Chancellor of the Federal Republic of Germany, Angela Merkel, speaks during press conference in Nairobi, Kenya.

Nairobi - Chancellor Angela Merkel told Kenya on Tuesday to clamp down on corruption or miss out on future German investment.

“We want to strengthen the business relationship between Kenya and Germany, but a secure framework for investments is needed for that,” said Merkel in Nairobi, her first stop on a three-day, three-nation tour.

She also pointed out that Odinga and Kenyan President Mwai Kibaki had told her a law against corruption was in the planning.

Kenyan Prime Minister Raila Odinga retorted that China was offering funds with no strings attached.

Odinga said German business could expect a pro-investment climate, but stressed that other nations were well ahead in their business investments in Kenya, with China leading the pack.

Chinese engineers are building new roads, rail lines and airports, and charging far less for it than European companies do.

Asked by reporters if Chinese business had any deleterious effects on Kenya, Odinga said, “China came here to invest. The Chinese invest in the areas where Europe won't.” Odinga added: “We're not the colony of any country.”

Kibaki urged investments from corporate Germany. But many of Germany's big companies were missing from Merkel's business delegation, among them Siemens and BASF, which count on Merkel to open doors for them on her Asian trips.

“Development aid is no longer the way forward in most African states. It's private investment that is needed,” Merkel's main adviser on Africa, Guenter Nooke, told the German Press Agency dpa.

“You don't just fight poverty by sending relief. You have to provide the people with a chance to earn their own living.”

In a speech at Nairobi University, Merkel referred to the ethnic killings that rocked the country four years ago, saying she hoped Kenyans could learn from Europe's own sorry history.

“There has to a willingness to overcome ethnic differences, even if it runs counter to your own feelings,” she told several hundred students.

She appealed to Kenyans to ensure the presidential election next year was not marred by violence.

Merkel earlier pledged 1 million euros (1.4 million dollars) in aid to the world's biggest refugee camp, at Dadaab in Kenya, as a famine in the Horn of Africa worsens, forcing people to migrate.

The UN High Commissioner for Refugees, Antonio Guterres, on Monday appealed for aid for the camp, which is near the Somali border, after the failure of rains in the Horn of Africa region.

He said it could otherwise turn into the world's worst humanitarian disaster. An estimated 10 million people, 2 million of them children, face famine after the worst drought in 60 years.

Dadaab was originally built to house 90 000 people, but now shelters 380 000, most from Somalia. There are 10 000 arrivals each week.

Merkel was to fly to Angola on Tuesday evening, and visit Nigeria on Thursday, in a trip focused on concluding deals that promise German investment and secure access to oil and minerals.

German industry, meanwhile, urged Merkel to ask African governments not to let China secure exclusive deals for the 15

minerals known as rare earths.

“Exclusive contracts signed by African governments to benefit Chinese partners don't just hurt German industry,” said Martin Wansleben of the German Chamber of Industry and Trade DIHK.

They also made African nations dependent on China, he told the newspaper Passauer Neue Presse. - Sapa-dpa