Kenya, Germany seek to strengthen business ties

Germany has emerged as Kenya's third-largest export market in Europe, comprising 8% of all Kenyan exports. Traditionally, horticultural products like cut flowers, processed fruits, and nuts have dominated Kenya's trade relations with Germany. Despite a trade deficit favoring Germany at $399 million by the end of 2014, the recent announcement of a $276.5 million development cooperation fund from the German government for Kenya hints at a promising future for expanding business opportunities between the two nations. To shed light on how both countries can enhance their economic relations, Maren Diale-Schellschmidt, the Country Director of the Delegation of German Industry and Commerce in Kenya, joined CNBC Africa for an exclusive interview. The conversation delved into pivotal strategies for boosting trade ties and fostering mutual growth. Germany's substantial investment in Kenya is a result of distinct efforts to bolster development aid and promote robust business partnerships. Diale-Schellschmidt emphasized the increasing inclination of German companies towards East Africa, with a particular focus on Kenya. The burgeoning interest in the African market is a testament to the shifting global economic landscape, where emerging markets are gaining prominence. Despite significant challenges such as political uncertainty and corruption, the improved business environment in Kenya has enticed German companies back into the market. Notably, Volkswagen's decision to commence local assembly operations in Kenya reflects a wave of returning investments. Encouragingly, the potential for growth in trade between the two countries is immense, with an emphasis on value addition and enhanced manufacturing capabilities. Diale-Schellschmidt highlighted the need to prioritize local processing to maximize exports and bridge the existing trade deficit. While Germany remains an export-oriented nation, opportunities for Kenya to expand its exports to Germany are steadily increasing. By focusing on enhancing production quality and workforce skills, Kenya can attract more foreign investments and diversify its export portfolio. The strategic positioning of Kenya as a regional hub underscores its significance as a gateway to the broader East African market. Looking beyond bilateral agreements, Germany and Kenya are exploring partnerships in sectors like water resource management, renewable energy, and agriculture. The recent German Water Week in Kenya exemplifies the collaborative efforts to leverage German expertise and technology for mutual benefit. As the world witnesses a paradigm shift towards emerging markets, both Germany and Kenya are poised to capitalize on the evolving economic landscape. By fostering sustained collaboration and innovation, the two nations can strengthen their business ties and pave the way for robust growth in the years to come.