (13.3%), the AFDB (12.6%), the Global Fund (6.1%) and Japan (6.1%).

China-Kenya cooperation in industrial capacity

The two countries established diplomatic relations on December 14, 1963. China and Kenya signed the Economic and Technological Cooperation Agreement, Trade Agreement and Investment Protection Agreement, and established the mechanism of a mixed committee of bilateral economic and trade cooperation. China-Kenya economic and trade relations have developed well.

According to China Customs, the main categories of China's exports to Kenya in recent years include: electric motors, electrical equipment, audiovisual equipment and their components and parts; machinery, tools and parts; vehicles and their components and parts, except for railway vehicles; iron and steel products; plastics and their products; rubber and its products; chemical fiber filament; shoes, boots, leggings and similar products and their parts; cotton; and iron and steel. The main categories of China’s imports from Kenya in recent years include: ore, slag and calx; copper and its products; hide (except fur) and leather; coffee, tea, mate (tea) and spices; other plant fibers, paper yams and machine-woven fabrics; plastics and their products; wood and wooden products, plus charcoal; various food products; shellac, gum, resin and other plant fluid and juice; and fish and other aquatic invertebrates.

China’s direct investment flow in Kenya totaled US$278 million in 2014. according to the Ministry of Commerce of China. By the end of 2014, the stock of China’s direct investment in Kenya registered US$854 million. At present, the major investments by Chinese enterprises in Kenya mainly include: a cement pole factory built by Beijing Power Transmission and Transformation Co., which is the first cement pole factory in East Africa with an annual output of 25,000 cement poles; a TV assembly factory established by Qingdao Macwcll Trading Co., with an annual production of

100,000 TV sets - its products include black-and-white TVs, 34-inch color TVs and smaller types; a TV assembly factory and a production line of toilet paper and paper napkins built by Kangdenggao Science and Technology Co.; projects involving producing automotive batteries, solar batteries and fuel oil invested in by Hunan Xianghui Import and Export Co.; and digital TV sets in Kenya produced by StarTimes Media (Kenya) Co., founded by StarTimes Software Technology Co. in Beijing.

China’s project-contracting business in Kenya has developed rapidly since its inception in 1985, with the project-contracting market expanding and the total contract volume increasing year by year.

According to the Ministry of Commerce of China, in 2014 Chinese enterprises signed 102 new contracts involving project contracting in Kenya, and the amount of newly-signed contracts totaled US$5,351 billion and completed turnover US$1,696 billion. In the same year, 1,832 workers of various kinds were sent, and by the end of that year there were 4,938 Chinese workers in Kenya. The newly-signed large-scale project-contracting projects include: the Mombasa-Nairobi Standard Gauge Railway project undertaken by China Road and Bridge Corporation, the Garissa Solar Power Station project undertaken by China Jiangxi Corporation for International Economic & Technical Cooperation and the Nairobi Ring Network Reconstruction project undertaken by TBEA Co. The Chinese enterprises that entered the Kenyan market in its earlier days were China Road and Bridge Corporation, Sichuan International, Jiangsu International, China Overseas and China Wuyi. In recent years, with the improvement of Kenya’s economy and the increase in engineering work, other Chinese companies have entered the market too. The fields of project contracting have expanded from traditional highway and housing construction projects to power transformation, consultation design, water supply and drainage, geothermal wells, oil pipelines and airport expansion.

Areas and priorities of cooperation

According to a survey released by World Bank in April 2016, the number of Chinese companies investing in Kenya reached 400, making China the country with most investments in the manufacturing sector in Kenya. China’s investment in Kenya’s manufacturing sector, which accounts for 64% of all investment in the country, is concentrated in automotive parts, food, consumer electronics and telecommunications equipment. Medium-sized Chinese companies have provided Kenya with many low-tech manufacturing jobs. For example, there are 931 jobs provided by downstream industries involving communication equipment, 500 jobs provided by auto parts manufacturing, and 342 jobs provided by the metal industry. The report also points out that China’s infrastructure construction in Kenya does not count as direct investment.

At present, Kenya’s exports to China arc mainly raw materials, including animal fur, plant fiber, tea and coffee. Although its chemical and plastic products have also entered the Chinese market, their added value is low.

Kenya’s international investment index was 23 in 2015, ranking 23rd out of 108 sample economics, which shows that Kenya’s overall market environment is good and its potential is strong, which is appealing for foreign investors. In the ranking of the degree of contribution to the index, among 11 factors trade, market potential and the social environment were the top three, respectively. Good trade is the leading factor to attract FDI, and market potential is a necessary factor. In other respects, the contributions of Kenya’s natural, political and investment and financing environments are medium, while its financial stability, infrastructure and force majeurc contribute even less, indicating that Kenya’s financial environment is relatively unstable.

The economic model is used to further calculate the probability of occurrence of each factor in 2015. The calculation method is to measure whether the change of the main index exceeds a predetermined value. If so, the occurrence probability is high; if not, the occurrence probability is small. The result of calculations for Kenya are shown in Figure 6.4. Judging from the probability of occurrence of each factor, the probability of occurrence of trade and the natural environment is much higher than 0.5, indicating that the development trend of these fields in the future needs close attention.

Figure 6.3 Contribution of various factors of Kenya in 2015.

Source: International Investment Research Center of Wuhan University.

Figure 6.4 Probability of occurrence of various factors of Kenya in 2015. Source: International Investment Research Center of Wuhan University.

The above shows that Kenya has a large market potential, a beautiful natural environment and relatively developed trade. Therefore, China should strengthen its trade with Kenya and help Kenya to develop its tourist resources. Moreover, Kenya has a good social environment, which is favorable for foreign investors. Kenya’s market potential is large, so investments in Kenya will generate greater market space and greatly benefit the long-term development of enterprises.

Policy analysis

Rules of the investment industry

The law encouraging investment in Kenya is the Foreign Investment Protection Act. It was enacted in 1964 and has been amended many times. Investment is encouraged in areas such as agriculture, animal husbandry and fisheries, tourism, infrastructure, transportation, information and communication technologies, energy, water resources and healthcare services, manufacturing, services and training, finance, etc.

Laws and regulations on the investment of foreign enterprises and individuals in Kenya arc as follows:

• 1. The Investment Promotion Act stipulates that foreign investors shall have the approval of the Kenya Investment Authority to invest in Kenya, with a minimum investment of US$500,000, and the project they invest in shall be a cooperation and be beneficial to Kenya.
• 2. The Competition Act regulates mergers and acquisitions of enterprises and prevents improper concentration and abuse of monopoly status. The new Competition Law 2010 will come into effect on July 1, 2011.
• 3. The Anesthetic and Ncuropharmacologicals Act prohibits the production and marketing of anesthetics and neurodrugs.
• 4. For insurers, telecommunications companies and companies listed on the Nairobi Stock Exchange, the total holdings of foreign companies should not exceed 66.7%, 70% and 75%, respectively.
• 5. The Fisheries Act provides that a foreign enterprise shall have no more than 49% of the voting shares of a fishery company.
• 6. The Firearms Act and the Explosives Act provides that enterprises manufacturing and selling firearms (including arms) and explosives shall obtain a special permit.

The government of Kenya also stipulates that investment in restricted areas must first be approved by the authorities before investment registration. These investment activities arc controlled as follows:

• 1. An investment project that may have an impact on safety, health or the environment must be approved only with the approval of the authorities. For example, a project that has an impact on the environment should be approved by the National Environment Management Authority of Kenya, and projects that may harm public health need to be approved by public health authorities.
• 2. Production of goods subject to consumption tax shall gain the consent of Customs and the authorities in charge of consumption tax.
• 3. Investment concerning forest products and mining requires the approval of the authorities responsible for the environment and natural resources sector.
• 4. Investments related to energy and petroleum products arc subject to approval by the energy department.
• 5. Investment in the customs bonded area shall be authorized by the National Treasury.

In July 2015, Kenya’s finance minister announced the removal of ownership restrictions on foreign enterprises when they invest in local companies to attract foreign investment. Since then, except for strategic industries, foreign investors can own 100% of Kenya’s locally listed companies, up from 75%. At the same time, however, Kenya did not identify which industries arc strategic.

Rules on the methods of investment

The main forms of business in Kenya arc companies (including limited-liability companies and joint-stock companies), branches of companies registered outside Kenya and cooperative organizations.

A limited-liability company is an independent legal entity. During the liquidation of the company, the shareholders shall bear limited liability only for their shares, and the shares may be freely transferred without affecting the development of the business. A limited-liability company shall not ask the public to subscribe to its shares and shall have no more than 50 members. The joint-stock company may have its shares open to the public for subscription for shares with no maximum number of members, but not less than seven. Kenyan law docs not demand a minimum share capital of a limited-liability company. A limited-liability company must submit an annual report to the company registrar in the office of the Attorney General of Kenya, including the directors, secretary, shareholders and assets of the company. It must also submit an annual financial statement to the registrar.

Kenya has no special restrictions on local investments of foreign persons.

Kenya is a market with great potential. In its vision for 2030, the government of Kenya prioritized the energy industry, infrastructure and construction, agriculture, manufacturing, mining, tourism, wholesale and retail industries, financial services and the information industry in its development, and Chinese companies and individuals can strengthen cooperation with Kenya in these areas. Here is a reminder that Chinese enterprises should pay attention to the following matters when carrying out investment cooperation in Kenya:

• • First, operate in compliance with the laws and regulations and actively fulfill social responsibilities. To invest and operate in Kenya, one should fully understand the laws and regulations of Kenya, respect its social customs and create jobs, transfer technologies and train personnel locally. It is also encouraged that enterprises actively fulfill social responsibilities, do good deeds for the local people and integrate into the community and society.
• • Second, prevent and control security risks. Enterprises will closely follow and evaluate the political and economic situation in Kenya, pay close attention to the information on security risks and actively guard against political, economic, policy and natural risks.
• • Third, pay attention to environmental protection. Kenya has high requirements on environmental protection. In Kenya, it is necessary to obtain environmental impact assessment certificates in strict accordance with the law, seriously estimate the environmental protection cost and protect the environment during construction.

Cooperation cases

Personnel training

On September 17, 2015, the ministry-level Workshop on Sustainable Economic and Social Development of Kenya organized by the Ministry of Commerce of China opened in Beijing. Twenty-two senior students from various Kenyan ministries and commissions would receive a onc-wcck training course and field study. This senior workshop was also the highest-level Chinese training aid to Kenya in 2015.

It is reported that China’s foreign aid training, as an important form of foreign aid, has a history of more than half a century. Together with other forms of aid, it serves as an important tool of the country’s foreign strategy. It is a firmly upheld idea of China’s foreign aid training to share development experience and practical technologies with other developing countries through human resources development cooperation to help them foster talents, so that these countries can achieve sustained development on their own. Guo Cc, Counsellor of the Economic and Commercial Counsellor’s Office of the Chinese Embassy in Kenya, said that training aid to developing countries reflected China’s responsibility as a major power:

China’s economy is growing and is now the second largest economy in the world. Although we are still a developing country, wc have more obligations towards other developing countries within the framework of South-South cooperation. We arc obliged to help other developing countries make a breakthrough in economic and social development, poverty alleviation and capacity building, which is also a reflection of the responsibility of a major power. It is also a reason for the rapid development of China’s foreign aid training under the overall framework of foreign aid in recent years.

Kenya is one of the "demonstration countries’’ in Africa pioneering cooperation with China on “three networks and industrialization,” industries and production capacity. In 2015, China planned to provide 534 management and technical personnel in its aid training for Kenya, more than twice as many as in previous years. The main areas of training included agriculture, industry, professional technologies, the economy, trade, finance, taxation, tourism, security, transportation, infrastructure, education, health care, environmental protection, administration, culture, women’s capacity-building and human resources management. According to Guo, improving capacity is the focus of China’s foreign aid training:

There is a saying in China that it is better to teach people to fish than simply give them fish. China’s foreign aid training pays more attention to the improvement of capacity. The growth of capacity of people can boost a country’s potential and momentum. As such, in recent years, especially under the framework of the China-Africa Cooperation Forum, we have stepped up training in African countries and increased the scale of training.

According to Guo, paying close attention to people’s livelihood is an important feature of China’s aid training to Africa and Kenya:

Our training has always focused on people’s livelihood projects such as medicine, health care, agriculture, science and technology, infrastructure and other industries concerning people’s well-being in recipient countries. We believe that the importance of people’s livelihood projects to a country is self-evident and is reflected in our aid training to Kenya. So far this year, we have sent 47 officials and professionals in agriculture, forestry, animal husbandry and fishing to China. In health, medicine and medical care, we have sent 59 people to China for training; in environmental protection, meteorology, disaster control and ecological construction, we have sent 41 people to China.

Guo said that in foreign aid training, China pays special attention to the capacity improvement and capacity-building of government officials and professional and technical personnel of the recipient countries so as to promote local economic development:

After more than 30 years of reform and opening up, China has made remarkable achievements in economic development. We would like to share our experience with other developing countries. Therefore, the research on economic development is also a key area of China’s foreign aid training. Kenya sent most industrial and technical personnel to China for training.

It is reported that in order to help more professionals in Kenya get the opportunity to improve their abilities, China has also selected and sent excellent local employees in Chinese-funded enterprises and outstanding students from Confucius Institutes of several universities in Kenya to China for training. In addition to short-term professional-capacity training programs, higher education scholarships, including graduate students, have also been provided to high-tech personnel. A total of 26 people passed a rigorous test in 2015 and enrolled in the postgraduate scholarship programs in well-known universities in China that lasted one to two years.

Industrial capacity cooperation in the power industry

On October 5, 2016, the transformer factory of Chinese private enterprise Yoccan Group opened in Nairobi. This was Kenya’s first transformer plant completely capable of production, writing a new chapter in the production capacity cooperation of power industry between China and Kenya.

In a speech, Kenyan Energy Cabinet Secretary Charles Keter said that development of the manufacturing sector was an important part of Kenya’s “vision for 2030,” which set development goals for national industrialization and modernization. The opening of the new plant has broken the country’s dependence on imports of transformers, enabling Kenya for the first time to manufacture electrical equipment locally and bolstering its people’s confidence in “Made by Kenya.”

It is known that over the past 40 years, Kenya relied totally on imports in terms of transformer products, of which 70% were imported from India.

According to Yoccan, the annual output of the local manufacturing and maintenance business of the newly opened transformer plant was expected to reach US$20 million to 25 million and directly create about 150 local jobs, and the proportion of local members in the team was as high as 85%. The move would also drive the formation of industrial chains upstream and downstream of Kenya’s electric products and equipment, indirectly create more than 1,000 jobs and substantially increase local tax revenues in Kenya.

Guo Ce, Counsellor of the Economic and Commercial Counsellor’s Office of the Chinese Embassy in Kenya, said it was a milestone to set up the first transformer plant with independent production capacity in Kenya. This showed the determination and confidence of China to join hands with the Kenyan government and power enterprises to develop the power and energy industry in Kenya and even East Africa, and would deepen the production capacity cooperation between the two sides in the power industry.

Yu Yang, President of Yoscan Group, said: “We will bring China’s advanced electromechanical equipment manufacturing technology and experience of efficient production management to the African continent, and the electromechanical equipment manufactured by Kenya will also be of the first-class quality in the world.”

Interconnection transmission line project

North China Power Group signed a project contract with Kenya Electricity Transmission Company in 2016 to build the Kenya section of a Kenya-Tanzania transmission line project. The total project cost was USS26 million, with a total length of 96 kilometer.

It is reported that the transmission line project consists of the Kenya section connected to the Tanzania section. Its total length is 510 kilometers, of which 96 kilometers is located in Kenya and 414 kilometers in Tanzania. The Kenya section would be co-financcd by the government of Kenya and the AFDB.

The completion of the project would allow Kenya to import electricity at a low price from neighboring countries such as Tanzania, while helping to boost regional trade in power and energy, according to the head of Kenya Electricity Transmission Company.

Expansion project of production line of cement manufacturer

On October 20, 2016, Kenya’s largest cement producer, Bambusi, announced that it would spend 902 million Kenyan shillings (US$89 million) to expand the production line at its Nairobi plant to meet increased market demand; in particular, the need from large infrastructure projects such as standard-gauge railways. Kenyan media reported that the cement market was already saturated, and a move like this would further increase competition in the cement market, thereby further driving down prices and bringing benefits to the construction sector and the housing sector. It was understood that CITIC Heavy Industries was negotiating a commercial contract with Bambusi to undertake the project as an engineering, procurement, and construction (EPC) contractor.

There arc currently six well-equipped cement plants in Kenya, of which Bambusi is owned by the Frcnch/Swiss company Lafarge Holcim. Analysts said Bambusi’s move was not surprising, given its ample cash flow and the need to bring in new products. The selling price of cement in Kenya dropped by 10% from 2006, but profits of cement companies continued to rise, suggesting that cement prices have been artificially high.

Operation Right Project of the Mombasa-Nairobi Railway

In June 2016, the Mombasa-Nairobi Railway’s Operation Right Project made new progress. A working group consisting of members from Kenya’s Ministry of Transport, National Treasury and Attorney General’s Office, as well as Kenya Ports Authority and Kenya Railways Corporation, traveled to China and Australia to conduct due diligence checks on the China Communications Construction Group (CCCG) and the John Holland company and carried out on-the-spot investigation into the railway operation capacity of the two businesses. Currently, the Kenyan government has decided to hand over the operation right of the Monet railway to CCCG and John Holland for the first phase of five years. It is understood that John Holland is an Australian railway operator which was acquired by CCCG in 2015 and has 65 years of experience in railway maintenance, operation and management.