Who’s afraid of big bad Kenya? Not me

Saturday January 23 2010

When the East African Common Market was launched recently, reports had it that companies in Tanzania and Uganda were shaking in their boots, afraid that the “more advanced Kenyan economy” was going to bite off their heads.

This idea of a far more advanced Kenya economy is mostly a myth today, advanced on one side by petty Kenyan nationalists so that they can feel good about old glories, and on the other by vested business interests in Tanzania and Uganda who want state protection against competition.

One commonly hears statements like the “Kenyan economy is bigger than Tanzania’s and Uganda’s combined.” Yes, but that was 20 years ago.

Kenya’s gross domestic product in 1990 was $11 billion. Tanzania’s was $5.4 billion, and Uganda’s $4.03 billion. Kenya’s economy then was bigger than Tanzania and Uganda combined; twice that of Tanzania, and nearly three times Uganda’s.

By 2008, Kenya’s GDP was $31 billion. However Tanzania’s was $21 billion, and Uganda’s $15.8 billion. It’s no longer bigger than Tanzania’s and Uganda’s combined; it is not double that of Tanzania; nor is it three times bigger than Uganda’s. Indeed, depending on the GDP figures you look at in three or so years, Tanzania could be East Africa’s largest economy.

The story of the past 20 years in East Africa, therefore, is not how large Kenya’s economy is compared with those of its neighbours, but rather how much the others have closed the gap.


But all these arguments about the Kenyan threat mask a far more emotional issue.

A few years ago, I attended a seminar on the East African Community where, after a lengthy discussion about the economic benefits of a regional market, some contrarian chap got up and said, “The idea that Kenya businesses are going to benefit from the EAC is misleading because the so-called Kenyan businesses are multinational companies based in Nairobi and Asian enterprises. Indigenous Kenyans are not going to gain anything.”

You could have heard a pin drop, then people started shifting uncomfortably in their chairs because there were European CEOs of multinational firms in Nairobi and Asian businessmen in the audience.

In 1972, Uganda’s military dictator Idi Amin expelled Asians and Europeans, including those who were citizens, so the notion that white and brown people cannot be Africans is a dangerous one. However, some months later, I attended a Kenya Association of Manufacturers conference in Nairobi, and during the coffee break a KAM official, an Asian, told me that one reason KAM is not as effective as it should be is that many black Kenyan business people see KAM as an “Asian front” and so stay away.

If we accept that the “advanced” Kenyan economy is mostly Asian and European capital, then it should not be a problem. That is because Tanzanian and Uganda businesses are also mostly held by Asian and European capital.

And that is where this fear of Kenya falls flat on its face. First, it is Kenya that should be afraid because soon it could lose its position as the leading economy in East Africa.

Secondly, if the  “indigenous” people of East Africa are largely poor and don’t own the businesses that will benefit from an East African Common Market, then they should not fear Kenya because they all own nothing.

Charles Onyango-Obbo is executive editor of the Nation Media Group’s Africa Media Division. E-mail: [email protected]