Kenya has reached a preliminary bilateral trade understanding with China that will grant 98.2% zero-duty market access for its goods, marking one of the most consequential trade engagements in recent years.
- •The development follows sustained government efforts to expand Kenya’s export basket and reduce persistent trade imbalances through targeted bilateral and multilateral engagements.
- •While China recently announced duty-free and quota-free (DFQF) access for African exports, the framework largely favours Least Developed Countries (LDCs), leaving developing economies such as Kenya outside its core benefits.
- •The bilateral breakthrough comes at a time when Kenya’s overall export performance has shown modest improvement, even as regional and product-specific disparities persist.
Nairobi initiated direct negotiations with Beijing aimed at securing market access terms comparable to those enjoyed by regional peers within the East African Community and other African economies. These engagements have now yielded an “early harvest” framework, signalling China’s willingness to recalibrate trade relations with Kenya.
Trade Cabinet Secretary Lee Kinyanjui described the agreement as a “monumental progression” that opens the Chinese market to a broad range of Kenyan products at zero duty, with particular emphasis on agricultural exports, which remain the backbone of the domestic economy.
Why it Matters
The proposed zero-duty access is expected to unlock new opportunities for Kenyan exporters, particularly in agriculture, agro-processing and value-added goods, while supporting job creation and export diversification. Policymakers view the agreement as a corrective measure that could gradually narrow the trade gap with Asia and reduce over-reliance on traditional markets.
Beyond trade flows, the agreement carries broader strategic weight, positioning Kenya to leverage China’s vast consumer base while reinforcing its standing as a regional manufacturing and export hub. At the same time, the extent of these gains will depend on Kenya’s ability to scale production, meet China’s regulatory and quality standards, and move up the value chain rather than relying on raw minimally processed exports.
As negotiations advance beyond the early harvest phase, analysts will be watching closely to assess how quickly Kenyan exporters can translate zero-duty access into sustained export growth, and whether the deal can meaningfully reshape the country’s long-standing trade imbalance with Asia.
Kenya's Exports
According to the Q3 2025 Balance of Payments Statistical Release, total export earnings rose to KSh 289.4 billion in the third quarter of 2025, up from KSh 282.4 billion in the corresponding quarter of 2024, representing 2.5% growth. The expansion was primarily supported by stronger exports to Africa and Europe.
Africa remained Kenya’s largest export destination, accounting for 44.6% of total export earnings after recording a 15.3% increase. This performance was driven by sharply higher exports to the Democratic Republic of Congo (57.5%), Uganda (34.5%), Egypt (31.1%) and Rwanda (10.9%), underpinned by petroleum re-exports, tea, potatoes and motor spirit shipments.
Exports to Europe also strengthened, with foreign exchange earnings rising 5.2% to KSh 60.8 billion, supported by increased shipments of cut flowers and macadamia nuts, particularly to the Netherlands and Kazakhstan.
However, exports to Asia declined by 14.2% to KSh 68.0 billion, reflecting reduced earnings from the United Arab Emirates, India, Pakistan and Yemen. This contraction underscores Kenya’s limited penetration into Asian markets despite the region’s dominance in global trade.
While exports remain subdued, imports from Asia continue to expand rapidly, reinforcing structural trade deficits. Import expenditure in the third quarter of 2025 rose 7.4% to KSh 725.0 billion, with Asia accounting for 68.6 per cent of the total import bill.
Imports from China alone grew 8.6%, driven by machinery and industrial equipment, while purchases from Saudi Arabia and South Korea more than doubled. In contrast, imports from the UAE declined sharply due to reduced fuel shipments.
