Kenya and Indonesia target regional blocs

Sunday August 27 2023

President Dr William Ruto (L) and Indonesian President Joko Widodo during a bilateral talk at State House Nairobi on Monday, on August 21, 2023. PHOTO | DENNIS ONSONGO | NMG


Kenya and Indonesia are seeking to utilise improved political and trade ties to access each other’s regional trading blocs to expand their export markets.

During Indonesian President Joko Widodo’s visit to Kenya this week, several cooperation agreements – in energy, health, agriculture, textile and clothing, and security – were signed.

Already, Jakarta-based Pertamina Geothermal Energy has entered an agreement with Kenya’s Africa Geothermal International Limited (Agil) to develop a geothermal plant in Longonot.

Kenyan President William Ruto said Nairobi will utilise the improved ties with Jakarta to slim Kenya’s trade balance with Indonesia, which is currently in deficit.

But Kenya is also eyeing to access the Association of Southeast Asian Nations (ASEAN) market, one of the largest common markets in the Asia-Pacific region.

“Kenya will be seeking the support of Indonesia to penetrate the Association of Southeast Asian Nations, a fast-growing trade bloc in Asia,” said a statement from State House on Monday.


Read: Kenya signs deals with Indonesia on Widodo visit

This is part of Kenya’s efforts to expand its export markets to help reduce the international trade balance and ease pressure on foreign exchange.

Currently, Kenya’s trade balance with Indonesia, Thailand, and Singapore – the three largest economies in the ASEAN bloc – is negative, with Nairobi’s imports from the countries being as much as ten times higher than what it exports.

Indonesia is also seeking to gain access to the East African Community and Comesa.

“Kenya is the first in this domanial side, access Kenya, access the many other countries in the region,” Rendra Kusumawardana, First Secretary in charge of Economic Affairs at the Indonesian embassy in Nairobi, told The EastAfrican.