Now Brazil eyes a piece of Kenya

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A number of investors from Brazil are seeking a piece of Kenya’s agriculture and infrastructure sectors.

Brazil, the world’s sixth largest economy, 18 times the size of Kenya, has a well developed and mechanised agricultural production system that has boosted its food security.

Speaking to Smart Company in an interview, Kenya’s ambassador to Brazil, Mr Kirimi Kaberia, said he was in talks with several investors from that country’s agriculture and infrastructure sectors, who are keen to set up production lines in Kenya and enhance trade ties between the two countries.

According to Mr Kaberia, Kenya’s agricultural sector, being largely small, can import suitable machinery from Brazil, given that the two countries have similar geographic conditions.

“The unusual thing about these machines is that they are simple, easy to operate, and have worked very well in Brazil,” said Mr Kaberia, adding; “In the past, we went to the West (Europe and US) and bought sophisticated machines that are meant to cater for very adverse climatic realities in Europe, which cannot really work for the predominantly small holder farmers.”

Mr Kaberia said some investors have visited the country and are considering putting up production lines to assemble agricultural machinery targeting Kenyan farmers and the larger East African region.

“Instead of bringing them in their manufactured form, we are telling the companies to put up production lines here,” he said.

The envoy said focus on increasing investment in agriculture and improving infrastructure like roads, energy, and water would enhance Kenya’s food security initiatives, reduce costs, and create jobs.

He said agribusiness has become a major part of his efforts to stimulate productivity — from research to production and distribution and even other parts of the chain, like collaborations in research and development.

“Kenya, just like Brazil, is an agricultural country. Brazil has for a long time put a lot of emphasis on research and development in agriculture. This has enabled it to become one of the strongest food producing countries in the world, and that is what we can borrow from them,” Mr Kaberia said.

According to Pedro Cordeiro, the regional manager of Brazilian construction company Queiroz Galvao, which is setting up operations in Kenya, the country has a high growth potential following improvement in the business climate over the past decade.

However, its investment potential is hampered by challenges in infrastructure and energy, which he seeks to address. The company is in talks with the government over plans to decongest Nairobi.

Brazil relies on its agricultural and mining sectors to boost its exports. The country is, for instance, the world’s biggest exporter of orange juice and soya bean. Other core exports include iron ore, oil, and raw sugar.

The country, on the other hand, primarily imports raw materials, heavy equipment and machinery, and motor vehicles. Its main trading partners are China, the US, Germany, Netherlands, India, and Argentina.

According to statistics, Kenya exported goods worth Sh41.4 million to Brazil and imported goods worth Sh1.8 billion from the largest economy in Latin America between 1998 and 2007, signifying a huge trade disparity.

The trade deficit may widen further following the decision by Kenya Airways to import Embraer aircraft from the country.

By JOSHUA MASINDE jmasinde@ke.nationmedia.com

http://www.nation.co.ke/Features/smartcompany/Now-Brazil-eyes-a-piece-of-Kenya/-/1226/1945214/-/t7cw83z/-/index.html