Ruto pushes for trade deal with EU as firms scout for business

Kenya is pushing for the conclusion of negotiations with the European Union (EU) that would increase the number of products that local businesses can export to the bloc.

President William Ruto on Tuesday urged the EU to conclude the economic partnership agreement (EPA) with Kenya, which he noted would increase the country's export base while also offering more employment opportunities to its citizens.

Negotiations between the EU and the East African Community (EAC) have been going on for years but have encountered hiccups, including the classification of Kenya as a middle-income country while the other EAC partner States are grouped as Least Developed Countries (LDC).

The EPA provides for duty-free-quota-free access for Kenyan and EAC products to the EU market.

The delay in signing the EPA has meant that many Kenyan goods cannot access the EU market while its neighbours in EAC can get more of their products to the market, owing to the LDC status.

"It is also important that the EU undertake a fresh push to conclude EPA with EAC. I am really looking forward to this being concluded so that we can even up the scales," said President Ruto during the EU-Kenya Business Forum, a two-day event bringing together over 500 businesses from the EU and Kenya.

He said access to the EU market would enable Kenya to expand its export base, thereby multiplying employment opportunities and strengthening its balance of trade.

"It is one of the notable interventions that can make a tremendous difference to our economic performance and there is an excellent reason in the EU's best interests to conclude this deal."

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Ruto said the EPA would also be beneficial for EU business, noting that for "the EU Business Council, doing business with Kenya is strategic and highly beneficial in every way".

Kenya exported goods worth Sh115.8 billion to the EU in 2021, lower than the Sh133 billion sold in 2019 before Covid-19.

Key exports to the EU include tea, coffee, cut flowers and vegetables with 70 per cent of flowers produced in Kenya exported to the EU. Trade is, however, in favour of the EU with Kenyan imports from the European bloc at Sh227.9 billion in 2021.

Ruto noted that numerous barriers had been working against Kenya's quest to increase exports to the EU. "These benefits and opportunities are curtailed by barriers faced by our agricultural exports to the EU," he said.

"They are subjected to product and market-specific restriction as well as onerous phytosanitary standards compounding infrastructure-related challenges like difficulties with flight and low technological capacity that hinder productivity.

He said continued consultations and collaboration would unlock these barriers and smoothen the path for stronger trade relations and investment opportunities.

Cabinet Secretary for Investments, Trade and Industry Moses Kuria said both Kenya and the EU would put in more efforts to ensure that "by March 31, we must conclude our EPA".

Kuria also pitched Kenya as a gateway to Africa, saying the country has made significant progress in bringing together three economic blocs as a step towards actualising the Africa Continental Free Trade Area (AfCFTA).

Kenya has recently tried to bring together EAC, the Southern Africa Development Community (SADC) and the Common Market for Eastern and Southern Africa (Comesa) to work as one bloc with an eye on getting other blocs in the West and North Africa to work in a similar manner with an on achieving the Africa wide free trade area.

"The journey towards FTA is going well but having a modular, step-by-step approach will fast-track the process. That is why we have been keen on the tripartite agreement between these three blocks," Kuria said.

"We are also encouraging countries from the west and the north to take similar measures so that we can fast-track measures towards AfCFTA."

The tripartite African bloc is made up of 28 countries with a population of 750 million people and their economies having a combined gross domestic product of $1.8 trillion (Sh227 trillion).

Ruto said there are expectations of having an EAC, SADC and Comesa sign an agreement by April. "By end of April, we will have the tripartite agreement in place and the 28 countries will be working as one bloc. It is a great opportunity that as the EU looks at Kenya, you are also looking at the countries within this bloc."

Among the deals signed at the forum included a trade finance facility of $200 million (Sh25 billion) by the European Investment Bank (EIB), through its development finance arm EIB Global, to the Eastern and Southern African Trade and Development Bank.