UK sets up Ksh 74billion fund to kick start exports to Kenya

Clive Hollick
Chairman House of Lords Economic Affairs Committee, Labour Peer and founder of IPPR think tank, Clive Hollick. Photo: Twitter

In a bid to revitalise its declining number of exports to Kenya, Britain has set up a Ksh74 billion fund to provide credit lines for local firms to buy their goods.

Over the years, London has remained Kenya’s largest source market for tourists but its exports have been dwindling, losing out to China, India and Japan.

Official data shows the value of imports from the UK to Kenya dropped to Ksh40.1 billion in the first 11 months of last year, compared to Ksh41.3 billion a year earlier and Ksh45.7 billion in 2013.

Despite this, the UK is at the forefront of key industries including horticulture, hydrocarbon development, finance and telecoms.

Kenya’s two top earning sectors, tourism and agriculture make the UK a major contributor to the Kenyan economy with UK companies also leading the way in the oil and gas sector, in partnership with the Kenyan Government.

The UK’s Trade envoy to Kenya and Tanzania, Lord Clive Hollick, the UK’s Trade envoy to Kenya and Tanzania, arrive in the country today (Wednesday 17 February) for a three-day visit.

During his visit he will discuss the key elements of UK-Kenya trade and to explore the growing spectrum of trade and investment opportunities for the UK in Kenya’s renewable energy sector as well as unveiling the fund which will also provide cover against risks incurred by British firms while exporting goods to Kenya.

“Central to his discussions with national government will be the UK Export Finance (UKEF) which has set aside up to £500m (Sh74bn) to support trade with Kenya.” – British High Commission in Nairobi statement

The United Kingdom Export Finance (UKEF) is Britain’s export credit agency coverings UK exporters against risks associated with export trade and guarantees exporters seeking commercial bank loans.

The agency also advances loans to overseas buyers of goods from the UK, which could include Kenyan firms looking to import British merchandise into the country.

Accompanied by the British High Commissioner to Kenya Nic Hailey, and a delegation from the High Commission, Lord Hollick will be visiting Turkana County on Wednesday and Thursday where they will explore potential solar hybridizing sites that are marked for development by Tropical Power, a British clean energy development company.

He will also visit Tullow Oil’s Lokichar Basin drilling sites as well as attending meetings with the Governor for Turkana, Hon. Josphat Nanok, and other County government officials to discuss potential investment opportunities in the County.

While in the country, he will also officially open the new Turkana offices of the Kenya Market Trust (KMT) which the UK, through the Department for International Development (DFID), has funded KMT with £24m (Ksh 3.5bn) from 2012-15 to improve market access for the poor.

KMT is working in Turkana to ensure increased income to farmers from the sale of livestock and livestock products and Lord Hollick will meet with various government ministries and parastatals including the Office of the President, Energy and Petroleum, National Treasury, Geothermal Development Company (GDC) and Kenya Electricity Generating Company (KenGen).

Central to his discussions with National government will be the aforementioned UK Export Finance (UKEF) which has set aside a fund of up to £500m (Ksh 74bn) to support trade with Kenya.

His visit comes at a time when the Kenyan Government has set ambitious targets to boost its energy mix and increase output to 500MW, as part of the Energy Pillar in Vision 2030, to help guarantee the reliable, affordable power necessary to underpin sustainable development.