Kenya has failed to set goals and develop a mechanism to measure the progress of the protracted trade talks with the European Union, United Arabs Emirates and Indonesia, which has denied the country opportunities abroad, Parliament has found.
The Departmental Committee on Trade, Industrialisation and Cooperatives of the National Assembly has fallen short of blaming the slow progress in reaching binding preferential trade deals with the EU bloc, UAE and Indonesia on a lack of quantifiable indicators to measure progress.
“The Committee observed that there were no key performance indicators and targets for these negotiations,” the legislators wrote in a report following engagement with the Trade Department on budgetary allocation for the year starting July.
Kenyan goods access the 27-member Eurozone duty- and quota-free on an interim deal reached in 2016 after Nairobi failed to convince Tanzania, Uganda and Burundi to sign the Economic Partnership Agreement (EPA) it had successfully negotiated with the EU two years earlier.
Rwanda signed the deal which Kenya negotiated and concluded on behalf of the now seven-country East African Community bloc in October 2014 but failed to ratify it into its laws.
Tanzania and Uganda have not endorsed the EAC-EU EPA for various economic and political interests, prompting the EAC heads of State summit in March 2021 to allow individual countries to engage the EU under the “principle of variable geometry”.
This is unlike the past when all EAC member States were required to sign and ratify the EPA with the EU for it to come into force.
The Trade Ministry is also yet to conclude a preferential Economic Partnership Agreement with oil-rich UAE which is largely regarded as a key gateway for global trade and investment through its commercial hub, Dubai.
Dubai has long been regarded as the gateway of trade between Kenya and the rest of the world.
Kenya imports oil, broadcast equipment and plastic while exporting tea, cut flowers, fruit, and sheep and goat meat.
But the relationship between the two countries has been marked by a huge trade imbalance in favour of the UAE.
Kenya has since 2017 been exploring a preferential trade deal with Indonesia, the world’s fourth most populous country, which saw Trade Cabinet Secretary Moses Kuria lead a delegation to a three-day benchmarking visit to Jakarta from May 8 to 11.
“The committee recommends that by the end of FY 2023/24 [June 2024], the State Department should submit to the National Assembly a comprehensive report on the progress of the ongoing trade negotiations with the United Arabs Emirates, the European Union and Indonesia to the National Assembly,” the committee recommended in its report.
“This is to ensure that there is transparency and accountability.”
Kenya has been looking to narrow the trade imbalance with UAE with imports last year hitting Sh407.4 billion against export earnings of Sh44.02 billion.
UAE— which has successfully ploughed oil wealth into other sectors from tourism to real estate — has been keen on doubling non-oil trade and investments with Kenya.
Non-oil imports from UAE, particularly Dubai, include electrical and electronic equipment as well as plastics.
The populous Indonesia, Kenya’s top source of palm oil, is seen as a potential market for livestock, coffee and tea.
Huge imbalance
The East Asian country exported goods worth Sh27.1 billion to Kenya while importing merchandise worth a measly Sh1.1 billion, reflecting a gaping imbalance.
“We discussed the opportunity for Kenya to access the 700,000 cattle per year import market to Indonesia. We agreed to hasten approval protocols that will enable the first shipment of 20,000 herds by August 2023,” Mr Kuria said following a meeting with Indonesian Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan.
A statement released by the Trade Ministry following the visit added: “The ministers agreed on the establishment of a robust monitoring and evaluation framework to ensure the effective implementation of the agreed plans and ideas. They emphasised the importance of regular assessment and feedback mechanisms to measure progress and address any challenges that may arise.”
