Market access boosts Kenya ranking

Delegates during at recent Comesa conference on trade in Nairobi. PHOTO | FILE
Delegates during at recent Comesa conference on trade in Nairobi. PHOTO | FILE 

Improving access by local business to markets in neighbouring countries has pushed Kenya to be ranked the second best regionally integrated in Africa after South Africa in the third edition of Visa Africa Integrated Index.

The survey of 11 African countries aims to show the extent to which countries on the continent are taking advantage of regional groupings to trade and link economically with other members.

Kenya now sells at least 35 per cent of its exports within the East African Community (EAC).

“The breadth of the country’s economic relationships with its neighbours is far stronger than its breadth with the rest of the world,” said Jabu Basopo, general manager for Visa in East and southern Africa.

Kenya’s score has risen consistently over the period of the survey resulting in achieving the highest score in the region, having moved further ahead of the other three East African countries in the period since the first report.

“The African economy is currently enjoying its 16th consecutive year of best growth period on record. Since 2000, the continent has maintained annual economic growth averaging in excess of five per cent.

This has enabled the African economy to outperform the global average by more than two per cent per annum since the turn of the millennium,” said Mr Basopo.

The index looks at areas where Africa is growing rapidly and integrating with the rest of the world. Integration of an economy becomes deep and broad if a highly connected economy is engaged with a wide variety of counter parties across the different strands of its global relationship, explains the index.

Currently, more than one third of Kenya’s global merchandise trade is represented by three products — tea, cut fresh flowers and raw coffee. These trade flows are dominated by three countries: the US, the UK and the Netherlands.

Kenyan exporters are faced with a difficult situation in their quest to trade with Europe after its East African Community partners refused to conclude the Economic Partnership Agreement (EPA) with the European Union (EU) in spite of the fast-approaching deadline.

Tanzania recently said it would not sign the EPA with the European Union citing Britain’s vote to exit from the economic bloc. Uganda has said it is still reviewing the terms.

According to EPA terms, the EU could only strike a trade deal with a bloc comprising several nations, meaning a single country cannot go it alone. This has left Kenya and Rwanda as the only ones willing to sign up.

Failure to reach a deal may spell doom to thousands of workers involved in cut flowers, fruits, fish, beans, coffee and tea which are mainly exported to the EU.

This also poses the challenge of regional and global integration Kenya.