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Kenya, Brazil trade pact to boost economic ties

By | Published Wed, July 7th 2010 at 00:00, Updated Wed, July 7th 2010 at 00:00 GMT +3

By Athman Amran and Patrick Githinji

Brazil, the world's eighth largest economy has signed six bilateral agreement with Kenya to boost trade, investments and economic ties between the two countries.

President Kibaki and his Brazilian counterpart Luiz Inacio Lula da Silva witnessed the signing of the agreement that seeks to explore investment opportunities in agriculture, manufacturing, energy, ICT, exploration of natural resources and housing.

The agreements also included a pact on cooperation in energy, education and performance of remunerated services activities by dependants of diplomatic, consular, military, administrative and technical staff.

The two countries also signed memoranda of understanding on trade and investment promotion, and on cooperation between Foreign Service Institute of Kenya’s Ministry of Foreign Affairs and Brazil’s Rio Branco Institute of the Ministry of External Relations.

Addressing a business meeting at a separate function, President Luiz Inacio Lula Da Silva disclosed that his country was keen to access the East African Community (EAC) economic bloc, by partnering with Kenya.

"By signing several joint ventures with Kenya, we will be able to sell our products into the EAC region," said President Lula Da Silva.

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Attractive market

The EAC is also poised to benefit from links with Brazil, which is considered naturally attractive market for any international company due to the size of its population and its high consumer potential.

"Kenya is keen to exploit Brazilian advances in the area of bio-diesel technology. Brazil is a world leader in this field and Kenya stands to gain as we seek ways of becoming more efficient in our management of the energy sector," said Kibaki.

Available figures indicate that Kenya’s exports to Brazil are a paltry Sh81 million compared to imports of Sh4.9 billion, the balance of trade heavily in favour of Brazil.

"Brazil has continued to invest in Africa and is looking forward to increased investment in Kenya," said Brazilian Vice Minister of Development, Industry and Trade Mr Ivan Ramalho when he earlier met Trade Minister Amos Kimunya.

Africa’s exports to Brazil rose to $18.5 billion in 2008, compared with $3 billion in 2000, a big leap in which Kenya hopes to bag a bigger slice.

While Brazil will have access to the EAC market, with a population of 130 million, Kenya is expected to take this opportunity to increase its exports to the Latin American market.

More opportunities

Brazil is also keen to exploit opportunities in vehicle assembling, energy, infrastructure, construction, agriculture and telecommunication in order to consolidate its trade flows with the EAC region.

"This meeting is timely since the local business community will obtain business information and investment opportunities available in Brazil," Trade Minister Amos Kimunya told the 20-member Brazilian delegation.

Delegates from both countries are studying business opportunities available with a view to narrowing market gaps and forging close links.

"These discussions will further be strengthened through a ‘Kenyan Week’ in Brazil and a ‘Brazil Week in Kenya later in the year," said Kimunya. 

He urged Brazil to import horticultural products from Kenya, renowned the world over for their high quality.

Ramalho said his country will consider exporting agricultural tractors and digital TV gadgets as a way of expanding business linkages with Kenya.

Brazil has so far forged several business ties with India and several Arab and Caribbean countries.

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