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ECONOMY: Kenya Flush With Money From Expatriates

Charles Wachira

NAIROBI, Oct 31 2008 (IPS) - As your plane taxis along the runway at the Jomo Kenyatta International Airport, a first-time visitor to Kenya will marvel at the world class status of the major entry-point to east Africa’s premier economy.

And, most probably, you would have jetted in with the national carrier, Kenya Airways, an award-winning airline that flies across the globe with the provident logo ‘‘The Pride of Africa’’ imperiously smacked on the sleek bodies of its planes.

Exiting from the airport the ubiquitous mob of taxi operators, all out to make an honest buck, will be waiting. The successful one will drive out with a knowing but cheeky smile, intermittently making the usual small talk with his latest catch.

The first billboard standing next to the road always creates an indelible impact with its claim. Kenyans residing in the Diaspora can advise a first-time visitor to Kenya to put their smart money on what is being advertised. It simply reads: ‘‘Kenya my country, Tusker my beer’’.

Tusker is the flagship tipple for East Africa Breweries Limited, east and central Africa’s primary – in capitalisation terms – brewing concern.

Today the brand is found on venerable shelves across the globe, such as Tesco, the third largest supermarket in the UK. In Australia, Canada and the U.S., Tusker Mart, another product of East Africa Breweries Limited, continues to rake in serious money for the brewing behemoth.

But it was not always like this.

The push to sell East Africa Breweries Limited products to the Diaspora – in the hope to ride the wave of economic patriotism targeting local émigrés – began in July 2006. The volumes have since surged on a year-to-year basis. As a spin-off, both the breweries and the local economy have continued to benefit from the inflow of hard currency into the local economy.

In the financial year ending June 30, 2008, the brewing firm exported to the Diaspora beer worth 1.5 billion shillings (21.3 million dollars).

In recognising the linchpin role the Diaspora economy plays in other countries, the Kenyan government in 2007 drafted the Kenyan Diaspora Bill which sought to rope in Kenyans working in the Diaspora.

An outline of the bill, prepared by government and a technical team of Kenyans living in the Diaspora, initially admitted that a lacuna linked the two economies – Diaspora and local.

The draft bill read: ‘‘the Diaspora renders concrete development changes but these remain unheralded, unappreciated and without structural support’’.

According to the latest World Bank statistics for the year ending 2007, money transfers from the Diaspora have now become the leading source of foreign exchange, scraping in 85 billion shillings (1,207 million dollars) and outpacing horticulture at 70 billion shillings (994 million dollars) and tourism at 65 billion shillings (923million dollars), traditionally the two leading industries.

Indeed, if the World Bank were to be believed, the Diaspora is a goldmine for any economy, especially poor and emerging ones.

The Bretton Woods Institution says in its report that, globally, around 300 billion dollars is repatriated back to ancestral homes annually, around $14.5 billion by African migrants. Besides, the banking organisation says remittances from the Diaspora ranks only second behind foreign direct investment (FDI) as a source of funding for developing economies.

Separately, a survey conducted by Kenya Club, a London-based organisation, says Kenyans ensconced in the UK send over 50 billion shillings (71 million dollars) back home annually while those located in Germany remit about 360 million shillings (five million dollars).

‘‘It is a more stable source of capital than private capital and is expected to rise. This stability has encouraged some emerging market economies to use remittances as collateral against which to borrow on the international capital market on better terms than otherwise,’’ according to the World Bank report.

Beginning 2007, Kenya ranked second in terms of the value of remittances. Nigeria was first with 3.3 billion dollars and Sudan third with 1.2 billion dollars. Senegal and Uganda receive 900,000 million dollars each while South Africa was the beneficiary of 700,000 million dollars. This is according to the World Bank report titled ‘‘Migrations and Remittances Fact Book 2008’’.

Veritably, beginning 2003, a year after the momentous defeat of a peculate regime under the heel of a peremptory Daniel arap Moi, the future of this state of 35 million people has certainly been looking up.

For instance, in 2006 the economy registered a 6.1 percent annual growth, making it the highest the country has achieved in three decades. And even with the wounds experienced early this year as a result of a disputed presidential election, the country will still register annual growth of four or more percent.

‘‘The perception of Kenya’s economy by the International Monetary Fund (IMF) board is very positive. We are seeing it picking up after the developments following the December general elections,’’ says Peter Gakunu, an IMF executive director in charge of 21 African countries.

This is despite the rigours of navigating a country, burdened by internecine ethnic suspicions, lingering poverty and a servile middle class whose only claim to nationhood is a blatant exhibition of consumption.

With certain assurances today that one’s remittance is safe and that, in case of financial malfeasance, remedial action is guaranteed, the Diaspora economy will continue feeding the local market.

In case of hesitant Kenyans in the Diaspora doubting whether their monies are safe, a Kenya Investment Authority ( KIA) unveiled this September has its job cut out.

‘‘The Kenya Investment Authority, being the institution mandated to market Kenya, has come up with a strategy that will build the product and brand of Kenya and sell it to potential domestic and international investors,’’ says Susan Kikwai, KIA’s managing director.

And, if KIA fails to convince, a few bottles of cold Tusker can always do the trick.