Swiss trade mission laid ground for trade, investment
Dr Ralf Heckner
Last month, a high-level trade mission from Switzerland visited Nairobi. Switzerland was not the only country to have a business delegation visit Kenya.
Ireland, Sweden, Belgium, The Netherlands and the US have also had similar delegations over the past few months.
Shortly after the departure of the Swiss business mission, I bumped into several people who had questions about the impact of Switzerland’s trade mission: Were there any business deals signed? With whom? How much money would be invested in Kenya, and how soon?
These are all good questions, especially because the eagerness for new investment is tied to the need to create more jobs for youth in Kenya.
Therefore, I feel I have an obligation to provide answers to Kenyans. So, let me explain how such trade missions work.
Generally speaking, most trade and investments are undertaken by investors focusing on their neighbouring countries.
Kenyan banks, insurance companies and retailers, for example, have ventured in Uganda, Rwanda, Tanzania, South Sudan and DR Congo markets.
The investments are normally done by the private sector on its own. You do not, for example, have to explain to Equity Bank or Jubilee Insurance the investment opportunities in East Africa or the Great Lakes region.
The same is true for Switzerland. Swiss companies do business in Germany, France, Italy, Austria or the UK based on their own initiative, normally without any assistance by the government.
But when Swiss businesses want to invest in regions and continents far from home, there is an established procedure for how things are done.
Of primary importance is an official representation in that region. Well, Switzerland has had representation in Kenya through a consulate in Nairobi since 1955; and, after 1964, we had a full embassy.
Embassies, Consulates and Business Hubs (established in nations of particular economic interest to Switzerland) inform their government and businesses at home about investment opportunities in their respective countries and regions. That’s exactly what my embassy has been doing over the past years.
Fortunately for us, the top leadership of my country has shown a keen interest in Kenya. In 2018, the President of the Swiss Confederation visited Kenya and spoke about Kenya as a business case for Switzerland.
That was a strong signal to the Swiss businesses back home. The Swiss State Secretary of Economic Affairs followed up with a trade mission in November this year.
So, here is the essential point: you do trade missions to countries far from home, in which you already have an interest. It’s a kind of expedition to explore new markets, where you believe there is good potential.
Now how does a trade mission work?
Countries with state-owned enterprises and state-owned export banks normally sign trade deals with the respective government. This is a government-to-government deal making, usually done in combination with loans.
This is not the Swiss way of doing business. Switzerland has a vibrant private sector. And it is the private sector that is looking for business opportunities. Furthermore, Swiss businesses are interested in the existing legal, financial and political framework of a country.
Are Kenya’s policies and legislative frameworks investor-friendly? Are Kenyan officials willing to take their time to meet with Swiss business representatives?
I’m happy to report that the Swiss trade mission was incredibly well received by the Kenyan authorities.
In addition, the businesses want to learn from Swiss companies which are already established here. That’s how a Swiss trade mission works. It lays a strong, and indispensable, foundation for future investment.
When the Central Bank Governor Patrick Njoroge met with the Swiss investors, he compared Kenya and its investment opportunities with a rose: beautiful, but with some thorns.
An investor and business owner from abroad needs to grasp the beauty of the rose but must be mindful of the thorns that go with it.
That’s what a trade mission is meant for—to understand the “rose”and report back home about it. —The writer is the ambassador of Switzerland to Kenya