Exporters and business professionals in Kenya are being encouraged to fully exploit the opportunities presented by the newly formalized Kenya-European Union Economic Partnership Agreement (EPA). This landmark trade deal is expected to significantly enhance Kenya’s trade and investment ties with the European Union (EU), foster economic diversification, boost competitiveness, and attract substantial investments.

Strengthening Trade and Investment

During a sensitization forum in Mombasa, James Gakuyu, Chairperson of the National Assembly Committee on Trade, Industry, and Cooperatives, highlighted the EPA’s potential to create transformative economic opportunities. According to Gakuyu, who is also the Embakasi North Member of Parliament, the EPA provides a duty-free and quota-free platform for Kenyan exports, offering a competitive edge in the European market.

“This is the most ambitious trade deal signed by the EU with a developing country in terms of sustainability, climate action, labor rights, and gender equality provisions,” Gakuyu remarked. He emphasized that the agreement aligns with Kenya’s long-term goals of job creation and economic development.

Regional Benefits

Coastal counties in Kenya are poised to reap substantial benefits from the EPA. Products such as minerals, horticultural produce, and seafood from the region are expected to gain greater access to European markets. Gakuyu further noted that the agreement ensures inclusivity across all counties, creating a uniform economic boost nationwide.

The agreement’s potential to address gaps left by other trade frameworks, such as the soon-expiring African Growth and Opportunity Act (AGOA), was also discussed. AGOA has been underutilized, with Kenya tapping only 10–11% of its potential benefits, largely in apparel, textiles, and minerals.

Government and Institutional Support

To maximize the EPA’s benefits, Kenyan agencies such as the Kenya Export Promotion and Branding Agency (KEPROBA) and the Kenya Investment Authority (KENINVEST) are stepping up efforts. KEPROBA is tasked with branding and marketing Kenyan products internationally, while KENINVEST focuses on attracting foreign investors and educating them about the bilateral agreement’s advantages.

County aggregation centers have also been established to streamline the sourcing of agricultural products from farmers. These centers provide a direct linkage between producers and investors, enabling farmers to gain better market access and fairer prices.

Gakuyu urged the government to ensure that these agencies are adequately funded to sustain their operations and meet the objectives of the EPA.

Opportunities for Exporters

Robert Gichimu, Member of Parliament for Gichugu Constituency, emphasized the importance of sensitization forums. He urged Kenyans to capitalize on the EPA’s provisions, which offer duty-free and quota-free access to the EU market.

“This agreement is an economic lifeline. It is critical for Kenyans to understand and meet the standards required by European markets to fully realize the benefits of this partnership,” Gichimu said. He called on the EU to organize capacity-building initiatives to guide exporters in adhering to international standards.

EU’s Perspective

The EU sees Kenya as a pivotal trade partner in Africa. Filippo Amato, the First Counsellor and Head of Trade Section at the EU delegation in Kenya, highlighted that Europe remains Kenya’s largest export destination. In 2023 alone, Kenya exported goods worth €1.2 billion (approximately KSh 184 billion) to the EU, including flowers, vegetables, and coffee.

Amato explained that the EPA guarantees long-term market access for Kenyan goods, fostering predictability and stability for exporters and investors. Over the next 25 years, Kenya will gradually lower its duties on EU imports, allowing local industries sufficient time to adjust and build capacity.

“The agreement’s sustainability provisions will not only improve market access but also ensure that Kenyan exports meet EU standards while reducing production costs,” Amato added. He noted ongoing efforts to train Kenyan exporters on compliance with EU regulations.

Expanding Export Horizons

Kenya’s horticulture, coffee, and tea industries stand to benefit immensely from the EPA. Industry leaders are already exploring ways to diversify their offerings to align with European consumer demands. Emerging sectors such as green energy solutions, organic produce, and processed foods are also being positioned to tap into the European market.

The EPA opens the door for Kenyan exporters to move beyond traditional commodities and explore higher-value goods and services. This aligns with Kenya’s Vision 2030, which aims to transform the country into an industrialized, middle-income economy.

Challenges and Recommendations

While the EPA offers immense potential, exporters face challenges such as stringent quality standards, inadequate infrastructure, and limited awareness of the agreement’s provisions. Addressing these challenges will require concerted efforts from both the government and private sector.

Key recommendations include:

• Capacity Building: Organize workshops and training programs to educate exporters on compliance with EU standards.
• Infrastructure Development: Invest in transportation and storage facilities to ensure timely delivery of quality products.
• Market Diversification: Encourage exporters to explore niche markets in Europe, such as organic and Fair Trade-certified products.

Conclusion

The Kenya-EU Economic Partnership Agreement marks a new chapter in Kenya’s trade relations, offering unprecedented opportunities for growth and development. By leveraging the agreement’s benefits and addressing its challenges, Kenya can solidify its position as a leading exporter to Europe while fostering economic prosperity for its citizens.

As Kenya embarks on this journey, the collaboration between government, businesses, and international partners will be critical in realizing the full potential of this historic trade agreement.

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photo source: Google

By: Montel Kamau

Serrari Financial Analyst

22nd November, 2024