Britain will continue to grant Kenyan products duty-free access to the UK under Economic Partnership Agreement, it has said.

Secretary of state for International Development Penny Mordaunt assured Kenya that Brexit will cut current trade barriers and strengthen bilateral economic relationship and long term prosperity of both countries.

“We now have an opportunity to do more with Kenya to open up trade around the world. This is already an extraordinary trading partnership,” she said.

UK agreed to support president Uhuru Kenyatta’s big four priorities including manufacturing, affordable housing, universal health care and food security.

‘We have agreed on a number of new initiatives aimed at strengthening the relations between the two countries. This will underpin mutual activities to attract investment, increase access to capital, deepen business links, create jobs for millions and support the delivery of president Kenyatta’s four priorities,” said Mordaunt in a joint press statement

The meeting which was organised by the Ministry of Foreign Affairs and chaired by National Treasury cabinet secretary Henry Rotich saw UK welcome Kenya’s confirmation to participate in the Commonwealth Heads of Government Meeting (CHOGM) to be held in April this year. The two countries will also co-host with the International Disability Alliance, the Global Disbility Summit in London in July

Other government officials attended the meeting includes Health CS Cleopa Mailu and his East African Community counterpart Phyllis Kandie. Others were principal secretaries Monica Juma of Foreign Affairs and Cris Kiptoo from the State Department of Trade in the Ministry of Industry, Trade and Co-operatives.

Enhancement of Kenya-UK ties is coming at the time when balance of trade continue to grow in favour of Kenya. According to latest data by the Central Bank of Kenya, Kenya exported goods worth Sh32.28 billion to UK in a period between January to October last year but imported goods worth Sh24.34 billion during the same period

Currently, UK is Kenya’s second most important export destination in Europe after Netherlands which imported goods worth Sh36.56 billion from Kenya between January to October last year. Kenya accounts for 27 per cent of of the fresh produce and 56 per cent of the black tea market in the UK

Although China has in recent times dethroned UK and US as the biggest source of foreign direct investment for Kenya, UK still accounts for 40 per cent of Kenya’s FDI from Europe.

According to the latest Foreign Investment Survey by the Kenya National Bureau of Statistics (KNBS), at least 100 UK based firms operate in Kenya, bringing in Sh15 billion in 2015. France, Sweden, and Netherlands brought in Sh11.2 billion, Sh4.6 billion, and Sh2.3 billion respectively

UK’s push to come out of EU is a blessing in disguise for Kenya’s fresh produce exporters who are finding it hard to sell their goods in Europe due to strict health standards

According to Horticultural Crops Development Authority (HCDA), horticultural exports from Kenya to EU were intercepted 29 times, reducing the country’s chances of being removed from the EU’s quality watch list. In 2012, the EU made changes to its legislation, allowing more inspections to verify exporters’ compliance with quality standards.

UK’s Brexit plans also provides Kenya a chance to cushion itself from EU’s Economic Partnership Agreement (EPA) demands that have not been welcomed by other East Africa countries especially Uganda, Burundi and Tanzania

The EPA is intended to guarantee the EAC traders duty-and-quota free access to the EU market in exchange for a gradual opening of up to 80 per cent of the region’s market to European products.

Kenya risk paying Sh10 billions tax per year for its exports to the European Union If her neighbours fail to sign the agreement. This is because Kenya is the only country in the region that is regarded as developing nation by EU hence qualifies to be charged Sh10 billion annually in export tax.

Tanzania and Uganda have nothing to lose or gain by signing the pact, given that they are listed under Least Developed Countries, exempting them from paying duty to access European markets.

Source: The Star

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TradeMark Africa.