Chinese Group to Build "Friendship City" in Nairobi

Beijing-based Damei Investment Company, a Chinese construction giant, announced its plans to build a megacity in Nairobi’s Athi River area at an estimated cost of Sh200 billion. The project, dubbed the Friendship City, will have the status of a Special Economic Zone (SEZ). 

The investment company announced that the project will be modelled along with the mega Chinese parks that comprise homes, factories and amenities like hospitals, schools and shopping malls all in one location. Businessman Bobby Kamani said that the city will occupy about 1200 acres of land in Athi River. He also indicated that he was a shareholder of the project through his Zuri Group of companies. 

Bobby Kamani is the son to Deepak Kamani, an individual infamous for being implicated in multi-billion-shilling scandals involving state agency contracts including the Anglo Leasing scam.

Construction is expected to start late this year. "There exists the potential of direct employment of 150,000 people whilst indirectly employing close to 500,000 people, thus impacting over 2,000,000 lives," said Mr Bao, the director of Damei Investment Company, in the project documents. Mr Bao additionally said that the project will attract an initial foreign direct investment of approximately Sh201 billion (about $2 billion) into Kenya with the potential of up to Sh756 billion (about$7.5 billion) by the time the entire development is complete.

SEZs in Kenya have tax shields offered within the confines of an SEZ. They are considered to be outside the customs territory of Kenya, thereby operating within a jurisdictional bubble that shields investors from taxes and similar regulatory hurdles that directly or indirectly impede trade.

Despite the hype, SEZs in Africa that are modelled in Chinese style have proven to be underwhelming, limited by operational and legal bottlenecks. One such projected is Konza City, also in Kenya, whose development is still way behind schedule. Konza City aims to be a smart city driven by technology and is fondly referred to as the "Silicon Savannah".

Header Image Credit: Samrack