The ratification of the UK-Kenya Export Partnership Agreement that came into force last week after parliaments of the two trading partners passed the necessary regulations is a big win for the agriculture industry.
It has been a year of anxiety and intense negotiations in which the Agriculture Sector Network (ASNET) gave its submissions considering Kenya’s leading exports to the UK are agricultural produce which include tea, fresh produce, coffee, honey and oils extracted from plants growing in semi-arid areas.
The long-awaited tarde pact, allows Kenya’s goods to enter UK duty and quota-free, essentially removing duties of between 8 and 12 percent on the various export items.
The UK is Kenya’s second largest export destination while the European nation is the leading foreign investor in East Africa’s largest economy. It is important to note that 27 per cent of the fresh produce sold in the UK supermarkets originates from Kenya, that is also the source of 56 per cent of all black teas consumed and re-exported from London. This makes the UK a critical market for Kenya produce in general and specifically the agriculture sector that is the mainstay of Kenya’s economy accounting for 25 per cent of GDP and 60 per cent of employment through the various value chains.
The commodities we sell to the UK- tea, horticulture, coffee happen to be Kenya’s leading export earnings, contributing substantially to the balance of trade despite the tilt favouring the UK. In 2019, for example, Kenya imported good worth $534 million and earned $447 Million from the UK.
The UK-Kenya trade agreement is significant to agriculture considering a critical decision made last year at the height of the first wave of the Corvid-19 Pandemic. ASNET, together with the Kenya Private Sector Alliance, and the Kenya Flower Council, airlifted flowers to London with a message of hope from President Uhuru Kenyatta titled : With Love From Kenya. Dubbed the Caravan of Hope, the UK was picked because it is the second largest market for Kenya flowers after the Netherlands auctions. The flower airlifts sort to extend a goodwill gesture there, leading to retention of existing customers by staging the presence of our flowers at a most difficult and unexpected moment.
It is safe to conclude that the gesture didn’t go unnoticed, It was intended make buyers stay tuned to our products. And they did.
The signing of the trade pact may not have been directly infuenced by the flowers Caravan but there is a remote possibility it touched some button. The agreement means the valued Kenya produce can reach the consumer at competitive pricing. Our cost of doing business is high and import duty at the end market was going to push the price higher giving our competition an advantage. At a time the world is reeling under the pressure of depressed economies and reduced spending due to Covid-19 deadly mutations, at least we have something to smile about and an impetus to work harder at our farms.
Do a more indepth report of the real impact on the sector.