#BTColumn – connecting Kenya and Barbados

The views and opinions of the author (s) do not represent the official position of Barbados TODAY.

from Dr. Jan Yves Remy and wife Chelcee Brathwaite

On the sidelines of the UNCTAD XV conference, which took place on March 3-7. Hosted by Barbados on October 10, 2021, a growing publicity between Barbados’ Prime Minister Mia Mottley and Kenya‘s President Uhuru Kenyatta entered a new phase. While commercial agents were busy negotiating the final text of the Bridgetown Pact at the UNCTAD XV plenary session, Barbados also hosted a senior Kenyan contingent of officials and businessmen at a Kenya-Barbados business forum.

The forum was organized for Kenyans and their Barbadian counterparts to share best practices and consider business opportunities in finance and investment; Telecommunications and digitization; Travel and tourism; Energy; Transport and logistics; and biotechnology and organic trade.

The forum appears to have been successful and culminated in the signing of three agreements: an air transport agreement; a Memorandum of Understanding (MOU) to set up a Joint Committee on Trade and Investment; and a letter of intent to develop the National Botanical Garden. In these SRC Trading Thoughts, we examine what business and trading opportunities could really lie in the growing Barbados-Kenya relationship.

Existing trade relations between Barbados and Kenya

Current trade between Barbados and Kenya is sparse and undiversified.

According to the International Trade Center (ITC) trade map, Barbados’ total goods trade with Kenya in 2020 was only $ 69,000 – that’s just 0.004 percent of world trade – with imports mostly in textiles and womenswear and exports of an unspecified one Nature. The trade in services between the two countries could not be quantified. Based on this poor starting position, there are opportunities to realize export growth and diversification on both sides.

According to the ITC’s Export Potential Map, rum, printed paper (cardboard) labels and undenatured ethyl alcohol are the products with the greatest export potential from Barbados to Kenya; For Kenya, on the other hand, exports with the greatest potential to Barbados could include black tea (3kg packs), goat meat and pineapple (prepared or canned).

In terms of export diversification, ITC’s export potential map found crude palm oil; Palm oil (excl. Crude oil) and fractions; and mixtures of fragrances used in food and beverages to be Barbados’ best option for export diversification in Kenya; while prepared or canned tuna, oranges, fresh or dried and broken rice are Kenya’s best options for
Export diversification in Barbados.

Trading opportunities in new innovative areas

In addition to traditional trade in goods, there is also growth potential in innovative fields such as biotechnology and organic trade, renewable energies and digital payments. And Kenya came to the forum well represented.

Given Kenya’s recent advances in agrobiotechnology and organic trade, it was no surprise that a representative from the Kenya Plant Health Inspectorate Service was part of the contingent visiting Barbados.

Market Data Forecast assesses the global market for agricultural biotechnology
$ 39.7 billion in 2021, with projections to reach $ 66.7 billion by 2026. According to the U.S. Department of Agriculture’s 2020 report on agricultural biotechnology in Kenya, the first commercial planting of Bt cotton, a genetically engineered, pest-resistant cotton variety, began in March 2020. Research on genetically modified cassava has been completed and research on wilt-resistant bananas and virus-resistant ones Sweet potatoes running.

Kenya is also conducting animal biology research to develop vaccines, disease diagnostic test kits and trypanosome-resistant cattle, but these are still at an early stage of development. Given the similar challenges Barbados faces in terms of crop loss due to pest and climate change factors, as well as animal care, there is tremendous scope for collaboration here.

Another big area is renewable energies. The forum was attended by the Kenya Electricity Generating Company (Ken Gen), the leading power generation company in East Africa with a generation mix of geothermal energy (39.2 percent), hydropower (45.3 percent), wind (1.4 percent) and heat (14 , 1 percent).

Barbados recently submitted updated climate protection plans to the United Nations, which envisage 95 percent renewable energies in the electricity mix by 2030.

Given that over 85 percent of Ken Gen’s installed capacity is renewable, there is significant scope to work together to meet the renewable energy goals. In addition, in 2019 Kenya received worldwide recognition for the commissioning of the Lake Turkana Wind Power Farm, the largest wind power plant in Africa.

Despite the small size of Barbados, it is surrounded by large oceans that create opportunities for offshore wind power plants and ocean tide generation that renewable energy providers like Ken Gen can invest in.

The Kenyan mobile network operator Safaricom PLC was also present at the Business Forum. is known M-Pesa.

Since its launch in 2007, M-Pesa has grown into one of the most successful mobile payment services in the world, with over 50 million active users across Africa.

Originating at a time when mobile payment services were still in their infancy, especially in developing countries, several factors contributed to M-Pesa’s success, including the use of technology, simplicity, a widely accessible distribution system and solid partnerships with banks and the Kenyan central bank. With M-Pesa Global, a new product, registered customers can now send and receive money worldwide.

Hopefully, in recognition of the ongoing challenges facing payment systems across the Caribbean, there has been a fruitful exchange of best practices between M-Pesa and Barbadian
Financial regulators.

Promotion of stronger transport and logistics links

While the rise of digital technologies will open up some opportunities for commerce, Barbados and Kenya still need to develop their transportation and logistics links to take full advantage of the agreements signed.

Better transport networks not only enable goods to be traded, but also enable the freer movement of people and services.

For example, during the pandemic, many Ghanaian nurses moved to Barbados to provide specialized care and there is no reason to believe that this arrangement could not be extended to other countries such as Kenya.

In addition, international tourist arrivals in Kenya have increased 3.9 percent since 2018, from 2.02 million tourists to 2.05 million in 2019; Similarly, Barbados has seen growth in arrivals with stays for three consecutive years, welcoming more than 680,269 visitors with stays and 614,933 cruise passengers in 2018, according to the latest annual report from BTMI.

Of course, the global tourism industry has suffered massive economic consequences since the pandemic.

However, since recovery begins with different products and the historical links between the two countries exist, it seems worthwhile for the two countries to encourage more travel to each other’s destinations.

There are currently no direct flights between Barbados and Kenya or even
Caribbean and Africa.

The air transport agreement will hopefully usher in a new era in transportation and travel, and it bodes well for two major African logistics providers. Kenya Airways and Express Shipping and Logistics Limited were also represented at the Business Forum.

Working with these companies could soon provide direct flights and shipping services between Barbados and Kenya, as well as eliminating third-party transit providers
Visa regulations that make the joining process difficult.

Final thoughts

Last year, CARICOM strengthened its direct cooperation with the African continent through joint measures in the procurement of COVID-19 vaccines and most recently by hosting the first Africa-CARICOM summit, which took place virtually on September 7, 2021.

Although there has always been a Pan-African spirit that bound the two regions and an obvious affinity due to cultural and historical ties, Africa and CARICOM Leaders hadn’t gone beyond rhetoric to create direct trade and investment relationships for the growth of business opportunities.

Through PM Mottley and President Kenyatta, we have two leaders who are committed to building concrete and sustainable trade relationships with one another that could lead to further relationships between CARICOM and Africa through the African Continental Free Trade Agreement. And, as the SRC demonstrated earlier this year through its Caribbean-Africa trade webinar series, there are many options
to learn from each other.

By convening the Business Forum to share best practices and discuss the potential for collaboration in key innovative and dynamic sectors, Barbados and Kenya can pave the way for others.

Dr. Jan Yves Remy and Ms. Chelcee Brathwaite are director and trade researchers at the Shridath Ramphal Center for International Trade Law, Policy and Services on the Cave Hill Campus of the University of the West Indies, Barbados.

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