BY KRISHNAN RAGHAVAN, LAURA KUANG, AND HIMMAT SINGH SANDHU
Krishnan Raghavan, Laura Kuang, and Himmat Singh Sandhu are second-year International Development students who recently traveled to Nairobi, Kenya to build a business case for increasing Chinese investment in environmentally-friendly goods and services on behalf of the World Wildlife Fund.
The IDEV Practicum allows students to work directly with public, private and non-governmental organizations as a capstone to their graduate studies. The IDEV Practicum Blog is a six-part series that chronicles the travels of IDEV students who take on client projects over winter break.
From the moment we touched down at Jomo Kenyatta International Airport, it was clear to our Practicum team that Nairobi is a boomtown. Amidst the sprawling vines and stands of jacaranda and acacia trees that once dotted the quiet lanes of the residential neighborhoods outside the Kenyan capital’s bustling central business district, towers of mirrored glass sprout like exotic invasive species. Minibuses, motorcycles, and Uber drivers jostle for space on freshly poured roads glistening under the equatorial sun, while construction cranes loom on every street corner like the menacing marabou storks that scavenge for trash along the city’s busy streets.
Much of this new development is driven by Kenya’s growing ties with a new trading partner: China. While other investors have been deterred in recent years by concerns regarding corruption and terrorism, China has doubled down, investing more than $6.5 billion in Kenya since 2012. Chinese investment in Kenya has focused primarily on large-scale infrastructure projects, like the construction of a new railway network that will eventually interlink the six nations of the East African Community. While a boon to Kenya’s developing economy, these types of projects also tend to have major environmental impacts – the railway network, for example, is anticipated to disrupt elephant migration patterns in two of Kenya’s national parks. This is a particularly sensitive issue in the Kenyan context – not only has the country felt the effects of climate change firsthand through exposure to increasingly severe recurrent droughts, it is also a major haven for wildlife. Conserving these species is not only an ecological imperative for Kenya but also an economic one: tourism, driven largely by wildlife viewing and safaris, accounts for over 10% of the country’s GDP.
Mindful of the reality that Chinese investment in Kenya is not likely to dissipate soon yet eager to see at least a portion of this investment put towards more sustainable ends, the World Wildlife Fund (WWF) engaged our Practicum team to build a business case for increasing Chinese investment in environmentally-friendly goods and services. Working with a counterpart Practicum team covering China, our task was to evaluate three value chains – distributed renewable energy, organic tea production, and ecotourism – in terms of obstacles to and opportunities for expanding Chinese engagement.
Within a few hours of our first meeting with WWF in country, we managed to line up several meetings with a number of key stakeholders through WWF-Kenya’s network. After a few more hours of cold-calling ministries, NGOs, and commercial actors we soon had a full slate of meetings, in Nairobi as well as the coastal town of Mombasa, where Kenyan tea is primarily traded and exported, and the Maasai Mara, a popular safari destination and important wildlife habitat. Over the next two weeks, we met with a number of stakeholders from government, civil society, multilateral organizations, and the private sector to better understand their perspectives on these issues and use these findings to inform further research and recommendations for WWF.
Broad trends emerged in each sector. In ecotourism, we found that while the sector is relatively well-developed, with significant awareness of ecotourism principles emphasizing environmental sustainability and local community development, there is limited awareness among service providers regarding the value proposition of ecotourism certification. Additionally, there appears to be a lack of interest in ecotourism offerings from Chinese consumers and investors. While renewable energy is the principal source of energy in Kenya, the distributed renewable energy sector is relatively underdeveloped and the policy environment is less than enabling of the sector. China is actively involved in many renewable energy projects, however, mainly in the form of trade rather than investment, with few current initiatives to build local capacity. In the case of organic tea, there is tremendous potential in scaling up production as well as value addition activities in Kenya. An institutional effort toward developing China as an export market will go a long way in strengthening the position of Kenya’s premier export product.
There is little doubt that Chinese investment in Kenya is no passing trend but an increasingly important fixture with transformative potential for the Kenyan economy. Harnessing this investment at the ground level as a force for sustainable growth will help ensure this transformation leads to lasting improvements in social and economic well-being for Kenyan residents – human and wildlife alike.
PHOTO CREDIT: Authors.