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TRADE-KENYA: British Imports Losing Their Appeal

Charles Wachira

NAIROBI, Aug 26 2008 (IPS) - When Kenya purchased Toyota vehicles for its military forces, instead of the all-pervasive Land Rover, it signalled a seismic change – in effect ending the most favoured status enjoyed by imports sourced from its erstwhile colonial master the United Kingdom.

Another example is De la Rue, a UK-based printing and security firm that has uninterruptedly printed Kenyan currency since independence. It is fighting to retain its contract. The administration of Mwai Kibaki broke with tradition, inviting other internationally recognised firms to bid for the job.

The London-based firm J&S Franklin Ltd served as a single-source supplier of uniforms and combat kits for the armed forces since Kenya ‘‘unshackled’’ itself from British colonial rule in 1963. It has recently been blackballed by Kenya’s department of defence when its contract was terminated to the benefit of a Chinese firm.

Similarly Brooke Marine and Vosper Thornycroft, two British companies that have exclusively supplied ships to Kenya’s navy since independence, have had to contend with the phenomenon of open tendering.

This change of fortune for British firms is captured in the official annual economic survey cobbled together by the country’s ministry of finance.

Between 2001 and 2007, imports from the UK grew at a much slower rate than imports from China and India. Since the replacement of Moi’s government in 2003, it has taken China and India three years only for their imports to Kenya to overtake those from the UK, formerly a premier source of imports.

By 2007, the value of imports from India was almost double that of imports from the UK, with China not far behind India.

‘‘It is as a result of prudent decision-making that the Kenyan government opened up the country to the Far East, including Asian countries. As a result Kenya has been able to access countries that provide better deals,’’ says Dr Gerrishon Ikiara, a former permanent secretary in the Kibaki administration and currently a senior lecturer at the Institute of Development Studies (IDS), University of Nairobi.

‘‘In the past, procurement of government goods was shrouded in mystery. Then political considerations mattered more than economic sense.’’

According to the economist, Asian countries offer competitively priced goods and services when compared with the UK.

‘‘Right now most of Kenya’s roads are either being refurbished or built anew by Chinese firms. And all our international airports are also being upgraded by Chinese owned firms. This is after going through the process of open tendering,’’ Ikiara tells IPS.

Kwame Otieno, a senior researcher with local think-tank the Institute of Economic Affairs (IEA), blames ‘‘the rigidity of the British system’’ as the fillip triggering the dip in British imports. The IEA is a non-governmental organisation that promotes debate on policy issues.

‘‘If a Kenyan, for example, wants to visit the UK, they face a lot of stringent requirements that act as a hindrance. But if they wish to travel to the Far East, China or India, the process is enabling and travel- friendly. That’s one reason that has led a lot of local business people to shy away from travelling to the UK, let alone seeking business there.’’

Rumours suggest the change in bilateral trade relations between the UK and Kenya is as a result of poor relations between the political leaders of the two countries in the recent past.

It is argued that Moi had very cordial relationships with the occupants of 10 Downing Street in London. Successive British governments deliberately turned a blind eye to the excesses of his government. As a result, firms with British ties continued to receive lucrative contracts at the expense of other countries.

The Kibaki regime has been upbraided harshly, particularly by local British envoys, for failing to tame corruption in high places.

Confirming the bad blood Sir Edward Clay, British envoy from 2001 to 2005, was in early 2008 officially declared persona non grata by the Kenyan government. During his tour of duty the 63-year-old diplomat, who has since retired, had a panache for shooting from the hip – to the chagrin of the ruling political class.

‘‘The change in the bilateral trade relations between the UK and Kenya has political overtones written all over it,’’ explains Dr Robert Nyangiro, a senior lecturer at the University of Nairobi’s government department.

‘‘The cabal that took power in 2003 had always accused the British government of aiding and abetting the misrule associated with the reign of Daniel arap Moi. The British government was a bugbear for the group because its quiet diplomacy emboldened Moi to rule autocratically.’’

As a result, ‘‘when the Kibaki group ascended to power, they tacitly removed the most favoured status afforded to British goods’’, Nyangiro posits. Understandably the spokesperson at the British embassy here, Charley Williams, does not see anything unusually awkward with the change of status that British firms face today.

‘‘It’s business and Kenya has the right to choose whomever it wishes to trade with. While it’s a fact of life that goods sourced from the UK are normally priced high, their quality is unrivalled,’’ she argues.

‘‘And, if the problems associated with counterfeits from certain Asian countries are anything to go by, my guess will be that with time the local consumers who are looking for quality products will fall back to purchasing brands from the UK because the quality is guaranteed.’’