Burundi's isolation by EU over tyranny poses trade risk for Kenya's exporters

Among the top exports to the EU from Kenya are cut flowers, coffee and tea. In the unfolding situation, the same exports from the neighbouring countries will become much cheaper, edging out the Kenyan produce on competitiveness.

Flower exports alone could attract Sh600 million in taxes in a single month, translating to over Sh7.2 billion a year. The impact is much bigger when all products are evaluated. Ms Arena said there was no chance of a deal before the October 1 deadline, suggesting that Kenyan exports will inadvertently be heavily exposed but there was a slim chance of a lifeline.

“We have asked the EU Commission for an extension from October 1 because we see this punishing Kenya for a decision that is beyond its doing,” she added. There, however, was no guarantee that the EU would grant the extension in the requisite timelines, if ever.

On the flipside, Burundi and the three other EAC countries, all ranked as Least Developed, produce all the major agricultural commodities which Kenya exports to the EU. Already, Deputy President William Ruto has led a high level negotiating team to Bujumbura, in what is now emerging as mission impossible of talking Nkurunziza into democracy.

The Burundian leader has shown determination to stay on considering the bloody chaos that followed his contested bid and eventual win in a third term in elections largely boycotted by the opposition. Nkurunziza was sworn in to office in August of last year, and has since been focused on crushing voices that do not tow his government’s line. Frantic attempts to intervene and dissuade him from the decision by the international community have fallen flat.

Kenya has a tiny window to renegotiate with the EU for a totally new trade pact whose timelines are unknown. Even worse, the conditions for the reviewed agreement are much tougher, including a requirement of evidence that Kenya is committed to and was working towards achieving the Sustainable Development Goals — a list of 17 elaborate measures, elimination of child labour from all production and other strenuous demands along the supply chain.

Those demands are part of the 25 requirement before the EU agrees to enter an agreement under the Generalised System of Preferences (GSP) Plus.

Least developed

Bernd Lange, the chairman of the EU Parliamentary Group who was flanking Ms Arena at the United Nations Conference on Trade and Development meeting in Nairobi,  said there is not much of space for Kenya to avert taxes on its exports.

“There is really not much we can do for Kenya,” Mr Lange said, adding that the Parliament had no control of the decision-making by the Commission.

EAC countries negotiated jointly for the troubled EPA, which had however meant little to all members except Kenya whose status has been reviewed from a least developed nation to a lower middle income State.