KENYA – A study by the Overseas Development Institute (ODI) has revealed that Kenya lost on all of its top three exports to the United Kingdom that is tea, cut roses and beans.
According to the report, exports to the UK from the rest of the world have risen by 15% in eight years to 2017.
A significant portion of this market share was lost to Rwanda and Tanzania attributed to incompetent production standards and less aggressive marketing standards.
Value of Kenya’s exports to the UK have been declining that is, from close to US$500m in 2009 to US$373.7m in 2017, shows data from International Trade Centre.
Horticulture exports to the European Union fell on failure to embrace international standards as well as inability to ensure quality along the value chain.
‘Lower’ standards and lack of diversification
The study showed that Kenya’s share in UK imports fell from 16% in 2011 to 7% by 2014 as vegetables and flowers lost competitiveness to neighbouring countries due to improved wages, marketing systems, diversity and standard compliance.
Its value in the export market may continue to dwindle unless various issues such as of infrastructure, diversity and standards are addressed to put it at a competitive advantage.
“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.
Since Kenya has failed to embrace diversification, competitors including neighbouring countries are taking advantage of this to improve standards while increasing capacities to garner a better portion of the market share.
While Rwanda’s total value of UK’s imported tea increased by 20.6% between 2012 and 2016, that of Kenya flopped 0.9%.
On the other hand, Kenya’s value of UK fresh cut roses and buds shrunk by 2.3% as that of Ethiopia climbed by 88.7%
During the same period, Kenya’s value of fresh or chilled beans exported to UK fell by 12.2%, but Tanzania saw a 12.2% rise.
“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.