UK dishes out US$21m funding to Kenya for establishment of digital trade corridor

KENYA – Kenyan horticultural producers are set to access the British market more efficiently and cheaply, following the set-up of a digital customs system in the East African economy.

During the recent visit to the UK by the President of Kenya, Uhuru Kenyatta, Kenyan-based non-profit making organisation TradeMark East Africa (TMEA), and the UK-based Institute of Export and International Trade ((IOE&IT), signed a memorandum of understanding (MoU) providing a framework for collaboration in the implementation of a digital trade corridor between the two nations.

To be delivered by TMEA and backed by £18 million (US$21m) of UK funding, this will boost Kenya’s economy, allowing firms to take greater advantage of the recently ratified UK-Kenya Economic Partnership Agreement and grow the £1.4 billion (US$1.6m) mutual trade.

The agreement, provides for the implementation of the UK-Kenya Trade Logistics Information Pipeline (TLIP), which aims to eliminate paperwork and introduce much better visibility up and down supply chains that flow between the two countries.

“It will cut costs for Kenyan firms producing goods like vegetables and cut flowers for export to the UK, reducing prices for UK consumers, importers, and retailers.”

TradeMark East Africa/ Institute of Export and International Trade

Along with cutting costs for green vegetables exported to the UK, the deal would benefit UK exporters by giving better access to one of Africa’s ‘fastest growing markets’.

“It will cut costs for Kenyan firms producing goods like vegetables and cut flowers for export to the UK, reducing prices for UK consumers, importers, and retailers.

“UK exporters will also be able to benefit from better access to one of Africa’s fastest-growing markets,” the two organisations said in a joint press statement.

According to reports by The East African, Kenya is seeking to increase its annual earnings from its exports to the UK market to Ksh1 trillion (US$9.25 billion) from an average of Ksh40 billion (US$370.37 million) annually, by increasing exports in flowers, vegetables, fruit, coffee, tea, as well as emerging priority value chains such as pulses, honey, nuts, edible herbs, fisheries, livestock, etc.

“We’re proud to be partnering in the TLIP project. We believe it can deliver substantial benefits, not only to traders in the relevant supply chains but also to the UK in terms of securing its position as a global leader in digital trade,” said Marco Forgione, Director General, IOE&IT.

The initiative (TLIP) is expected to accelerate trade between Kenya and the UK by reducing the administrative procedures and time to import and export by at least 30 percent and reducing order turnaround times of up to 40 percent.

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It is also expected to reduce compliance costs by 20 percent and reduce duplication, thereby reducing steps in the trading process by 50 percent.

“TMEA is excited to be expanding our homegrown digital solution and expanding TLIP to the UK, which will create a transparent, efficient, and cost-effective way of managing trade information to support and boost trade efficiency between the two countries,” said Frank Matsaert, Chief Executive, TMEA.

TLIP is the first digital trade corridor to be established between the UK and a developing country since its exit from the EU, and it is strongly aligned with trade agreement (EPA) signed between the two countries.

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