Kenya and South Africa Bilateral Trade 2019

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Kenya and South Africa Bilateral Trade 2019

Kenya and South Africa Bilateral Trade 2019

Kenya and South Africa have no trade agreement currently. Trade between the two countries is conducted under the most-favoured-nation – World Trade Organization – rules. Kenya is a party to the East African Community (EAC) customs union (CU) and the Common Market for Eastern and Southern Africa (COMESA) free trade area (FTA). South Africa belongs to the Southern African Customs Union (SACU) and the Southern African Development Community (SADC) FTA.

Kenya and South Africa have ratified the Agreement establishing the Tripartite Free Trade Area (TFTA) (not yet in force) negotiated between EAC, COMESA and SADC member states. South Africa and Kenya have negotiated tariff reductions under the EAC-SACU TFTA tariff negotiations, but the agreement is not yet in force.

South Africa is Kenya’s second-largest trading partner in Africa after Uganda. In 2019, Kenyan imports from South Africa amounted to US$688 million (8% increase from 2018), and exports to South Africa were valued at US$32 million (25% decrease compared to 2018). In 2019, Kenya had a trade deficit with South Africa of approximately US$656 million.

In 2019, Kenya’s imports from South Africa were 32% of Kenya’s imports from Africa and 4% of world imports. The exports accounted for 1 per cent of African imports, and 0.6 per cent of the world exports.

Kenya’s export products 2019

In 2019, Kenya mainly exported gold, fresh-cut roses, medium oils, fermented tea, and printing machinery to South Africa (see Table 1). All of Kenya’s world exports of crab, keys, wood, natural uranium, friction materials, central heating radiators and electric lamp assembling parts went to South Africa in 2019.

Table 1: Kenya’s exports to South Africa, as % of total exports to South Africa, Africa and the world

HS Code
Product
US$m 2019
% of total South Africa exports
% of Africa exports
% of world exports
71081300
Gold
13.34
41%
100%
85%
06031100
Fresh cut roses
3.53
11%
59%
1%
27101921
Medium oils
1.59
5%
66%
0.5%
09024000
Black fermented tea
1.33
4%
1%
0.1%
84431300
Printing machinery
1.16
4%
99%
42%

Source: ITC TradeMap (2020) and tralac calculations.

Kenya’s exports are levied MFN tariff duties in South Africa, which is the SACU common external tariff (CET). Kenya’s gold and printing machinery are imported into South Africa duty-free; fresh-cut roses are levied a 20% import duty; and medium oils and fermented tea are levied specific duties of 11c/l, and 400c/kg, respectively.

Kenya’s import products 2019

In 2019, Kenya’s main imports from South Africa included flat-rolled iron/steel products, semi-finished iron/steel products, coal, hot-rolled bars and rods and passenger vehicles (see Table 2). All of Kenya’s African imports of iron/steel products, passenger and goods vehicles, fresh apples, wine, spirits, ciders, medium oils, new pneumatic tyres, chocolate, refrigerators, etc. are sourced from South Africa.

Table 2: Kenya’s imports from South Africa, as % of total imports from South Africa, Africa and world

HS Code

Product

US$m 2019

% of total South Africa imports

% of Africa imports

 % of world imports

72083900
Flat-rolled iron/steel products
11.81
16%
100%
40%
72071100
Semi-finished iron/steel products
103.42
15%
100%
55%
27011900
Coal
39.25
6%
87%
87%
72139100
Hot-rolled bars and rods
27.90
4%
100%
68%
87033290
Passenger vehicles
17.97
3%
100%
68%

Source: ITC TradeMap (2020) and tralac calculations.

South Africa’s exports into Kenya are levied MFN tariff duties, which is the EAC CET. The EAC CET has 6 tariff bands: duty-free, 10%, 25%, 35%, 50% and 60%. However, Kenya was granted exceptions for specific products to the EAC CET between 1 July 2018 and 1 July 2019. South Africa’s flat-rolled & semi-finished iron/steel, coal and medium oils were imported into Kenya duty-free. South Africa’s fresh apples, wine, passenger and goods vehicles are levied 25% import duty in Kenya. South Africa’s hot-rolled bars and rods are imported into Kenya either duty-free or face a specific duty of 25% or US$200/MT whichever is higher depending on the tariff line.

All of Kenya’s world imports of wood, unwrought tin, wood, sodium cyanide, precious stones, natural calcium phosphates, live ship and goats, ferro-nickel, sugar beet seed, vanilla, fresh berries, cowpeas and petroleum oils are imported from South Africa.

About the Author(s)

Talkmore Chidede

Talkmore Chidede

Talkmore Chidede holds a Doctor of Laws (LL.D) degree in International Investment Law from the University of the Western Cape. Talkmore also holds a Master of Laws (LL.M) degree (Cum Laude) in International Trade and Investment Law and a Bachelor of Laws (LL.B) degree, both from the University of Fort Hare. His research interests include international investment law, international trade law, regional economic integration and international commercial arbitration.

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