The-Accountant-Jan-Feb-2018

Governance
Granted, Kenya
will be among
the hardest hit
nations when its
former colonial
master starts
renegotiating more
than 100 trade
deals it has under
the 28-member
European Union.
“This time last year we dared to dream
and then won an historic victory.” But
there is great sarcasm behind it. A former
journalist with the Guardian twitted, “the
irony of the Brexit vote last June is that
the Brits have suddenly become a lot more
interested in what is happening in the rest
of Europe. The continent of opportunity
now seems lost.” Put in other words, it is
now dawning on Britons that the decision
to delineate from the EU could have been
an economic blunder.
In its 2017 Kenya Economic Report,
the Kenya Institute for Public Policy
Research and Analysis, a renowned
economic think tank, recommended that
the country should set in motion plans
for engaging Britain over post – Brexit
trade arrangements to avoid shocks
to exporters and likely fall in official
development funds. Kenya is listed
among the top countries in the world
that takes a huge market share of fresh
produce exports to Europe. Basically
this includes horticultural produce and
freshly cut flowers among other exports
such as tea and coffee. Granted, Kenya
will be among the hardest hit nations
when its former colonial master starts
renegotiating more than 100 trade deals
it has under the 28-member European
Union. Put differently, this means that
Britain would to a large extent spend
all their time and resources in vetting
and choosing whom to trade with from
the larger European bloc, leaving Kenya
and other countries to negotiate their
own contracts with EU individual states.
Brexit will affect the UK’s trade with the
rest of the world, including Kenya which
is part of the global economy. According
to a recent report by PWC, EU has
negotiated 36 free trade agreements with
58 non-EU countries. The UK would not
benefit from those goodies once it leaves
the EU. Though our country has made
significant strides in agricultural exports
to Europe, it has no doubt had a ride on
the shoulders of the United Kingdom
which apparently is a dominant player
within the EU. Consequently, just like
Britain, Kenya has had to go back to the
drawing board and negotiate bilateral
agreements with individual European
states. It is also important for the reader of
this article to be aware that as of now, the
Brexit “divorce bill” is yet to be finalized by
the EU. One of the options that Britain is
mulling over if its unable to secure a post-
Brexit deal with EU, is to form a trade
alliance with the US, Canada and Mexico
whose body is known as North American
Free Trade Agreement (Nafta).
To bring this dilemma into perspective,
it is good to delve deep into numbers so
as to appreciate this impact of Brexit.
An industry performance report by the
Tea Directorate, the country’s regulator
of the tea sector, indicates the volume of
tea purchased by Britain dropped from
5.4 million kilograms in March 2016 to
3.1 million kilograms in the same month
this year. The Directorate indicates that
Britain is no longer buying same amount
of tea from Kenya due to a reduced re-
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