Fred Aminga @faminga
Kenya is set to tap the $2 trillion (Sh203 trillion) Commonwealth market which boasts 53 independent countries with a combined population of 2.4 billion people.
This follows President Uhuru Kenyatta’s attendance of a Commonwealth leaders’ summit last week meant to boost intra-commonwealth trade. The forum will not only boost trade relationships post-Brexit but also help Kenya reduce risk by diversifying her markets.
Commonwealth comprises countries from various continents namely Africa (19), Asia (seven), the Caribbean and Americas (13), Europe (three), and the Pacific (11).
“We continue to pursue our agenda to boost trade among the Commonwealth countries, ensure increased investments in Kenya, and deliver on the values of democracy and good governance for which Commonwealth is known,” Uhuru said on Friday.
Kenya’s trade surplus in the East African Community (EAC) has been declining gradually since 2011 due to the strengthening manufacturing sector in partner states and increased competition from imports from China and India.
EAC is a major export destination for Kenyan exports, accounting for 21 per cent of total exports in 2016 while those to Common Market for Eastern and Southern Africa (Comesa) accounted for 14.4 per cent and the rest of Africa 5.3 per cent.
The forum also came amid subdued global trade, and particularly slower growth in UK, Kenya’s strategic trading partner, following its decision to exit the European Union.
Kenya’s total trade, which is about 40 per cent of gross domestic product (GDP), has a very small global share as the bulk of exports are raw materials and primary products. Imports, on the other hand, consist of high value capital and finished products, thus sustaining the persistent trade deficit with various partners outside Africa.
This small share of exports exemplifies the potential for increasing Kenya’s export market to the African markets, with more value addition and deepening intra-commonwealth trade.
The immediate result linked to the summit include expected dual-listing of National Oil Corporation of Kenya (Nock) on the London Stock Exchange (LSE) and Nairobi Securities Exchange (NSE) next year.
The forum also gave Kenya an opportunity to bolster trade partnerships with countries whose trade volumes with Kenya had decreased. President Uhuru held bilateral talks with Pakistani Prime Minister Shahid Khaqan Abbasi to iron out relationship issues between the two countries following a recent dip in trade.
Kenya exports coffee, tea, industrial supplies, fuel and transport equipment to Pakistan and imports mainly rice. Uhuru who has placed emphasis on expanding manufacturing sector including agro-processing, leather and textiles and blue economy, got a major boost, especially with the latter.
The countries agreed to promote economic growth through exploitation of resources in the oceans, choosing Kenya to champion the development of the “blue” economic growth through Commonwealth Blue Charter. Kenya now joins other co-champions of the blue economy including Belize, Sri Lanka, Vanuatu and Fiji.
Kenya also won support from Commonwealth leaders for its Blue Economy Summit in November, during which it will press the case for greater exploitation of the seas for the benefit of its people.