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US keen to strengthen Kenya’s public procurement system as trade talks resume [incl. Readout]

Published date:
Wednesday, 07 February 2024
Author:
MARTIN MWITA

The US plans to strengthen Kenya’s public procurement systems in what is seen as a strategy to put in place sound structures ahead of the planned trade pact.

This comes as talks on the Strategic Trade and Investment Partnership (STIP) resumed last week with a meeting in Nairobi.

Kenya is pushing for the deal and renewal of the African Growth and Opportunity Act (AGOA) which expires next year.

Washington in a statement on Tuesday said the US and Kenya held a productive in-person negotiating round under the STIP in Nairobi, between January 29-31.

Assistant United States Trade Representative (USTR) Constance Hamilton led the team that included officials from the US Department of State, the US Department of Agriculture, and the Food and Drug Administration.

“During the three-day negotiating round, the two sides primarily exchanged views on the most recent proposed texts that concern agriculture, good regulatory practices, and workers’ rights,” US Trade Representative Katherine Tai’s office said in a statement (see alongside).

They also discussed textual issues in the chapters on anticorruption; Micro- Small and Medium-sized enterprises, and services domestic regulation. 

The US has been pushing for transparent and competitive procurement in Kenya's public government.

It also wants effective protection of intellectual property rights, favourable sanitary and phytosanitary measure among other interests.

This, as it seeks to secure business for US companies and a comprehensive market access for agricultural goods in Kenya, by reducing or eliminating tariffs.

Kenya has since entered into a grant deal with the US securing approximately Sh198 million in technical assistance towards strengthening the country’s public procurement 

The grant is facilitated by the United States Trade and Development Agency (USTDA).

whitman Ndung 1100u

It aims at fortifying the value for money approach in public procurement through the development of a comprehensive procurement manual and guide for suppliers.

National Treasury Cabinet Secretary Njuguna Ndung’u and US Ambassador  Meg Whitman signed the deal at an event in Nairobi on Tuesday [see image]. 

Ndung’u welcomed the partnership and expressed optimism the grant would help in transforming public sector procurement.

The financial infusion, the CS said, would enable smarter, long-term investments, ultimately resulting in substantial savings for the government.

“The US is a key partner in trade and investment in Kenya. The two countries will continue fostering the long standing strengthened cooperation that exists,” he said.

According to the two, the collaboration will not only enhance Kenya's procurement practices but also solidifies the robust economic ties between the two countries, setting the stage for continued cooperation and mutual benefit.

The move points to procurement irregularities and corruption in government tenders, which have previously been flagged, with the Public Procurement Administrative Review Board halting a number of multi-billion tenders mainly in State agencies.

International firms have been keen on major tenders in the country’s energy sector, roads, ports, rail among others, with a number of tenders being slowed down by either court cases or intervention by the procurement watchdog, over irregularities.

Meanwhile, Kenya is seen to bank on the renewal of AGOA, in case a strategic deal is not sealed by next year, to ensure continuity in accessing the US market.

While negotiations for a trade pact began back in July 2020 during the Donald Trump and former President Uhuru Kenyatta tenures, administration changes in both countries following subsequent elections and the Covid-19 pandemic stalled the process.

On July 14, 2022, the two countries launched the STIP which is now being pursued by the US President Joe Bidden and President William Ruto’s administrations.

According to experts familiar with negotiations, it takes up to two years or more, to seal a comprehensive deal.

“It could even go beyond 2025 before all parties agree but the negotiators have agreed to expedite the process. With this in mind, it is safe to have the AGOA in place,” an official familiar with the process, told the Star.

Kenya has been trading with the US mainly through the AGOA programme since its inception in 2000.

AGOA is a unilateral trade preference programme that provides duty-free access to the US market for over 1,800 products exported from the Sub-Saharan Africa, that meet certain eligibility requirements.

In addition, AGOA beneficiaries receive duty-free access to the United States for more than 5,000 additional products under the Generalised System of Preference (GSP).

More than 70 percent of Kenya's exports to the US are duty-free under AGOA, mainly apparel. 

With a bilateral deal, Kenya is keen to tap at least five per cent of the US market, which has the potential to earn the country more than Sh2 trillion in export revenues annually.

According to Trade and Investments Cabinet Secretary Rebecca Miano, Kenya also continues to attract US firms keen to set up in the country, an indicator of growth potential in Foreign Direct Investments.

 

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