Kenyan firms will be given a 12 year period to expand their businesses and match with British partners after the UK-Kenya Economic Partnership Agreement (EPA) takes shape.
The two countries are negotiating a trade deal that will see the UK export goods to Kenya duty-free for 25 years, according to documents presented to Parliament by Trade CS, Betty Maina.
The deal will only apply to goods which attract 25 percent duty or are part of the 2.6 percent of total imports to Kenya or East Africa.
The duty levies will be removed after 12 years from the date of contract signing between the two countries and will take place gradually over the following 13 years.
Kenyan firms were thus given a grace period to adjust to the trade deal - with the Ministry saying that it would lay down strategies that would be considered prior to the deal commencing.
"Requisite capacity and trade defence measures have been anticipated in the EAC-UK deal for use to mitigate any negative effects to local industries producing similar intermediate products," the deal stipulates.
CS Maina assured that the partial reduction of tariffs will have a minimal negative impact on Kenya and her neighbours
Under the deal, agricultural and industrial goods will be excluded from the pact as the government seeks to continue protecting local producers who will not benefit from cost advantages.
The agreement is expected to create over 4 million jobs for Kenyan youths and women working in the agricultural sector as local goods influx into the UK will boost their markets and incomes.
Trade CS Maina added that the profits will promote industrial development in Kenya.
“Kenya is offering to open 82.6 percent of the value of total trade to the UK over an extended transition period constituting only raw materials, capital goods, intermediate products, and all other goods," Maina said.
The two countries exchange products worth Ksh 200 billion in a year. The trade was, however, disrupted during the Covid-19 crisis after all countries closed their airspace. President Uhuru Kenyatta hopes that the agreement will boost Kenya's economic recovery efforts.
