Ensure Kenya-UK trade pact benefits SMEs

Since the 2017 stalemate on the talks to establish the Economic Partnership Agreements (EPA) between the East African Community (EAC) and the European Union, Kenyan traders have been eagerly waiting for a new deal to get their goods into the market.

Tuesday’s news of a new deal between Kenya and the United Kingdom valued at Sh200 billion could very well be the silver lining that jump-starts trade between both economies and potentially the wider East African region.

Data from the Kenya National Bureau of Statistics indicates that Kenyan exports to the UK have remained stagnant in the last five years, averaging Sh39 billion annually. This is a poor showing for one of Kenya’s most outspoken allies and compared to other countries. In the same period for example, Kenyan exports to China almost doubled, while those to the Middle East have gone up 44 per cent.

The government and private sector representatives should work to ensure Small and Medium Enterprises (SMEs) in Kenya also enjoy the benefits from the trade agreement signed earlier this week.

Coming in the wake of a devastating pandemic that has seen businesses closed and jobs lost, facilitating the participation of SMEs in the export trade could be a major boost as companies navigate an uncertain recovery in the New Year.

It would also provide Kenya the opportunity to expand its catalogue of goods and services sent to the British and European markets outside the traditional class of exports.
In the African Growth and Opportunities Act, Kenya’s duty-free trade pact with the US that lapses in 2025, Kenyan exporters barely manage to cover 10 per cent of the 600 classes of export the country has been allocated. This should not be the case with the new trade pact between Nairobi and London.