NAIROBI: Kenya is staring at a two-pronged cut in its agriculture export revenue. This comes at the heels of Britain’s exit from the European Union and the looming deadline for signing a deal allowing the country duty-free access to the lucrative market. Those hardest hit by Brexit are the smallholder farmers exporting fruits and vegetables. While most of Kenya’s flowers do not go to the United Kingdom (UK), and are unaffected by Brexit, Kenya will be slapped with export duty of between eight and 12 per cent unless the East African Community–European Union Economic Partnership Agreement is signed before October 1.
This will make Kenya’s exports uncompetitive, leading to huge revenue and job losses. The scenario will hurt one of Kenya’s engines of economic growth as close to 90 per cent of its exports to the European Union are agricultural or agro-processed.
The Kenya National Bureau of Statistics put the country’s estimated value of exports in cut flowers, green beans and mangoes at Sh90.4 billion in 2015. This could also spell doom for more than 600,000 workers in flower farms and fresh food producers. For the duty-free deal to come into force, East African Community members ought to endorse it jointly. But some have been reluctant because they are considered least developed countries and enjoy preferential treatment because of it.
The least developed countries are not required to sign agreements since they enjoy favourable treatment under the ‘everything but arms’ scheme. This allows them to sell all products to the European Union and duty free, except arms and ammunition, and 41 tariff lines on sugar and rice on which quotas are established until full liberalisation.
