PM lays ground for free trade

James Momanyi @jamomanyi

The assurance by UK Prime Minister Theresa May that her country will maintain free trade with Kenya even after they exit the European Union (EU) has given Kenya fresh impetus to increase exports between the two countries.

May said yesterday that Britain will be committed to free trade with Kenya after it leaves the EU, and that the current duty free quota for Kenyan exports will continue post Brexit.

“As Britain prepares to leave the EU, we are committed to a smooth transition that ensures continuity in our trading relationship, ensuring Kenya retains its duty- free quota free access to the UK market,” May said.

“We wish to build our strong trade and investment ties to create even more opportunities for our businesses and consumers,” she added.

The UK is Kenya’s second most important export market behind the US and any disruption of the free trade quota would have a huge impact on Kenya agricultural exports such as tea, coffee and horticultural products.

According to the 2018 Economic survey, Kenya scored a favourable balance of trade after it exported Sh38.55 billion worth of goods to the UK last year while it imported goods worth Sh30 billion.

The UK imports around 27 per cent of Kenya’s fresh produce and 56 per cent of tea exports while the country’s bulk of exports to Kenya includes motor vehicles, printed materials, machinery and chemicals.

Kenya exported a total of 133,658.3 tonnes of cut flowers, earning Sh70.8 billion, or 70 per cent of the 2016 horticultural earnings.

UK is also the second largest source market for Kenya’s tourism.  Additionally, there are more than  300 British companies based in Kenya making UK the largest European foreign investor in the country. Significant British investors include Barclays Bank, Standard Chartered Bank, GlaxoSmithKline, Actis (formerly CDC Capital Partners), De La Rue and Unilever.

According to President Uhuru Kenyatta, the free trade quota guaranteed by the UK will expand and deepen trade and investment ties between the two countries.

“We welcome the prime minister’s assurances that the current duty free quota for Kenyan exports will continue after Brexit. We indicated that Kenya will be pressing for an increase in exports on the basis of a fair market arrangement with a view of a mutual win-win arrangement,” said President Uhuru Kenyatta.

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