UK-Africa Summit could bridge trade gap

Saturday January 25 2020

Kenyan President Uhuru Kenyatta

Kenyan President Uhuru Kenyatta attended a UK-Africa Investment Summit reception at Buckingham Palace. PHOTO | PSCU 

ALEX TCHAI
By ALEX TCHAI
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Kenya stands to gain considerably from the UK-Africa Summit both financially and in development projects.

On matters trade, it may go some way to close the negative trade balance between Kenya and the UK. In 2018, Kenya exported £237.5 million worth of goods to the UK and imported goods worth £303.6 million.

If the country can secure markets for Kenyan cotton and textiles and incite an appetite for its minerals it could be possible to close this trade gap.

Other direct investments could boost the economy and create job opportunities in pharmaceuticals and service industries.

The largest tax paying company in Kenya, Safaricom PLC, also enjoys a large UK investment from Vodacom.

Increased investment from a pharmaceutical company such as Glaxo-SmithKline for research into tropical diseases and development of new medicine could result in job creation.

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One of the areas where UK expertise is being highly sought in Kenya is the energy sector, especially in renewable and green energy.

Kenya has made major investments in solar, wind and geothermal energy, but more needs to be done in order to reduce reliance on fossil fuels and hydroelectricity to run the industrial sector.

As the Brexit deadline looms large for the UK government and British businesses, new markets for UK goods and sources of raw material for its manufacturers have become a priority.

As new tariffs could be placed on goods leaving and entering the UK, cheaper and more business-friendly environments are becoming important for the survival of the UK post-Brexit.

UK banks could also see limited freedom of operations in Europe in a few months. Kenya could be the likely base for experimenting with financial service trade between the UK and Africa.

The success of mobile-money platforms such as M-Pesa adds credence to its claim as the first stop for investment and operations of these services by UK-owned banks some of which already enjoy stable operations in Kenya.

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