No reprieve yet for exporters to Europe

Exporters to the European Union are expected to foot Sh2 billion in duty over the first three months even after Kenya signed a new trade agreement allowing tax free access to the market.

This follow admission by officials that it will take between three to six months before Kenya is reinstated back to duty free quota.

Ministry of Foreign Affairs Principal Secretary Karanja Kibicho said they hope to impress upon EU to fast-track reinstatement in a bid to minimise anticipated loss.

According to the him, the private sector will pay up to Sh670 million every month in tax from exports.

Having failed to achieve the October 1 deadline, Kenya automatically fell under EU general system of preferences which has duties from five to 22 per cent on exports.

“This has affected up to 87 per cent of Kenya’s exports to the EU mainly agricultural, agro-processed and manufactured products,” Mr Kibicho said.

He said the government is in talks with the EU to cushion exporters from the loss including compensation.

“We have requested to work out the best method to cushion exporters from this loss, it is a process that is going to take a bit of time,” said Mr Kibicho.

Head of the European Union delegation in Nairobi Lodewijk Briet, however, said that this is an unlikely possibility.

“We will continue to look into the question of reimbursement, however since the EAC has missed a number of deadlines, we will no longer be able to help Kenya to stay out of the GSP,” he said.