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UK gains upper hand in balance of trade with Kenya

The Economic Survey 2013 attributes fall  in Kenya’s exports to the UK to a  drop in tea shipped to that country. FILE
The Economic Survey 2013 attributes fall in Kenya’s exports to the UK to a drop in tea shipped to that country. FILE  NATION MEDIA GROUP

Kenya’s exports to Britain have dropped by four per cent in the 12 months to July, further widening a trade imbalance that shifted last year in favour of the UK.

Data from the Kenya National Bureau of Statistics (KNBS) shows that Kenya’s exports to Britain dropped to Sh22.3 billion in 12 months to July, while imports from its former colonial master went up to Sh29.7 billion from Sh26 billion over a similar period last year.

Kenya mainly exports agricultural goods to Britain.

Chief executive of the fresh produce exporters association, Stephen Mbithi said the drop in exports to the UK was partly attributable to denied entry of agricultural products by the British authority due to pesticide use restrictions.

“UK is by far the strictest one of all European Union countries, hence the decline,” said Mr Mbithi.

The Economic Survey report for 2013 notes that exports to the UK dropped by Sh7 billion “mainly due to a drop in tea exports from Sh17.4 billion to Sh13.8 billion during the review period.”

The drop in exports saw Britain displaced by Tanzania as the second biggest buyer of Kenyan goods. Uganda is Kenya’s biggest export destination.

Last year was also the first time since 2007 that Kenyans bought more from Britain than they sold to them, as China and India have emerged as the biggest sources for Kenyan imports in this period.

Following health concerns, European countries have introduced new rules on pesticides that are said to cause cancer.

Britain has gone on a charm offensive since publicly expressing its unease with election of President Uhuru Kenyatta and his deputy William Ruto, who are facing charges for crimes against humanity at the Hague-based International Criminal Court (ICC).

British high commissioner to Kenya Christian Turner has announced a target of doubling trade between the two countries in the next five years.

The drop in Kenya’s exports to the UK could further be accelerated if Britain’s plan to ban importation of miraa is implemented.  UK is the largest international market for the stimulant following a ban by the Netherlands, US and Canada. It is estimated that it takes up 30 tonnes of miraa from Kenya weekly.

Britain-based retailers have in recent months sought to deepen trade ties with Kenyan producers.

In September British retailer Marks & Spencer (M&S) announced plans to step up import of Kenyan produce for sale in its stores, pointing to brighter prospects for thousands of farmers and entrepreneurs who supply goods to the UK chain. The London-based department store bought Kenyan goods such as cut flowers, vegetables, tea and coffee worth Sh13.8 billion last year.

UK shoe retailer Clarks Footwear has opened an outlet at the Thika Road Mall as it seeks to push its products to the country’s growing middle class.

“UK trade and investment in Nairobi has helped more than 100 British companies to access the market in 2011 and 2012, and supported many others in exporting to Kenya and buying goods from Kenya,” reads a statement on the website of the British High Commission to Kenya.

Trade relations between Kenya and the UK have been discussed severally in the UK House of Commons, with the British legislature terming Kenya as being “strategically important.” Kenya hosts several Britain companies and citizens given their deep historical ties. Last year, UK firms with significant stakes in Nairobi bourse-listed companies shipped out more than Sh20 billion in dividends.

Tourism

A strategic decision by the Kibaki administration to look East for trade ties has seen Britain’s influence in the country on the wane.

However, the trade with China and India, whom the government now favours, is skewed greatly against Kenya with the two importing little from the country. Kenya is also heavily-reliant on Britain for its multi-billion- shilling tourism industry.

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