Kenya should set in motion plans for engaging Britain over post-Brexit trade arrangements to avoid shocks to fresh produce exporters, and likely fall in official development funds, a governments policy think-tank has recommended.
The Kenya Institute for Public Policy Research and Analysis (Kippra), Tuesday said the country will be among those hardest hit when Britain starts renegotiating more than 100 trade deals it has under the 28-member European Union.
Britain’s exit from the EU, Kenya’s second largest export market after the East African Community (EAC), is likely to take a few years, but Kippra wants the government to start putting precautionary measures in place.
Brexit will likely hit exports of tea, flowers and vegetables, and donor funds for infrastructural development projects, largely renewable energy.
“As Britain realigns its engagement with other trading partners, Kenya and EAC need to prepare effectively and adequately to engage Britain for mutually beneficial trade relations,” Kippra argues in the Kenya Economic Report 2017 it launched in Nairobi yesterday.
“The EU development assistance to Kenya and the EAC might fall because Britain significantly contributes towards the European Development Fund.”
- Brexit: UK says zero duty stays for 48 states
- UK supermarkets’ plan upsets Kenyan tea producers
- Britain and EU launch Brexit talks in Brussels
The value of exports to the UK fell 7.45 per cent year-on-year in three months through March to Sh10.06 billion, the latest data from the Kenya National Bureau of Statistics shows, representing 26.67 per cent share of the country’s Sh37.72 billion exports to the EU.
“The impact will depend on how Britain positions itself in terms of bilateral agreements that it will have (after Brexit),” Kippra said.