Kenya

COUNTRY BRIEF

KENYA

Country Context

Kenya is a major gateway to East Africa and a regional hub for trade, finance,communication and transportation services. The Mombasa Port serves over 200 million people as a critical node for trade for the Northern Corridor and it also serves northern Tanzania, DR Congo and Ethiopia. Evidence shows that many Kenyan businesses are still not sufficiently competitive to take full advantage of this emerging trade opportunities, particularly in terms of the capacity to export.The country, through Vision 2030 aims to transform into industrialising middleincome

status with an annual economic growth rate of 10% driven by an exportled development strategy. Kenya’s key challenge is creation of more productive jobs for an increasing youth population, and attracting private investors who can drive innovation and entrepreneurship. Thus, it is imperative for Kenya to reduce the cost of doing business, which is necessary for a robust private sector.

Strategy 2 Total Programme Budget Summary

72%

OUTCOME 1

Reducing Barriers to Trade
18%

OUTCOME 2

Enhancing Private Sector Markets for Trade
10%

INDIRECT COST

Total Budget US $288 Million

TMEA in Kenya

TMEA has supported the implementation of 18 projects with net funding of $ 103M in Strategy 1.

Table: Highlights of key projects funded in Kenya between 2010 to 2017

THEMATIC AREA	DETAILS	EXPECTED RESULTS BY 2017	RESULTS TO DATE
Increased Physical Access to Markets	Mombasa Port modernisation and upgrade	Reduced time to import goods through the port from 11 days to 3.8 days	• Contributed to reduced average time to import goods through the port from 11 days to 6.5 days and export of goods from 11 days to 6.8 days • TMEA’s investment at the Port has also catalysed over US$500 Million from a multilateral donor fund for berth upgrades to enable the port to handle larger vessels
Increased Physical Access to Markets	One Stop Border Posts at Malaba, Busia and Taveta	30% reduction in time taken to cross the border	• Taveta OSBP completed and launched in Feb 2016 • Busia OSBP completed and handed over. • Malaba OSBP expected to be completed and handed over by end of June 2016
Enhanced Trade Environment	Support ICT trade systems and procedures within the public sector to improve the trade environment, increase efficiency, transparency and predictability of trade processes	• Reduction in time taken to clear from 9 days to 1 day; • Increase in revenue from Kshs. 244 Billion to 331 billion	• Trade facilitation measures have led to the simplification of trade clearance procedures, transit and border formalities resulting in a reduction in turn-around time on the Northern Corridor from 18 to 6 days • Increase in revenue will be realised after on-going upgrade of the KRA customs system
Enhanced Trade Environment	Upgrade Kenya Bureau of Standards to support exports	• Increase in compliance and reduction in time to comply	• Technical regulations, policy and Standards Bill drafted • Upgraded accuracy in testing for laboratories in order to access EU markets
Improved Business Competitiveness	Roll out of best agriculture practice for smallholder horticulture farmers	Increased local and international marketability of horticulture produce from smallholder farmers	700 small-scale horticulture farmers received East Africa Good Agricultural Practices (EAGAP) certification, to enhance their compliance to Good Agricultural Practices (GAP) Standards and improve competitiveness and market access for their produce

Continuity and Innovation in TMEA Strategy 2:

Kenya’s economic reforms, characterised by a high economic growth rate, have not benefitted the whole populace. Increased terrorism has had significant impact on the tourism sector, which constitutes 25% of GDP and employs over 500,000 people. Over 40% of Kenyans live on less than US$1.21 a day. Further, inequality that mostly affects women, youth and rural populations remains a challenge that can only be addressed through inclusive economic growth and sustainable job creation.

In Strategy 2, TMEA will continue to support increased trade for job creation and improved livelihoods by reducing barriers to trade. This will be done through infrastructure development, removal of Non-Tarriff Barriers, standards improvement and adoption of ICT for Trade to increase efficiency and transparency. TMEA will also support business to enhance their productivity and competitiveness.

Intermediate Impact

Economic growth

$ 1.2B net added to total trade
(2.4% increase above trend)
Exports from EAC to the rest of the world

$ 0.4B net added to exports
(4.3% increase above trend)
Intra EAC exports (US$ billion)

$ 0.4B net added to exports
(4.3% increase above trend)

Highlights of TMEA Kenya Programmes 2017-2023

THEMATIC AREA	PROGRAMME COMPONENT	DETAILS EXPECTED RESULTS BY 2023
OUTCOME 1: REDUCING BARRIERS TO TRADE	Improved efficiency and capacity of transport and logistics networks	Mombasa Resilient Infrastructure	20% reduction in Diesel Particulate Matter and nitrogen oxide from OGVs docking in Mombasa port. KPA passes the ISO 14001 environmental standards audit
		Mombasa West Integrated Urban Road	50% reduction in traffic congestion intensity around the port of Mombasa and increased % of berth moves per hour
		Embakasi Logistics Facility	20% increase in storage and cargo handling capacity.
		Border Posts	30% reduction in time to cross border (one direction)- Integrated Border Management (IBM)
		Phase 2 of Transport Funding Policy	50% implementation of the transport funding policy; Public funds leveraged at least 90%
		Industrial Zone Development	Increased funds leveraged in apparel; increased funds leveraged in agribusiness; 10 new investments in apparel manufacturing; and 25 new investments in agro-processing
		Rehabilitation of the cruise terminal	Increased capacity to handle cruise tourism
	Improved standards and NTBs	SPS certification and traceability systems for agricultural products	50/50 targeted companies comply with HACCP certification (food safety standards; Increase by X% (or actuals) in certified agriproducts exports);90 per cent of cotton sold to market meets organic certification standards
	Improved standards and NTBs	NTB Identification, Registration, prioritization and elimination	100% of NTB along the main corridors in EAC and EATN reported, prioritized & regularly monitored; 60% of NTBs reported at the EAC/EATN border resolved through NRS; Up to 10 complex NTBs resolved per year 40% reduction in tariff equivalent of the NTM class
	Improved and more transparent trade processes and systems	Integrated Trade Management Systems	Weighted Average: less than 2 days
	Improved and more transparent trade processes and systems	Customs Efficiency Enhancements	Weighted Average: >15%; Mombasa to Malaba = 5 days 12 hrs; Mombasa to Nairobi: 2days 12hrs
	Improved regulatory environment for trade	Implementation of WTO Agreements	75% of the National Trade Facilitation Committee work plan actions implemented
		Trade Policy	Trade development bill and trade remedies enacted and 20% of action plan implemented; agribusiness policy and legislation implemented; regulatory and legislative reforms for textiles and apparel manufacturers developed and implemented
		Customs and Inspection Points within Industrial Zone	Reduction in time to clear goods at targeted textiles and apparel industrial zones

OUTCOME 2: ENHANCING PRIVATE SECTOR MARKETS FOR TRADE	Better private sector-led advocacy for trade	Developing Private-Public Dialogue (PPD) dialogue platforms for PSO/CSOs	35 in total
	Increased efficiency in private sector logistic service	Capacity Development for Logistics Industry	30% reduction in price of logistics services
	Increased export capacity of East African businesses	Export Growth for Export-ready businesses	30% increase in volume; up to $ 60 million; 80,000 SMEs
	Greater inclusion of women and small businesses in trade	Capacity Building for Women Traders and producers	% number of women traders increased