Trade between Kenya and the United Kingdom has experienced substantial growth since the implementation of a post-Brexit Economic Partnership Agreement (EPA) in March 2021. This agreement has facilitated increased exports from Kenya to the UK, alongside new commitments for strategic investments.

Kenya's exports to the UK surged by 64 percent, reaching $1.43 billion in 2024, up from $875.45 million in 2021. This growth was primarily driven by increased exports of crude animal and vegetable materials, fruits, coffee, and tea. As a result, Kenya's trade surplus with the UK more than quadrupled to $366.81 million from $84.54 million during the same period, marking four consecutive years of trade surplus for Nairobi.

The total volume of trade between the two nations also grew by over 50 percent, from $1.66 billion in 2021 to $2.51 billion in 2024. In the 12 months leading up to March 31, 2025, the trade volume further increased by 12.6 percent to $2.59 billion.

Historical and Political Context

The relationship between Kenya and the UK dates back to Kenya's independence in 1963, characterized by cooperation in military, economic, and cultural spheres. Following the UK's withdrawal from the European Union on January 31, 2020, a new continuity trade agreement was signed between Kenya and the UK on December 8, 2020. This agreement, which came into force on January 1, 2021, and was ratified on March 22, 2021, aimed to safeguard tariff-free access and stabilize trade channels.

The UK is a significant trading partner for Kenya, serving as its second most important export destination. Kenya primarily exports tea, coffee, and horticultural products, accounting for 27% of fresh produce and 56% of the black tea market in the UK. Conversely, Kenya imports motor vehicles, printed materials, machinery, and chemicals from the UK.

Laws, Policy, and Governance

The Economic Partnership Agreement (EPA) ensures immediate duty-free, quota-free access for goods exported from Kenya to the UK. In return, Kenya has committed to a gradual tariff liberalization for certain UK goods, with some domestically sensitive products excluded. The EPA also includes provisions for simplified Rules of Origin, making it easier for Kenyan products, particularly value-added agricultural goods, to enter the UK market.

On July 2, 2025, Kenya and the UK officially launched a renewed Strategic Partnership for 2025–2030. This bilateral framework seeks to intensify cooperation in trade, investment, climate action, green growth, technology, and security. This partnership is expected to unlock over KShs. 427 billion in investments.

Stakeholders and Testimonies

The Kenya Association of Manufacturers (KAM) has consistently highlighted the importance of a stable trade environment for the manufacturing sector. While the post-Brexit trade deal has opened new avenues, local manufacturers still face challenges such as high taxation, energy costs, regulatory burdens, and competition from cheaper imports. Anthony Mwangi, CEO of the Kenya Association of Manufacturers, emphasized the need for enhanced competitiveness to fully capitalize on global market opportunities.

Evidence and Data

In June 2025, Kenya exported £36.7 million to the UK, while importing £23.2 million, resulting in a positive trade balance of £13.5 million for Kenya. Key Kenyan exports included cut flowers (£11.7 million), tea (£9.94 million), and other vegetables (£3.25 million). Major imports from the UK in the same period were refined petroleum (£5.01 million), cars (£2.19 million), and scrap iron (£912,000).

The UK is the largest European foreign investor in Kenya, with approximately 100 British investment companies valued at over £2.0 billion. The UK has pledged to facilitate KShs. 266.1 billion in new investments across Kenya and KShs. 32.3 billion in capital markets funding by 2030. Additionally, KShs. 17.7 billion is committed to boosting the innovation sector, benefiting over 500 start-ups and supporting 5,000 digitally driven Small and Medium-sized Enterprises (SMEs), projected to create 30,000 new jobs in the digital sector.

Risks and Implications

Despite the positive trade figures, the manufacturing sector in Kenya faces ongoing challenges. Frequent shifts in taxation and policy create an unstable investment climate, discouraging long-term commitments. The influx of cheaper imports also disadvantages local manufacturers, making it difficult to compete. The compatibility of the UK-Kenya trade agreement with other regional commitments, such as those under the East African Community (EAC) and the African Continental Free Trade Area (AfCFTA), remains a point of discussion, with some EAC member states expressing concerns.

Unknowns and Controversies

While the EPA allows for other EAC partner states to accede to the agreement, Tanzania has criticized the bilateral deal, citing a potential violation of the region's Customs Union Protocol. The long-term implications of these bilateral agreements on regional trade integration within the EAC are still unfolding.

Timeline and Next Steps

• **December 8, 2020:** UK and Kenya signed a continuity trade agreement.
• **January 1, 2021:** Trade agreement entered into force.
• **March 22, 2021:** Economic Partnership Agreement (EPA) was ratified.
• **July 2, 2025:** Renewed 5-year Kenya-UK Strategic Partnership pact signed, aiming to unlock over KShs. 427 billion in investments.

What to Watch

Observers will be keenly watching the implementation of the renewed Strategic Partnership and its impact on job creation and economic diversification in Kenya. The progress of the Nairobi Railway City project, designed by British architecture firm Atkins UK and potentially funded by UK Export Finance, will also be a key indicator of the partnership's success. Furthermore, the ongoing discussions within the EAC regarding the compatibility of bilateral trade deals with regional protocols will be important to monitor.

Related Stories

Further analysis on Kenya's manufacturing sector challenges and opportunities, as well as the broader implications of trade agreements like the AfCFTA, can provide additional context to these developments.