The UK bolsters trade ties with Kenya

It still makes me smile to visit a flower or vegetable farm in Kenya, and see produce already packaged and labelled for familiar UK supermarkets – a reminder of globalisation, but also of the fact that Kenya has a healthy trade surplus with the UK.

In other words, trade in both directions is healthy and growing, but Kenya actually exports more to the UK than the UK to Kenya.  And apart from brightening up houses across a gloomy winter UK, what do those cut flowers signify?  More jobs for Kenyans, more tax revenue to the Kenyan government, more spin off for local businesses. 
This week, the UK launched its Trade and Investment White Paper , a new strategy for securing greater openness to trade and investment.  Britain has always been a strong supporter of global trade, believing profoundly that greater trade is good for individuals, countries and the world.  With thriving export markets like horticulture and tea, and a steady influx of foreign tourists most Kenyans already know that global trade is central to growth and poverty reduction.

But the global economic crisis has caused some to question the continuing merits of openness.  The White Paper sets out the case for continuing openness as a route to make growth and prosperity happen on a global scale, including in Kenya.

So what does the UK want to do?  Firstly we want to strengthen the multilateral trading system.  That means working with the WTO and others to address the shifting challenges of global trade and investment.  We want the WTO to work for all its members in the 21st century, and we will work hard to finalise the Doha round of trade negotiations which would deliver a $170bn boost per year to the global economy.  At the recent World Economic Forum, Prime Minister David Cameron called on every leader to join him in saying 2011 was the \’make or break year\’ for Doha negotiations.

We also want to enable developing countries such as Kenya to get greater benefit from trade and investment.  A new Advocacy Fund will give capacity to developing countries when negotiating global trade rules.  This will help us promote greater access for countries like Kenya to key markets. 

Trade will also be a central theme of our bilateral aid programmes in future and in particular we will focus on promoting regional integration in Africa.  We already started this process in Kenya last week when TradeMark East Africa was launched by Prime Minister Odinga and DFID\’s Africa Minister Stephen O\’Brien in Nairobi.  This is one of the major programmes of the UK\’s Africa Free Trade Initiative (AFTi), which also had its official launch on Wednesday.

AFTi will provide technical assistance to help make trade between African countries and regions faster, easier and cheaper.

Of course, we are also going to look for opportunities for UK businesses to trade and invest.  This means using the UK\’s networks overseas to support British business, encourage greater inward investment in the UK, and to help secure a strong, sustainable and open global economy that benefits all. 

In Kenya this work is spearheaded by the excellent UKTI office here in the High Commission.  For example next month they will bring the London Chamber of Commerce to Kenya, to follow up their highly successful visit this time last year.

A further opportunity to promote trade between the UK and Kenya will come in September when the Lord Mayor of London (representing the City of London – Europe\’s key financial and commercial hub) will visit Kenya.  During his visit he will focus on infrastructure and financial services, and in particular the merits of Public Private Partnerships.  With visits and other events such as these 2011 will be a big year for Kenyan chances of attracting UK investment.

To maximise benefit from such opportunities confidence in the investment climate is key.  I speak with current and potential UK investors in Kenya almost every day.  There is interest in a wide range of sectors including Power, Infrastructure, Agriculture and ICT, all Kenyan priorities.  But there is concern that the Kenyan investment climate is becoming more difficult. 

Kenya has dropped four places on the World Bank\’s \’ease of doing business\’ table (now ranked 98) and several recent government interventions have raised concern for investors.  People want to see agencies that are helping trade, like the new anti-counterfeiting agency, be given more support and independence. 

And they don\’t want to see Government officials interfering in what should be transparent, impartial market mechanisms.  Even regulatory systems that are important in their own right can be abused by bureaucrats and Ministers, often for corrupt purposes.  We would love to see Government grip these issues, and thus propel Kenya towards its Vision 2030.  And of course the slow pace of implementing the constitution, an unreformed judiciary, and political in-fighting can have a big effect on business confidence.

The UK has a strong history as a trading and investing nation.  We are the world\’s 6th largest exporter and the 3rd largest investor in foreign markets.  The UK continues to be one of the world\’s most attractive places to do business and is home to more European headquarters than all the other European economies combined. 

This new White Paper is a further demonstration of UK commitment to trade.  All investors are welcome in the UK, irrespective of their nationality or types of investment as long as they meet our corporate governance standards, and do not break competition or national security restrictions. 

The balance of trade with the UK is already in Kenya\’s favour.  But it is a key part of my job to take trade between Kenya and the UK to a whole new level.  So I hope that people reading this will take five minutes to leave me a comment on how we can work on this together.

Macaire is the British High Commissioner to Kenya. This blog was first published on the FCO website.

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