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Kenya is positioning itself as the US ally South Africa once was

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Natale Labia writes on the economy and finance. Partner and chief economist of a global investment firm, he writes in his personal capacity. MBA from Università Bocconi. Supports Juventus.

President William Ruto’s visit to Washington symbolises a strategic realignment in Africa, with Kenya emerging as a key economic and geopolitical partner for the US while South Africa hedges its bets.

The first African country to be invited for a state visit to the White House for 16 years might, once upon a time, have been South Africa. Instead last week it was the turn of President William Ruto of Kenya to be invited to Washington for only the sixth such visit during President Joe Biden’s four years in office.

The lavish reception hosted by Biden on Thursday included the requisite celebrities and politicians. Actor Sean Penn, Star Trek: The Next Generation star LeVar Burton as well as Barack Obama and the Clintons were all in attendance. Many tech bosses were invited, including Brad Smith, the president of Microsoft; Ruth Porat, president and chief financial officer of Google parent Alphabet; and former Meta (Facebook parent) chief operating officer Sheryl Sandberg, the famed author of Lean In. The guests enjoyed chilled tomato soup, beef short rib, Maine lobster, and a white chocolate basket for dessert, all paired with wines from California and Oregon.

So, why the red carpet for Kenya? It all underscores Kenya’s sudden strategic importance to the US, especially compared with other countries in Africa which may until recently have been seen as more natural or important allies. South Africa is certainly one of them. Nigeria potentially one too.

Kenya’s economic trajectory over the past decade has been impossible to ignore, especially compared with South Africa’s relative stagnation. The east African powerhouse has experienced consistent GDP growth averaging 4.85% over the past five years, compared with a paltry 0.4% for South Africa, according to Bloomberg. This has been driven by sectors such as technology, agriculture and services. The country has positioned itself as a hub for tech innovation in Africa, with Nairobi earning the nickname “Silicon Savannah”. Investments in infrastructure, such as the railway from Nairobi to the coast and expansion of port facilities in Mombasa, have further bolstered economic growth.

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The economic implications of Ruto’s visit have been impressive. During the state visit, Biden proposed to make Kenya the first country in Africa to benefit from the Chips and Science Act, enabling the country to support assembly, testing and packaging in the semiconductor sector, while the US Agency for International Development announced a $32-million investment to promote science, technology, engineering and mathematics education in Kenya.

Google said on Thursday it is building the first undersea fibre-optic cable that will directly connect Kenya with Australia, shoring up internet access in one of the least-connected parts of the world. Microsoft also announced plans this week to build a $1-billion geothermal-powered data centre in Kenya, part of a multiyear plan to dramatically increase cloud computing capacity in east Africa. 

The Kenya National Highways Authority signed a $3.6-billion agreement with Everstrong Capital LLC, the US private equity firm, to build an expressway linking the nation’s two largest cities – a 440km toll road between the capital, Nairobi and the port city of Mombasa. 

The picture, needless to say, looks rather different in South Africa where issues such as rolling blackouts and widespread corruption scandals have eroded investor confidence. Transnet has self-destructed and roads crumble.

South Africa has traditionally seen itself as the gateway to Africa for international investments. Now the economic centre of gravity on the African continent could be shifting. Mining behemoth BHP is, as it stands, willing to buy Anglo American on the proviso it can dump most if not all of its South African assets. Private sector investment into South African infrastructure, outside of the renewable energy space, has been minimal.

But it is not just economically that Kenya is catching up with South Africa. Geopolitically, the burgeoning US-Kenya relationship is likely to cause consternation in Pretoria. South Africa’s participation in the BRICS alliance (Brazil, Russia, India, China and South Africa) and its increasingly cordial relations with Russia and China have forced the US to look elsewhere for its most trusted partner on the continent.

South Africa’s foreign policy has often been at odds with US objectives. Pretoria’s stance on issues such as the Ukraine conflict, where it has refrained from condemning Russia’s actions, and Gaza, where it has led the legal challenge against Israel at the International Court of Justice, are all in clear defiance of the US. 

South Africa’s strained relationship with the US has arguably never fully recovered following the allegations, made by US ambassador to South Africa Reuben Brigety, that the US had proof South Africa was supplying arms to Russia on the ship the Lady R

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In this context, Kenya’s growing rapport with America serves as a stark contrast. Trade will be central to this, specifically the future of the African Growth and Opportunity Act, which gives members preferential access to the US market. It remains uncertain whether South Africa will be included in its renewal alongside Kenya in 2025.

Ruto’s visit to Washington symbolises a strategic realignment in Africa, with Kenya emerging as a key economic and geopolitical partner for the US while South Africa hedges its bets. As the US seeks to counterbalance the influence of China and Russia across the continent, its partnership with Kenya is set to grow stronger. 

South Africa, meanwhile, faces a critical juncture in its foreign policy trajectory. It will be up to the next government after June to decide. Either try to defuse the tensions and rebuild its relationship with Washington, or double down on Moscow and Beijing. In an increasingly polarised world, the choice is clear. DM

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  • A Rosebank Ratepayer says:

    Beginning with Nicholas Crisp through to Julius Malema it is difficult to see how these radical economic transformation apostles think, with regards to ensuring the long term necessary conditions to generate the enormous resources needed for their tilts at their gargantuan windmills.

    Maybe they think, metaphorically of course, the economy is like a banana tree.

    All one needs to do is eat this year’s bunch now and then wait for next year’s bunch to appear… it just happens somehow – no need for conducive economic policy supportive fiscal support etc.
    In any event, there are those with more resources than others. They are naturally targets for wealth transfers…

  • Malcolm Mitchell says:

    Surely the penny has dropped with our politicians – I fear not!

  • Kevan O'Donnell says:

    Dr Phil. ‘The best indicator of future behaviour, is past behaviour’. I would be very happy to see the current lot making the best decision for SA but alas. Dr Phil.

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