Kenya trade fact of the day

This is from the prospectus issued by the Kenyan Treasury ahead of its $2b eurobond issue in late February.

Africa is the largest market for Kenya’s exports, accounting for 40.7 per cent. of total exports in 2016, and 37.7 per cent. in the nine months ended 30 September 2017. The Common Market for Eastern and Southern Africa (“COMESA”) remained the dominant destination of exports, accounting for approximately 72.5 per cent. of the total exports to Africa and 30 per cent. of total exports in 2016.

The European Union continues to be Kenya’s second largest export market, accounting for 21.0 per cent. of total exports in 2016 and 21.6 per cent. in the nine months ended 30 September 2017. Exports to the European Union declined by 3.7 per cent. in 2016, with exports from the United Kingdom and Germany, two of the top three destinations of Kenya’s exports within the European Union, declining by 7.6 per cent. and 5.2 per cent., respectively, in the same period. In addition, a large portion of foreign tourists visiting Kenya are from Italy, Germany, the United States and the United Kingdom, which accounted for a combined 38.2 per cent. of departing tourists in 2016.

A decline in demand for exports to Kenya’s major trading partners, such as the European Union or COMESA countries, or a decline in tourism receipts, could have a material adverse impact on Kenya’s balance of payments and economy.

Over the last five years intra-Africa trade as a share of total trade in the region has risen from less than 12% to about 18%. With the implementation of the African Continental Free Trade Area this figure will jump to over 25%, and will likely grow faster over the next four decades as the African population explodes to over 2 billion people.

Read the while thing here.

AGOA, African trade and development

Nairobi is currently playing host to delegates from all over the Continent and the US attending the 8th AGOA conference. I had time yesterday to listen to Sec. Clinton’s and President Kibaki’s speeches (President Kibaki, please fire your speech writers and hire a speech therapist). Despite the embarrassing delivery, President Kibaki’s speech struck the right tone. The US should open up more to African business and Kenyans (and Africans in general) should be quick to take advantage of the existing trade opportunities – even as they continue to tackle governance problems (which, contrary to Premier Odinga’s comments, is a major road block to African development).

I felt like Clinton’s comments were a bit too vague. It is high time the US stopped treating trade with Africa as  something that only happens at the pleasure of Washington (for more on this see Aid Watch). The one thing that hit home in the speech was the call for an increase in intra-continental trade. The last time I checked this accounted for a paltry 10% of all trade on the Continent. Poor transcom infrastructure is to blame. But political risk (read deplorable governance) is also to blame. I hope the many African delegates present took this point seriously.

I don’t know what deliverables come out of such AGOA gatherings so I will wait till the end of the conference to comment on its relevance. For now I am happy that United Parcel Services (UPS) has pledged to buy staff uniforms from the Kenyan market.

Gaddafi and his new found charm

After spending more than a decade as a pariah state due to its involvement in the 1988 Lockerbie bombing of Pan Am flight 103, Libya is finally being brought back into the fold by Europe and to some extent the United States. The Europeans, led by France, have been the most eager, especially after Libya released a bunch of European medics it was due to punish for their involvement in the infection of young Libyan children with the virus that causes AIDS.

The biggest beneficiary of this new state of affairs has been none other than col. Muammar Gaddafi, Guide of the First of September Great Revolution of the Socialist People’s Libyan Arab Jamahiriya. Over the past few months, he has made amends with the EU who then agreed to build a prison centre in Libya for the detention of the many illegal African Immigrants who risk their lives to get into Europe every year. This has been seen by many analysts as just a precursor to more aid and closer relations.

Most recently, Gaddafi visited France where he was warmly welcomed by the hyperactive Nicholas Sarkozy. This was even after a junior minister in the French government said that “France was not a doormat on which the Libyan leader could wipe off the blood of his crimes.” According to Reuters, Gaddafi is expected to lead his delegation in negotiations over business deals worth billions of Euros – from a nuclear powered sea water desalination plant to French made fighter jets.

Amid all this, one wonders whether Europe’s new found pragmatism is good or bad for the citizens of the global south. Previously it was the US that had the bad habit of jumping into bed with dictators as long as it was in their strategic interest to do so while the EU remained principled with regard to democracy and human rights. Now that China has jump into the pond and muddied the water, especially in Africa, Europe has also chose to turn a blind eye to human rights violations and poor governance.

I agree that trade with Africa is a good thing and that economic empowerment of African citizens should not be contingent on democratization on the continent. After all, democracies can only flourish in countries with a sizeable, economically well off middle class. All this, however, should not be done with complete disregard for past crimes of some of the leaders involved. Gaddafi may not be as bad at home as Mugabe or Bashir but they all belong to the wrong group of African leaders – iron fisted despots who believe that they have a right to rule for life.