Ruto’s American ‘goody bag’: Deals, debts, and diplomacy

President’s sojourn abroad was rich in symbolism but had substantial implications for Kenya’s economic future and already hefty debt burden.

By Mumbi Mutoko

In September, President William Ruto embarked on a mission to the United States, where he attended the United Nations General Assembly (UNGA) meetings and led Kenya’s delegation at the 77th assembly. His journey was rich in symbolism but had substantial implications for Kenya’s economic future and already hefty debt load.

State House deemed President Ruto’s tour a resounding success, and for good reason. Kenyans across the globe were glued to their screens, watching short clips of the President engaging with the titans of Silicon Valley and strolling through the bustling streets of New York as he headed for the UNGA sessions. While it’s easy to dismiss these moments as photo ops, they were part of a carefully orchestrated charm offensive aimed at luring investors into Kenya and fostering connections with Kenyan expatriates.

The Government of Kenya’s social media pages were ablaze with updates on the progress and “deals” President Ruto secured during his visit. The term “deals” often suggests a gift or favor, but are they truly that?

Former Senator Billow Kerrow, however, cautioned against the sensationalism and misconception surrounding these “deals.

‘’The media also is to blame; let me tell you, the president goes to the U.S. and says we have collected Sh 8.7 billion from somewhere to buy some electric buses. It’s not a grant; it’s not free money, but the way the media would put it, they will use the word support the government.

‘’These are loans, and nobody is giving you free money, so every time they go out, you know, and you hear about, you know the government is going to get this, the government is going to get that these are all commitments one way or the other which ultimately. In very rare circumstances would it be a grant. That is the challenge we’re having. There’s a lot of money being borrowed,’’ Kerrow explained.

So, what precisely transpired during Ruto’s high-profile visit to the U.S.?

Silicon Valley connection: Tech titans and economic prospects

The President’s tour commenced in Silicon Valley, Northern California, the epicentre of global technology innovation. Here, Ruto engaged in high-stakes meetings with American technology companies, aiming to entice them into setting up manufacturing operations and regional offices in Kenya. He promised a conducive environment for investments in technology and manufacturing.

The roll call at this exclusive gathering read like a who’s who of the tech world: Chief Executive Officers Tim Cook (Apple), Patrick Gelsinger (Intel), Ruth Porat (Google’s CFO – Alphabet), Brad Smith (Microsoft COO), and other top executives from Microsoft, Nike, GAP, and Levi Strauss. These corporate giants had an opportunity to interact with Ruto and discuss their potential investments in Kenya.

Tim Cook, CEO of Apple, made encouraging remarks about establishing a developer’s academy in Kenya, while Patrick Gelsinger of Intel saw Kenya as a promising investment destination. Brad Smith, representing Microsoft, commended Kenya’s attractive return on investment and its appeal to American venture capital.

Ruth Porat of Google announced a commitment to invest USD 1 billion in Africa, with Kenya poised to receive a significant share of these funds. Visa Global President Oliver Jenkyn revealed that Kenya had been selected as the only African country to host Visa’s global digital innovation studio, part of Visa’s $1 billion investment plan for Africa over the next five years.

While these developments signal exciting opportunities, they also raise crucial questions. What tax incentives will these American giants receive to establish their presence in Kenya? How will Kenya address local startups’ challenges, some of which have struggled or downsized?

Powering public transport: electric buses and sustainable mobility

One of the highlights of President Ruto’s visit was the signing of a Ksh8.7 billion ($59.2 million) deal with the U.S. Millennium Challenge Corporation (MCC) to acquire electric buses. This initiative aimed to ease traffic congestion in the Nairobi Metropolitan Area.

The project, known as “Blended Finance for Bus Rapid Transit (BRT),” was designed to accelerate private financing for electric (including alternative clean energy) buses. These buses would operate on one or more lines of the BRT system on Nairobi’s metropolitan area BRT road lanes.

This development took place amid a broader push towards sustainable mobility in Kenya. The Energy and Petroleum Regulatory Authority (EPRA) introduced guidelines for developing Kenya’s extensive electric vehicle (EV) charging infrastructure network. These guidelines mandated the installation of public charging stations every 25 kilometres along highways, laying the groundwork for an EV-friendly
future.

The Grain Deal

Another significant agreement President Ruto entered into during his U.S. visit was the grain deal with Ukrainian President Volodymyr Zelenskyy. This partnership signaled Kenya’s commitment to supporting Ukraine in the wake of Russia’s invasion, reaffirming a belief in a world order based on rules and international norms.

Ukraine’s proposal to establish “grain hubs” in Kenya and other parts of Africa aimed to address food insecurity in East Africa, exacerbated by climate change, political instability, and global supply chain disruptions. While this collaboration received praise for diplomatic overtures, it also faced scrutiny.

East African residents expressed concerns about food rotting away in their farms while the region received food assistance from Ukraine, a country embroiled in conflict. This sparked a debate about regional leadership and responsibility.

A complex tour with multifaceted outcomes

As his critics pointed out, President Ruto’s journey to the United States was not a mere sightseeing trip or a hunt for free money. Instead, it was a multifaceted endeavour, encompassing economic prospects, sustainable mobility, and international diplomacy.

While the promises and pledges made during this visit are enticing, the devil often lies in the details. Kenya must navigate complex challenges such as tax incentives for foreign investors, the survival of local startups, and the effective implementation of sustainable mobility initiatives.

Moreover, the grain deal with Ukraine raises questions about regional self-sufficiency and the responsibilities of East African leaders in addressing food security issues. It serves as a reminder that diplomatic gains should align with the immediate needs and realities of the region.

President Ruto’s U.S. sojourn was, without a doubt, a significant chapter in Kenya’s engagement with the global community. It brought opportunities and commitments, and its true impact will unfold as these agreements are translated into tangible actions.  (