Jane Ngoiri, 35, is a veteran farmer who has high hopes for an increase in income in 2019. What has injected a sense of optimism into Ngoiri, and other Kenyan farmers, is the impending bilateral agreement the country will sign with China in the first quarter of 2019 facilitating duty-free access of exports from Kenya into China.

Ngoiri owns a farm of 90 acres (36.4 hectares) in central Kenya where she grows and exports kale, avocados, tomatoes, citrus fruits and thorn melon. She plans to diversify her crop range even more to prepare for the opportunities in the Chinese market.

Kenya has already signed a major agreement with China in October 2018 on food, plant and animal safety, known as sanitary and phytosanitary measures, before the country's agricultural produce is introduced to the Chinese market.

"I hope to increase my income by a considerable amount once I get access to the Chinese market. Already, I have done research that shows the Chinese demand is much greater than that of the European Union. My annual income is currently about $250,000 from exports, mostly to Europe; but I calculated that it could almost double once I access the larger Chinese market," said Ngoiri.

She is just one of about 3,000 registered Kenyan agricultural exporters who are targeting the Chinese market once the bilateral agreement is signed and new exporter-friendly regulations are implemented.

Alternative markets

According to Monica Juma, Cabinet Secretary for Foreign Affairs, Kenya exports over $95 million worth of agricultural products to China a year, with tea, coffee and leather being the leading commodities. Other exports, such as horticulture, make up only a small portion of exports.

Kenya also exports meat products to China, including exotic meats. These products include crocodile meat, ostrich and snail.

From China, it mainly imports rubber, machinery, transport equipment and chemicals.

"The bilateral agreement of tariff-free trade is expected to be signed in the first quarter of 2019. This will be a stepping stone and a major breakthrough for the country in eliminating trade barriers. A lot of my economic advisors have informed me that exports will increase to about $250 million by December 2019 once the deal goes through," said Juma.

She said she expects a lot of Kenya's horticulture products, such as cut flowers, to be well received in China. "As a result, over 100,000 jobs will be created directly and indirectly locally," said Juma.

After holding bilateral talks with Chinese President Xi Jinping in Shanghai last November, Kenyan President Uhuru Kenyatta tweeted, "Access to the Chinese market will have a positive impact on the lives of common people and this will help counter any negative propaganda peddled by detractors of our strong Sino-African relations. As a nation, we look forward to an open Chinese market for Kenya's exports."

The unpredictable political and economic situation mostly in the United States and Europe is creating many challenges for exporting companies, and Juma said this has driven the need to look for alternative reliable markets such as China.

According to Professor Germano Mwabu, a World Bank consultant economist for Africa, the move by Kenya is well timed considering that the economy has been on a downturn in recent months. He sees the high inflation currently averaging 18 percent dropping due to the agreement.

"The rising cost of high taxation has contributed to the high inflation rates in the country. Exporters will make big money as the prices of their commodities in China will be much higher than what they sell [for] in the European market. Local inflation will drop somewhat as the money they [exporters] make will obviously return to the Kenyan economy and bring other positive outcomes, such as employment and heavy domestic spending," Mwabu told ChinAfrica.

According to Mwabu, the problems facing the European Union, such as Brexit, make the Chinese market even more favorable to many local farmers and exporters.

"The future of the European Union is unpredictable economically, socially and politically," said Mwabu.

Seizing opportunities

The Kenya National Bureau of Statistics reports the value of imports from China to Kenya in 2017 reached Sh390 billion ($3.8 billion), a 15.7-percent jump from Sh337 billion ($3.28 billion) in 2016. It is clear that the new tariff-free trade agreement will go a long way to address the imbalance in trade between China and Kenya. Mwabu said the question to be asked is whether Kenya, and Africa in general, can take advantage of expanding opportunities?

"The [Chinese] market is untapped and has room for expansion, and that is likely to happen considering China has initiated both multilateral and bilateral agreements with many African nations," said Mwabu.

He predicts a lot of African nations switching their new markets to China this year and doing away with traditional markets such as those in Europe and North America.

According to the World Bank figures of 2017, Kenya was the world's 33rd largest export economy, valued at $5.95 billion. Its gross domestic product stood at $70 billion, making it the sixth largest economy in Africa.

The Ministry of Foreign Affairs says over 23 agricultural export companies based in Kenya have already signed independent deals with China in December 2018. One of the first companies to enter into a deal to export 5 tons of coffee directly to China is Primax Agri Products Ltd., an agricultural exporting company based in Kenya that also exports horticulture to Europe and the United States.

"The government will independently come up with even better deals that will ease trade. The future looks great when we turn our heads to China. Already over 10,000 Chinese companies have started businesses in Africa last year ranging from small to large scale," said Mwabu.

"China is now favoring Kenya ahead of Nigeria and Egypt [in terms of investment]. The cost of energy [electricity] in Kenya has been high, but in recent months the cost has reduced by 35 percent," added Mwabu, citing one of the attractive investment benefits.

(Reporting from Kenya)

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