The European Union has called on Kenya to improve its business climate, raising concerns over corruption, unpredictable legislative changes, and an unfavorable tax regime.
This comes even as the EU prepares to scale up trade relations with the East African nation under a newly implemented Economic Partnership Agreement (EPA).
Speaking to Bloomberg, EU Ambassador to Kenya Henriette Geiger emphasized the need for urgent reforms to enhance investor confidence.
“We’re working on the business and investment climate, and at the moment it’s not very favorable in Kenya,” she noted.
Geiger warned that regional competitors such as Tanzania, Rwanda, and Uganda were quickly catching up, while Kenya appeared to be complacent.
Geiger stressed that for Kenya to fully benefit from the EPA which grants it duty-free and quota-free access to the EU market the government must undertake meaningful reforms.
“What we’ve seen in countries with similar agreements is a significant rise in trade volumes compared to those without EPAs,” she explained.
The ambassador also encouraged Kenyan businesses to explore new alliances and broaden the country’s export base, which currently relies heavily on agriculture. “Kenya needs to diversify its exports.
The private sector should come together to seize new business opportunities,” she said.
In 2023, trade between Kenya and the EU reached €3.4 billion (about sh 500 billion), marking a 53% growth over the past decade.
Kenya exported goods worth €1.4 billion (sh 205 billion), primarily vegetables, fruits, and flowers, while importing €2 billion (sh 294 billion) in mineral products, chemicals, and machinery from the EU.
Kenya and the EU signed the EPA in May 2024 at State House, Nairobi, with President William Ruto and EU officials, including Ambassador Geiger, in attendance.
The agreement officially came into effect on July 1, 2024.
Described as the EU’s most ambitious trade deal with a developing country in terms of sustainability commitments, the EPA includes binding provisions on environmental protection, labor rights, and transparent dispute resolution.
It also remains open for other East African Community (EAC) countries to join in the future.
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