#BTColumn – Connecting Kenya and Barbados
The views and opinions expressed by the authors do not represent the official position of Barbados TODAY.
through Dr Jan Yves Remy and Ms Chelcee Brathwaite
On the sidelines of the 15th UNCTAD Conference organized by Barbados from October 3-7, 2021, a growing court between the Prime Minister of Barbados Mia Mottley and the President of Kenya Uhuru Kenyatta entered a new phase. While trade officials were busy negotiating the final text of the Bridgetown Pact at the 15th UNCTAD Plenary Session, Barbados also hosted a high-level contingent of Kenyan officials and businessmen at a Kenya-Barbados Business Forum.
The Forum was organized for Kenyans and their Barbadian counterparts to exchange best practices and examine business opportunities in the areas of finance and investment; telecommunications and digitization; travel and tourism; energy; transport and logistics; and biotechnology and the biotechnology trade.
The Forum appears to have been successful and resulted in the signing of three agreements: an air services agreement; a memorandum of understanding (MOU) on the creation of a joint committee on trade and investment; and a memorandum of understanding on the development of the National Botanical Garden. In this SRC Trading Thoughts, we explore the trade and business opportunities that could really lie in the growing links between Barbados and Kenya.
Trade between Barbados and Kenya
Current trade between Barbados and Kenya is scarce and undiversified.
According to the International Trade Center (ITC) trade map, Barbados’ total merchandise trade with Kenya in 2020 was only US $ 69,000 – accounting for just 0.004% of its world trade – with imports mainly of textiles and women’s clothing and exports of an undetermined character. Trade in services between the two countries could not be quantified. From this low baseline, opportunities exist to achieve export growth and diversification on both sides.
According to the ITC Export Potential Map, rum, printed paper (cardboard) labels and undenatured ethyl alcohol are the products with the greatest export potential from Barbados to Kenya; while for Kenya the exports with the greatest potential to Barbados could include black tea (3 kg packages), goat meat and pineapples (prepared or preserved).
In terms of export diversification, ITC’s export potential map found crude palm oil; palm oil (excluding crude) and fractions; and mixtures of odoriferous substances used in food and drink are Barbados’ best options for export diversification to Kenya; while prepared or preserved tuna, oranges, fresh or dried and broken rice are Kenya’s best options for
diversification of exports to Barbados.
Opportunities for exchanges in new innovative fields
Besides the traditional trade in goods, there is also potential for growth in innovative areas such as biotechnology and organic trade, renewable energy and digital payments. And Kenya came to the Forum well represented.
Given Kenya’s recent advances in agricultural biotechnology and organic trade, it is no surprise that a representative from the Kenya Plant Health Inspectorate Service is part of the visiting contingent in Barbados.
Market Data Forecast assessed the global agricultural biotechnology market at
US $ 39.7 billion in 2021, with projections to reach US $ 66.7 billion by 2026. According to the United States Department of Agriculture’s 2020 report on agricultural biotechnology in Kenya, the first commercial plantation of Bt cotton, a genetically modified pest resistant variety of cotton, began in March 2020. Research trials on genetically modified cassava have been completed and research on bacterial wilt resistant bananas and pest resistant sweet potato. viruses are in progress.
Kenya is also undertaking animal biotechnology research to develop trypanosome resistant vaccines, disease diagnostic test kits and cattle, although these are still in early stages of development. The possibilities for collaboration are immense, given the similar challenges Barbados faces in crop yield losses due to pests and climate change drivers, as well as in the area of ââanimal care.
Another big area is that of renewable energies. Kenya Electricity Generating Company (Ken Gen) was present at the Forum, East Africa’s leading power generation company with a generation mix comprising geothermal (39.2 percent), hydropower (45 , 3 percent), wind (1.4 percent) and thermal. (14.1 percent).
Barbados recently submitted updated climate change mitigation plans to the United Nations, which included a 95% share of renewables in the power mix by 2030.
Considering that over 85% of Ken Gen’s installed capacity is renewable, there is a significant opportunity for collaboration to achieve renewable energy goals. Additionally, in 2019 Kenya received global recognition for the launch of the Lake Turkana Wind Farm, Africa’s largest wind power plant.
Despite Barbados’ small size, it is surrounded by large oceans that create opportunities for offshore wind power plants and tidal power generation in which renewable energy service providers like Ken Gen can consider investing.
Also present at the Business Forum was the Kenyan mobile network operator Safaricom PLC, best known for its M-Pesa.
Since its launch in 2007, M-Pesa has grown into one of the world’s most successful mobile payment services, with more than 50 million active users across Africa.
Created at a time when mobile payment services were still in their infancy, especially in developing countries, various factors contributed to the success of M-Pesa including its use of technology, simplicity, distribution system widely accessible and its strong partnerships with banks and the Central Bank of Kenya. M-Pesa Global, a new product, now allows registered customers to send and receive money worldwide.
Recognizing the current challenge of payment systems in the Caribbean, fruitful exchanges on best practices have hopefully taken place between M-Pesa and Barbados
Facilitate the strengthening of transport and logistics links
While the increase in digital technologies will open up some business opportunities, Barbados and Kenya will need to further develop their transport and logistics links to take full advantage of the potential offered by the signed MoUs.
In addition to enabling trade in goods, better transport networks will allow for the freer movement of people and services.
During the pandemic, for example, many Ghanaian nurses moved to Barbados to provide specialist care, and there is no reason to believe that this arrangement could not be extended to other countries like Kenya as well.
In addition, since 2018, international tourist arrivals to Kenya have increased 3.9% from 2.02 million tourists to 2.05 million in 2019; Likewise, Barbados has seen three consecutive years of growth in stay-at-home arrivals, welcoming more than 680,269 staying visitors and 614,933 cruise passengers in 2018, according to the latest BTMI annual report.
Of course, since the pandemic, the global tourism industry has suffered massive economic fallout.
However, as the recovery begins with separate products and given the historical ties between the two countries, it seems attractive for both countries to promote more trips to their respective destinations.
At present, there are no direct flights between Barbados and Kenya, nor even
the Caribbean and Africa.
The air services deal will hopefully usher in a new era for transport and travel and bodes well for two major African logistics service providers. Kenya Airways and Express Shipping and Logistics Limited were also present at the Business Forum.
Collaboration with these companies could soon see direct flights and shipping services between Barbados and Kenya, and the elimination of third parties in transit.
visa requirements that complicate the login process.
Over the past year, CARICOM has intensified its direct collaboration with the African continent, through joint action to purchase COVID-19 vaccines, and more recently by hosting the first Africa- CARICOM held virtually on September 7, 2021.
While there has always been a Pan-African spirit linking the two regions, and an obvious affinity due to cultural and historical ties, Africa and CARICOM leaders had not gone beyond rhetoric to create direct trade and investment relationships for the growth of business opportunities.
Through Prime Minister Mottley and President Kenyatta, we have two leaders determined to develop concrete and lasting business relations with each other, which could lead to new relations between CARICOM and Africa, through the African Continental Free Trade Agreement. And as the SRC demonstrated through its Caribbean-Africa trade webinar series earlier this year, there are plenty of opportunities.
to learn from each other.
With the convening of the Business Forum to exchange best practices and discuss the potential for collaboration in key innovative and dynamic sectors, Barbados and Kenya may well pave the way for others.
Dr Jan Yves Remy and Ms Chelcee Brathwaite are respectively Director and Business Researcher at the Shridath Ramphal Center for International Trade Law, Policy and Services, Cave Hill Campus, University of the West Indies (Barbados).