Central Bank Governors share insight
Wednesday, October 13, 2021
Investment and finance were topics high on the agenda of this week’s Export Barbados (BIDC)’s Safari Ocean Barbados Kenya Business Alliance Forum, as the two countries seek to do their part to enhance South-South cooperation.
Delivering remarks during Wednesday’s opening of the meeting, held at the Hilton Barbados, participants, who included government and private sector representatives from both countries, were provided with greater insight into how cooperation between Kenya and Barbados could be leveraged to boost both economies.
In his remarks, Governor of the Central Bank of Kenya, Dr. Patrick Njoroge, noting that the forum was delayed some 18 months as a result of the COVID-19 pandemic, said that the delay has been a blessing, as it has provided stakeholders with a better understanding of what unites us, including our common heritage and the vision of shared prosperity.
“Cooperating in order to create opportunities for equitable growth is important. Doing it alone doesn't work anymore, and I think this is one of the points that both our leaders have underscored in the international fora... So here we are, as business communities engaging and cooperating in things that you could say, we have comparative advantage,” said Dr. Njoroge.
He went on to add that it is important to create the right environment for the private sector to thrive and to facilitate innovation. Dr. Njoroge said that this must be the approach in both countries.
His Barbadian counterpart, Governor of the Central Bank of Barbados (CBB), Cleviston Haynes, referring to the negative impact that the COVID-19 pandemic has had on the Barbados economy because of our heavy dependence on tourism, underscored the need for economic diversification going forward. He explained that while Barbados and other Caribbean countries experienced double digit declines, the performance of Kenya’s economy was flat.
“Kenya has a much more diversified economy and that is something to which we, even given our small size, need to aspire [to], to be able to diversify to a greater extent the economy, such that we are not totally reliant on one sector. It is not that we will give up on tourism, but it means that we have to broaden our economic base, so that we do not suffer these types of very large drops in economic activity that we did during 2020,” stated the CBB Governor.
He said that in spite of the 18 percent decline in the economic activity last year, Barbados has shown immense resilience, and the private sector has been able to discover new business opportunities. Governor Haynes spoke to this while insisting that “motivation, application and innovation”, can go a long way in helping to achieve set targets.
“The wider African continent which has faced economic challenges in the past, has in recent years applied these precepts, and experienced robust economic growth by leveraging its population, which is now approaching 1.4 billion; (and) its mineral resource endowments by adopting technologies. So, we see Kenya as a clear leader in this Africa revival, and its success creates potential markets for local business, into what is a largely untapped market”.
Speaking of the potential for greater South-South cooperation, the Central Bank Governor said trade data for Barbados indicates that in 2019, approximately US $3.1 million in goods were imported from Africa, and of that less than US$20,000 came from Kenya.
“Our imports of goods from the continent represent just 0.2 percent of total imports. So to me there is an opportunity for us to diversify, not only our production base, but also the source of the goods that we actually purchase to strengthen south-south cooperation. And our exports to the continent were approximately $2 million, Kenya’s share was just $4,000, and that is Barbados dollars,” he added.
Mr. Haynes said even though trade between Kenya and Barbados has been limited to date, there are definitely opportunities that can be capitalised on, and he spoke of the need for an air link between Africa and Barbados, noting that it is pivotal to advancing trade and investment.