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EU-Kenya Business Forum: European Investment Bank Signs $1.1 Billion Deal

Nairobi hosted the EU-Kenya Business Forum 2023, when Kenya and European nations sought to bolster trade and investment by highlighting economic opportunities and potential.

Kenya’s President William Ruto – present at the forum said “was the culmination of the determined effort under bilateral strategic dialogue.”

PROPARCO, which provides funding and support to both businesses and financial institutions in Africa, Asia, Latin America and the Middle-East, has signed three deals.

The Memorandum of Understandings (MoU) include investing in Kenyan companies working in clean energy and corporate management.

“It reflects a new partnership that we have established together based on common values and collective actions for inclusive development,” said France’s Foreign Minister for Foreign Trade, Economic Attractiveness in French Nationals Abroad – Olivier Becht.

During the EU-Kenya Business Forum 2023, European Investment Bank (EIB) Vice President Kettel Thomsen, who is on a five-day business tour in East Africa, also confirmed a $1.1 billion worth of new investments for local businesses in Kenya and Tanzania.

The billion dollar deal is through a partnership with Trade and Development Bank (TDB) in which the lender’s President Admassau Kaddese said would be EU’s largest ever business financing corporation in East Africa.

“The deal is set to enhance access to finance by African companies facing trade disruptions, pandemics and energy price shocks stemming from Russia’s invasion of Ukraine,” said Kettel.

EU-Kenya Trade Volumes

Today, the EU is the largest export destination for Kenyan products and its third source of imports.

These products include flowers and agricultural products and in exchange, Kenya imports a wide range of manufacturing goods from Europeans.

The EU accounted for $1.3 billion of Kenyan exports in the year 2021 and accounted for 16.5 percent of Kenya’s total import bill the same year – equivalent to $2.8 billion, representing 14.8 percent increase from a year earlier.

“It is only reasonable that as business partners on such a scale, we should engage more and engage all the time,” said President Ruto.

Despite the bilateral effort, the overall trade value potential between the EU and Kenya is over $600 million more per year than the actual trade value.

The union’s investment jumped to more than 30 percent of Kenya’s total Foreign Direct Investment (FDI) stock from 27.3 percent in 2018.

According to data by the Kenya National Bureau of Statistics (KNBS), EU investors have interest in key areas such as Information and Communication, wholesale and retail trade and Manufacturing Sectors.

Unlocking barriers

In his speech during the EU-Kenya business forum, President Ruto called on the EU nations to unlock barriers for agricultural products.

“Continued consultations and collaborations can unlock the barriers for stronger trade relations and investment opportunities.”

Kenya’s Trade Cabinet Secretary Moses Kuria rallied EU investors to leverage Africa Continental Free Trade Area (AfCFTA) to uplift the livelihood of millions of Africans.

He, however, took issue with the EU for favouritism when doing business with different African states.

“Some of our neighbours and partners enjoy free market access to your countries. Is it right, is it moral for Kenya to continue suffering because we are a middle income country?” posed Kuria.

Upcoming Investment Forums

Kenya is set to host to three key events starting April this year when trade ministers, Africa’s top 100 companies and private sector on the continent will convene in Nairobi to develop the implementation matrix of AfCFTA.

Later in July, alongside the mid-year AU summit, Nairobi will host the Kenya International Investment Conference (KIIC) when President Ruto will hold the summit on climate change in Africa.