Kenya loses UK market share to Rwanda, Dar

A worker preparing cut flowers for export at a local farm. FILE PHOTO | NMG 

In Summary

• Reduced competitiveness and lack of diversification cited for downturn
• Kenya’s exports to the UK has been on decline, moving from Sh50.3 billion in 2009 to Sh37.6 billion in 2017.
• Kenya’s top three exports to the UK are tea, cut roses and beans.

By PATRICK ALUSHULA
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Kenya must raise production standards and up its marketing to counter similar efforts by its neighbours racing for a pie of the United Kingdom (UK) market, latest trade and investment report states.

According to the latest study by Overseas Development Institute (ODI) exports to the UK from the rest of the world have risen by 15 per cent in eight years to 2017.

Kenya lost out on all its top three exports to the same destination during that period.

Standards

“Kenya has lost its competitiveness to other countries and that has to be rectified by upping its standards, improve marketing and branding of its products as well as diversifying,” said Dirk Wellem Te Velde, principal research fellow and head of Economic Development Group.

Data from International Trade Centre showed that the value of Kenya’s exports to the UK has been on decline, moving from Sh50.3 billion in 2009 to Sh37.6 billion in 2017.

This is tipped to fall further should the country fail to address challenges of infrastructure, diversity and standards to ward off increasing competition.

The study showed that Kenya’s share in UK imports fell from 16 per cent in 2011 to seven per cent by 2014 as vegetables and flowers lost competitiveness to neighbouring countries due to improved wages, marketing systems, diversity and standard compliance.

Diversification

“Lack of diversification has reduced Kenya’s competitiveness and given rise to significant competition from other African countries such as Rwanda, Ethiopia, Tanzania and Ivory Coast, all gradually eating into Kenya’s market share in the UK,” said Mr Velde in the report.

He added that in some cases, where the country has been unable to comply with EU maximum residue limit requirements in exports such as beans, neighbouring countries have capitalised on it to gain share.

Kenya’s top three exports to the UK are tea, cut roses and beans. But between 2012 and 2016, its total value of UK’s imported tea has shrunk by 0.9 per cent while that Rwanda surged by 20.6 per cent.

During the same period, Kenya’s value of UK fresh cut roses and buds shrunk by 2.3 per cent as that of Ethiopia climbed by 88.7 per cent.

And while Kenya’s value of fresh or chilled beans exported to UK fell by 12.2 per cent, Tanzania saw a 12.2 per cent rise.