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Good news as Prime Minister May promises retention of duty-free status for some Kenyan goods

By Obar Mark | Published Thu, August 30th 2018 at 21:22, Updated August 30th 2018 at 21:28 GMT +3
Kenya's horticulture exports. [Courtesy]

There is a broad consensus in economic circles that Brexit will most likely reduce the United Kingdom's real per-capita income levels.

In the wake of sweeping changes in European economies, Brexit critics fear invocation of new tariffs, essentially, those that are effectively implementable on imported items from Britain.

Kenyans were particularly interested in knowing how UK Prime Minister May's visit was going to change trade relations as well as the dynamics of the country's economy. Good news, she had for them.

"As Britain prepares to leave the European Union we are committed to a smooth transition that ensures continuity in our trading relationship with Kenya, ensuring Kenya retains its duty-free, quota-free access to the UK market. And to building on our strong trade and investment ties to create even more opportunities for our businesses and for our consumers," said British PM Theresa during her one-day visit to Kenya on Thursday.

Previous trade agreements with Britain have enabled Kenyans to export some goods to the Kingdom without facing the harsh reality of taxation.

According to the Kenya Revenue Authority, "goods for use by the British Council, which are or will be a charge against the funds of the Council, not including goods for resale or for the personal use of the staff of the Council," are exempted from payment of duty to United Kingdom.

President Uhuru Kenyatta welcomed her assurance that Kenyan duty free exports would continue after Brexit and said Kenya will be pressing for an increase in exports.

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"We are not going out there with a begging bowl. But to partner with those who are willing to come along with us," said President Kenyatta. He added: "Kenya has an attractive business and trade environment for both local and foreign investments."

 Because of Brexit, Britain is staring at stiff competition coupled with a liberal dose of new economic hurdles as a result of the divorce that is promising to be noisy, messy and full of casualties. 

Conversely, Britain as well as other free market nations are jostling for a string of relations that will define new world economic order. While Britain remains as one of Africa's major trade partners, the USD 3 trillion Gross Domestic Product-nation has also been accused of being a member of world's protectionist club. Prime Minister Theresa May is being seen as working hard to change that very notion.

The newly-signed agreements with British Prime Minister simply means that Kenya's duty free market has exponentially expanded as the country is in the verge of losing privileges accorded to exporters by European Union's arrangement for a group of nations known as Least Developed Countries (LDCs.)

Kenya is no longer categorised as a member of LDC whose membership includes 33 African countries – with "very low-income and severe structural impediments to sustainable development".

The Least Developed Countries have duty-free access for their goods to the EU under an initiative known as Everything but Arms (EBA).

The balance of trade between the two nations is currently in favour of Kenya whose exports to the UK in 2017 were estimated to be worth Sh38 billion, while UK exported to Kenya goods worth Sh27.3 billion during the same period.

May visited Kenya 30 years after Prime Minister Margaret Thatcher’s visit. Nairobi was her last stop tour after South Africa and Nigeria.

Accompanying her were UK's business moguls who were ready to strike new deals with Kenyan government as well as business community. On arrival, she said: "I am proud to be leading this ambitious trip to Africa and to become the first UK Prime Minister in over 30 years to visit Kenya." 


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