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Brexit will not curtail the operations of British firms in Kenya.
Interviews with officials representing UK companies in Kenya revealed that they would not consider moving jobs out of the country following UK’s vote to leave the European Union (EU).
Kevin Leung, British Airways Kenya’s commercial manager said a plunging British pound and the anticipated slump in Britain’s economy will not cut into the number of UK passengers visiting the country, which he said is a key market for the airline.
“We are still committed to the Kenyan market and do not have intentions to pull out. I’m not anticipating any material long term impact on us, may be short term we will have a little of that,” said Mr. Leung who is also responsible for the Ghana market.
The airline’s owner IAG SA had last Tuesday predicted a surge in inbound tourism spurred by weakening of the pound, saying the Brexit effects would not lead to significant cuts or fare discounts.
Barclays Bank Kenya (BBK) – a subsidiary of UK-based Barclays Bank Plc last week said in a statement that it would, “continue to take all significant factors in the local and global macro-environment into account as it pursues its strategy across the continent,” adding that it remained focused on strengthening its position as a leading financial services provider in Kenya.
Standard Chartered said the effect would not distress its Kenyan operations in general but a devaluation of British pound rates and that of euro rates could result into trade imbalance between the two countries.
“Kenya exports about 70 per cent of its horticulture to the UK and EU. A significant and sustained depreciation in the GBP and the EUR will result in less export FX proceeds and deterioration in the trade balance,” said Head of Communications at Standard Chartered Bank Kenya Tom Indimuli.
The Chief executive of pharmaceutical giant GlaxoSmithKline (GSK) Sir Andrew Witty said that the pharmaceutical industry would have less of an immediate impact on sales but would however, lead to an overall negative outcome.
“Europe has gone from 27 fragmented, independent, not-talking-to-each-other regulatory authorities in the healthcare space to one. That’s a big deal,” he said, speaking on behalf of all GSK outlets globally.
The pharmaceutical industry benefits greatly from as much intra-country cooperation chiefly from a regulatory standpoint.
A report by business risk intelligence firm, EXX Africa however, showed that the Kenyan markets were relatively stable following the ‘Brexit’ vote, although any disruption in the EU trade negotiations would negatively impact the cut flowers export market.
It said the decision would hurt Kenya’s flower industry in delaying the ongoing negotiations of a trade agreement between the EU and EAC as the union copes with the UK’s departure.
The Kenya Flowers Association says such delays would cost the industry USD38 million per month. Kenya exports over one third of cut flowers mostly to Netherlands and the UK.
However, it is likely that the UK would prioritise trade negotiations with Kenya given the two countries’ long-standing bilateral relations.
Over 60 UK firms operate from Kenya, including Barclays bank, BAT, Diageo, Unilever, De La Rue, Finlays, G4S, Tullow Oil and BG Group among others.