Germany and Kenya share close and good relations in many ways. The political relations between our two countries are excellent, this is not only due to the fact that the German chancellor Angela Merkel visited Kenya in July 2011, but also because we have established a very close and trusting working relationship with the German ambassador Margit Hellwig-Boette, who is a very vocal defendant of Kenyan German friendship.
Germany is one of our major partners in regard to development aid, and we have managed jointly with our partners from the German Development Cooperation GIZ to establish a large number of projects in the water, health and agriculture sector, which are contributing greatly to the benefit of our people, especially in the rural areas.
This impressive success in the political and development arena needs to be supplemented now by closer economic ties between our two countries, and we are glad that this forum gives a new dynamic to the exchange of key private sector actors from our two countries.
Germany currently ranks only as number 99 in terms of Kenyan exports worldwide, and Kenya ranks only as number 89 in terms of overall German exports. Even though the external trade between the two countries has increased by over 10% in 2011, the overall trade figures reach hardly more than 300 Mio USD.
We would also like to see more technology transfer from Germany to our country, we encourage investors and projects to explore the option of Kenyan-German joint ventures, a direct partnership between African and German companies which has apparently worked out quite successfully in the West-African market.
We as Kenyan Government would like to ensure that more of the value adding of export products is being done here in our country. The more our agricultural products and our mineral resources are processed in our country, the more our people will benefit and the more the prices for these products will decrease on the international market. German machinery could play an important role in this regard.
Direct investment from Germany into Kenya has increased significantly over the last years, but remains still rather moderate compared to our partners from the UK, China and India.
These figures leave room for improvement in the bilateral economic relations, and I am confident to underline that the Kenyan Government has focused very much in the last years on creating the preconditions for increasing international investment and trade.
A key factor to encourage you investing and doing business with Kenya is our highly skilled workforce, which is unrivaled in the entire East African region.
In this regard, the government will invest another KSH 491 Million to increase the competitiveness of our youth in a globalized environment. This will include specific training programs and the provision of work experience to make our young people even more apt to the challenges of an international competitive labor market. Other investments will include additional funding for the Youth Enterprise Development Fund and the Women Enterprise Fund with KSH 550 Million and KSH 440 Million respectively.
Another key component to provide the framework for economic development will be the investments that my government is foreseeing in the infrastructure and energy sector as part of our Vision 2030.
In this regard, the government budget to upgrade roads, energy, rail connections and ports will reach a new record of KSH 268,1 Billion in 2012/13. Key beneficiaries include the Ministry of Roads, whose budget will increase by 18.5% to KSH 123,6 Billion. The allocation to the Ministry of Energy will increase by 39% to KSH 79,9 Billion, while the urban commuter rail system will receive KSH 1,45 Billion to complete the rail link between the airport and the Central Railway Station.
Another step that the Kenyan Government has taken to encourage international investment and trade is the establishment of the Kenya Investment Authority (KenInvest) which serves as a one-stop-shop for international companies to set up subsidiaries in our country, providing advice on how to set up business and facilitate the provision of work permits. This is complemented by the Export Processing Zones Authority (EPZ) which provides tax breaks for companies producing in Kenya for the export.
The Kenyan Private Sector as a whole is very able and competently represented by the Kenya Private Sector Alliance KEPSA, which has been a very vocal and powerful.
All this support is now being supplemented by a cornerstone that has been missing in the past. Today does not only mark the 1st Kenyan German Business Forum and the 25th anniversary of the GBA, but the official opening of the Delegation of German Industry and Commerce here in Nairobi.
When I met with Chancellor Merkel in Nairobi in July 2011, we both agreed that an official representation of German Industry and Commerce in Nairobi would greatly enhance economic cooperation between our two countries.
Subsequently my government signed an International Agreement with Germany and the Delegation office started in March this year with the preparations for the official opening. With the organization of this forum, together with the German African Business Association, and the mobilization of such a high level business mission from Germany, the Delegation has given the successful first prove of its efficiency. This office will provide the first point of contact for all German companies wanting to do business with Kenya. It will furthermore provide services to the Kenyan private sector when looking to do business in Germany.
Because we need to remember that trade and investments is not a one way street, as much as we welcome quality German products in our local market, the more we would like to increase the export of our high quality Kenyan products on the German and European market. In this context I am not only thinking about our world class coffee, tea or flowers but also about our IT technology, such as MPesa, which has turned into the fastest growing money transfer system on the African continent.
The Delegation of German Industry and Commerce will be a key partner for the relevant private sector actors to increase and enhance the economic ties between our two countries, for the benefit of our two people.
By Hon. Raila Odinga
Prime Minister of the Republic of Kenya.