Page 12 - Nile Explorer Issue 007

even for Kenya, which retains the stron- would take place by British multina-
gest ties with the UK, principally tionals as a consequence of Brexit. The
through its exports of cut flowers, fresh EAC market has been growing relatively
fruit and vegetables. Bilateral trade rapidly over the last decade, and a large
between both countries exceeds share of the investments is associated
KES.139 billion (£1 billion) by 2018. with natural resources (especially in
The UK is also one of the largest inves- Tanzania and Uganda). Thus the moti-
tors in Kenya, Vodafone plc owns stake vations are location-specific and less
in Kenya's largest taxpaying firm, Safar- strongly dependent on conditions in the
icom. The UK is also a major buyer of source-country market.
Kenyan horticultural produce. The UK The point of worry however, would be
imports 8.5% of Kenyan goods, and 3.4% in the area of remittances. The World
of British goods make up Kenya's Bank’s latest brief shows that East
imports. Until a decade ago, the UK was African countries received $17.38
Brexit: Impact on Kenya's largest source of FDI; however billion from their citizens living abroad
China is now the largest source of FDI.
Trade and investment between 2013 and 2018. According to
on East African In relation to EU, exports to the EU the bank, Kenya topped the region as the
from East African Community are biggest beneficiary of remittances,
Community mainly coffee, cut flowers, tea, tobacco, receiving $10.74 billion, followed by
fish and vegetables. Imports from the Uganda ($6.28 billion), South Sudan
ritish government statistics show EU into the region are dominated by ($2.85 billion), Tanzania ($2.39 billion),
B that foreign direct investments in machinery and mechanical appliances, Rwanda ($1.13 billion) and Burundi
Africa doubled between 2005 and 2014, equipment and parts, vehicles and phar- ($257 million). The foreign remittances
from £20.8 billion ($27.6 billion) to maceutical products. The East African outpaced foreign direct investment
£42.5 billion ($56.5 billion).Because of Community (Burundi, Kenya, Rwanda, (FDI) to become the largest source of
the longstanding historical links, prod- Tanzania, and Uganda) finalized the external financing in low and
uct of their colonial histories, trade and negotiations for an Economic Partner- middle-income countries Its latest
investment links, Europe — and the UK ship Agreement (EPA) with the EU on Migration and Development Brief
in particular — has maintained strong 16 October 2014. Kenya and Rwanda shows that the volume of remittances
economic ties with the East African signed the EPA in September 2016, and into the five East African countries
region. However, the intensity of those Kenya has ratified it. For the EPA to increased by more than 60 per cent to
links has declined in recent years enter into force, the three remaining $4.66 billion in 2018, from $2.84 billion
because of the growing importance of EAC members need to sign and ratify in 2013.
South–South trade links — both the agreement. South Sudan became the
intra-African trade and trade with sixth member of the EAC in September An analysis of the World Bank data for
emerging markets (particularly China). 2016. The European Commission 2018 by the Washington-based Pew
The EU-27 (i.e., the European Union submitted a proposal for conclusion, Research Centre shows that most of the
minus UK), as a destination for EAC signature and provisional application of inflows into Tanzania were from the
exports, had fallen from around 35% of the full EPA with the East African Com- United States, Kenya, Uganda, Burundi,
exports in 2000 to just 20% by 2015. It is munity to the Council in February 2016. South Africa, Malawi and Australia.
projected that this fall will continue and On the other hand, foreigners living and
worsen post Brexit. In terms of FDI, Kenya, Tanzania and working in Tanzania remitted some
Uganda are countries where the UK is a $629 million to their countries last year,
AT regional level, UK has declined as a significant stakeholder, being the single with most of the outflows going to
market for EAC exporters at an even leading investor in Kenya, representing India, Kenya, China, Uganda, US,
faster pace — going from 14.6 to just approximately 23% of the investment Germany, Burundi, Italy, Britain,
3.4% over the same period. The nominal stock, and the second largest investor in Rwanda and Pakistan. According to the
value of EAC trade towards the UK has Tanzania (21% of the investment stock). EAC trade report (2017) East Africa’s
also been falling — peaking at 766 In Uganda, British firms account for FDI inflows declined by 25.3 per cent to
million USD in 2008 and declining to 10% of the FDI stock, but in the other $6.6 billion in 2017 from $8.8 billion in
just 447 million USD in 2015. In terms two landlocked EAC countries Rwanda 2016. Kenya recorded the highest
of trading links with individual mem- and Burundi UK investment is negligi- decline in FDI inflows—a drop by 60.6
bers of the EAC, it is actually quite ble. Accordingly, there is no reason to per cent to $717.7 million, down from
surprising how low the UK now ranks, suppose that significant divestments $1.8 billion. It was followed by Uganda,

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