Business News: European Union pledges to help Kenya grow exports to Europe
Head of delegation of EU to Kenya Ambassador Stefano Dejak. [photo: Jonah Onyango/Standard]
European Union (EU) will support Kenya boost its export capacity to the trading bloc, its head of delegation has assured.
In an interview with Weekend Business, EU Head of delegation to Kenya Ambassador Stefano Dejak said Kenya’s manufacturing and agricultural sectors have huge potential yet to be realised. He said since over 26 per cent of Kenya’s export go to EU markets, there is need for more support to more diverse sectors and not only horticulture.
“Most of the [Kenyan] exports are unprocessed. We want to assist Kenya to increase the share of processed agricultural products. At the moment, the value chains in agriculture and commercialisation are not yet at desirable levels,” said Dejak.
He said small-scale farmers must be assisted since they carry huge export potential. Currently, EU is funding Kenya Rural Development Project to a tune of Sh9.9 billion (86.4 million euros) to boost agriculture.
Having successfully hosted the 10th World Trade Organisation Ministerial Conference (MC10), Dejak added that Kenya scored incredible success especially in areas of agricultural subsidies and removal of taxes on Information Technology-related goods.
On manufacturing, he appealed to the Kenya Association of Manufacturers to take advantage of the regional integration and specialise in areas that can win them comparative advantage.
“Manufacturing sector is usually critical for economic take-off of any country. World Bank report shows this sector has stagnated yet it produces most jobs in any economy,” he said.
For increased value chain in agriculture, Dejak observed that, a strong manufacturing sector that can significantly contribute to economic development is desirable.
According to the latest Economic Survey 2016 by Kenya National Bureau of Statistics, manufacturing sector’s real output grew by just 3.5 per cent last year compared to a 3.2 per cent growth in 2014. In order to boost access of East African Community (EAC) goods to European market, the diplomat who has been in the East African region for 11 years now, revealed that EU was ‘so close’ to signing into the Economic Partnership Agreement that binds EU and EAC.
Signing is expected to be followed by ratification by the respective EU member parliaments. Its ratification will address matters such as trade defence provisions, flexible rules of origin, harmonisation of custom legislation and standards of exports.
But even before that, he said Kenya is benefiting from Standards and Market Access Programme (SMAPP) that was launched in September 2014. Through the project, EU is assisting Kenya on sanitary and phyto-sanitary measures to minimise risks and hazards related to agricultural products. Such standards, if not met, goods can be locked out of international markets.
The diplomat noted that EU is satisfied with Kenya’s progress with implementing Vision 2030 projects. “Kenya is on the right track and EU is proud to be a partner. When success stories of the continent are mentioned, Nigeria, South Africa and Kenya feature,” he said.
Speaking ahead of Europe Day celebration slated for tomorrow, Dejak said despite the teething problems in any integration, EAC agenda should be at the heart of every leader in the region.
“EU has 28 members now and its existence is pegged on free movement of goods, people and capital. When countries are talking of integration, some citizens may question why but benefits are plenty. EAC is important for the region’s growth,” added Dejak.