Kenya has secured a boost in its trade relationship with the United Kingdom, following a newly brokered deal that promises to enhance the country's export revenue while reducing costs for Kenyan importers.
This fresh agreement, confirmed by Cabinet Secretary for Mining, Blue Economy, and Maritime Affairs, Salim Mvurya, signals a strengthening of ties between the two nations, especially in the agricultural and manufacturing sectors.
Speaking on Tuesday, 3rd September, CS Mvurya announced that the UK government had agreed to lower the inspection rate for peas exported from Kenya by 5 per cent, a move expected to facilitate smoother trade and increase the competitiveness of Kenyan produce in the UK market.
"This decision reflects the confidence the UK has in Kenya's improved management of pesticide residues, which has significantly impacted the sampling process," Mvurya noted.
The reduction in inspection rates is a major win for Kenya's agricultural sector, which sends approximately 350 tonnes of vegetables and cut flowers to the UK every night. Peas, beans, and other leguminous vegetables form the largest proportion of these exports, and this deal is poised to further stimulate growth in this thriving sector.
Moreover, the agreement extends beyond agriculture. The UK has also committed to slashing the tariff on whiskies originating from the UK by 10 per cent, bringing the rate down to 25 per cent. This adjustment aligns with the Economic Partnership Agreement (EPA) and demonstrates the UK's willingness to review its trade terms to accommodate the growing economic relationship with Kenya.
Mvurya emphasised that this move is part of Kenya's broader strategy to renegotiate tariffs that have posed challenges in implementing the Common External Tariff (CET) within the East African Community (EAC).
“We reaffirmed our commitment to the ongoing implementation of the Kenya-UK Economic Partnership Agreement, a significant step that will enhance bilateral trade and diversify exports into new global value chains,” CS Mvurya stated.
The Economic Partnership Agreement, initially signed in December 2020, was ratified in March 2021, ensuring that Kenyan businesses, alongside British companies operating in Kenya, continue to enjoy duty-free access to the UK market.
This arrangement has already proven beneficial, saving Kenyan exporters over £10 million about Ksh1.689 billion in the current exchange rates annually in duties on key products like green beans and cut flowers. In return, Kenya has agreed to gradually reduce duties on UK products deemed non-sensitive, including machinery and pharmaceuticals, to support agricultural development and manufacturing in the country.
According to the Observatory of Economic Complexity (OEC), Kenya imported whiskies valued at Ksh3.85 billion from the UK in 2021. The recent reduction in tariffs is expected to encourage further trade in this sector, benefitting both UK exporters and Kenyan consumers.
Accompanying CS Mvurya during the announcement were Trade Principal Secretary Alfred K’Ombudo, Industry Principal Secretary Dr. Juma Mukhwana, and Investment Promotion Authority CEO Abubakar Hassan.
