Kenya’s UK export slack opens door to regional rivals
Kenya’s exports to the United Kingdom (UK) declined in value by 20 percent between 2009 and 2016 pointing to the country’s diminishing export edge to one of its key trade partners.
This is according to the just released UK-Kenya Trade and Investment Relations Report prepared by the Export Promotion Council (EPC) and the Overseas Development Institute (ODI).
Data from the report shows the value of exports to the UK at Ksh440 billion in 2016 compared to Ksh550 billion at the close of 2009 in a slump largely attributed to the lack of diversity in the export produce.
Furthermore, the lack of variety has been worsened by a slump in quality in a matter which has the left the door open for other markets to export similar products to the UK as Kenya.
A look at Kenya’s top 10 exports between 2012 & 2016 for example tells the whole story with coffee exports falling by 7.8 percent as the Ivorian exports for the same soar by 3 folds in a matter of just 5 years.
Similarly, fresh cut carnations, another key item for Kenya fell 16.6 percent as Turkey’s exports for the same rose by 31.8 percent.
Speaking during the launch of the report, lead researcher for the UK Department for International Development (DFID) Dirk Wellem said the emerging markets have been able to eat into Kenya’s market share in the UK by better presenting their produce to the destination market.
“These countries compete on wages like in the case of Ethiopia. Others thrive on better marketing systems such as the Fairtrade coffee in Cote D’Ivoire. In some cases Kenya has been unable to comply with EU maximum residue limit requirements,” he said.
Key players from the trade industry have voiced their concerns over a retreating export capability, making a raft of policy recommendations to confront the matter to include an expansion of the international market access.
The players have called for the adoption of complementary policies to foster international trade even as they target to invest in economic zones and industrial parks in a bid to overcome some of the domestic and international market-access issues.
Trade principal secretary Chris Kiptoo said the government is banking on the implementation of the expected fresh export strategy to improve the depressing export space even as it seeks support from the country’s private sector.
“The export strategy will be a consolidated document which may not cover everything. We will therefore require a number of mini-strategies to replicate the policies alongside players like EPC,” Mr Kiptoo said.
The efficiency of Kenya’s export strategy has until now remained in doubt with the country failing to similarly take advantage of its open trade relationship with the United States under the African Growth and Opportunity Act (AGOA).
The government has however moved to bolster trade relations with its key partners with President Uhuru Kenyatta for instance pitching camp at both the G7 summit and in the UK to engage significant stakeholders.
The unveiling of the new export strategy is set for the end of the month and is expected to address key sector challenges including the slack on exports.