Government and private sector players are working on diversifying export products in an effort to maximize on the Kenya-European Union (EU) Economic Partnership Agreement (EPA) and grow the economy by increasing foreign exchange earnings.
State Department for Trade Principal Secretary (PS), Alfred K’ombudo, said that Kenya and the European Union (EU) share strong trade ties, with the EU being one of Kenya’s largest trading partners.
The PS explained that the EU is a USD 16 trillion market, absorbing on average 21.1 percent of Kenya’s total exports annually.
K’ombudo said that in 2023, Kenya exported to the EU goods valued at USD 1.07 billion against imports of USD 1.6 billion, indicating that the country is nearly closing the gap in the balance of trade.
K’ombudo was speaking on Thursday during a sensitization workshop on the Kenya–EU Economic Partnership Agreement (EPA) and said that Kenya’s exports to the EU consist largely of agricultural commodities such as cut flowers, coffee, tea, and spices, edible fruits, and nuts, among others.
“Kenya’s imports from the EU comprise mainly capital equipment and intermediate inputs into Kenya’s productive sectors. These include machinery and mechanical appliances, pharmaceutical products, electrical machinery, motor vehicles, paperboards, and paper pulp, among others,” said K’ombudo.
He explained that Kenya and the EU signed the Kenya–EU Economic Partnership Agreement on 18th December 2023 and Kenya ratified the EPA on 24th April 2024, with the agreement entering into force on 1st July 2024.
The agreement provides Kenyan products with duty-free and quota-free access to the EU market in alignment with the market requirements.
In an effort to promote export product diversification and assist Kenyans in accessing the EU market, K’ombudo said that the State Department for Trade has partnered with the EU, Danish Industry (DI), Kenya Association of Manufacturers (KAM), and other BMOs to undertake sensitization campaigns on the Kenya-EU EPA across selected regions and counties.
“The aim of these sensitization workshops is to increase awareness and understanding of the benefits and opportunities presented by the Kenya-EU Economic Partnership Agreement (EPA). So far, we have successfully completed seven sensitization workshops across selected regions and counties, including Nakuru, Kirinyaga, Eldoret, Machakos, Isiolo, Mombasa, and Kisumu,” said K’ombudo.
He added that they are currently in the process of developing a National Kenya-EU EPA implementation strategy. This strategy is imperative towards realizing the full benefits from the trade opportunities offered by the Kenya-EU EPA.
“The strategy is expected to identify market access priorities, specific interventions, required financial and non-financial support by the EU, implementation responsibilities, and timelines,” he said.
K’ombudo said that the EU-27 countries offer a huge potential market for exports, particularly of agricultural commodities, manufactured products, fisheries, livestock, and animal products, and counties are expected to take advantage of this opportunity by initiating programs that expose county trade sectors to the EU market.
EU Ambassador to Kenya, Henriette Geiger, said that Kenya has the aspiration to become an upper middle-income country, and only exporting raw products will not help in achieving this goal.
“Kenya needs to add value to its agricultural products as well as focus on other high-value sectors such as the creative industry, which is one of the fastest-growing sectors in Kenya, together with the digital sector, which is capitalizing on the young and thriving population,” said Geiger.
She highlighted Kenya’s median age of 19 years, adding they are digitally savvy and there is a need to help them access digital jobs.
Geiger said that in the future they are looking at having a services agreement between the EU and Kenya, which is of key interest for Kenya to grow its economy, seeing that one million youths are joining the job market annually, which is a key issue that the EU wants to help in addressing by providing job opportunities.
“We also have a sustainable trade chapter, and it is very important for the EU to have climate-friendly production and transportation, and we are working on that in efforts to have decent jobs and promote women,” said Geiger.
By Joseph Ng’ang’a