What Kenya should do to gain fully from duty China duty-free trade

In March 2026, Kenya flagged off the first consignment of Kenyan exports to China under the Kenya–China Early Harvest Agreement. 

Through this Agreement, Kenyan exporters now enjoy duty free access to approximately 98.2 per cent of Chinese tariff lines, enabling increased exports of agricultural products.

In response, the Kenyan government pledged to implement investor friendly reforms alongside additional agreements and policy measures aimed at strengthening long term economic partnership between the two nations.

The shipment was also marked by exports beyond raw agricultural produce, but value-added goods such as processed avocado oil, refined hides, and packaged coffee beans.

By transitioning from the export of raw coffee cherries to roasted and packaged products, and from fresh fruit to processed oils, Kenya is signaling its ambition to position itself as a competitive manufacturing and value addition hub.

This strategic move aims to enhance local industry, increase revenue retention, and strengthen the country’s presence in global markets.

China is one of the world's most dynamic economies with a consumer base of over 1.4 billion people. This represents a huge market for Kenyan exporters, farmers, and cooperatives.

The duty-free agreement creates opportunities to scale up production and expand sales, while also strengthening export sectors and boosting foreign exchange earnings.

Moreover, it provides a pathway to reach millions of consumers without the price disadvantages often imposed by tariffs.

 In particular, the agreement benefits rural areas where key exports such as tea, coffee, and increasingly avocados are produced. Consequently, the duty-free trade impact will be felt most strongly in the agribusiness and manufacturing sectors, which form the backbone of Kenya’s economy.

The Early Harvest Agreement highlights horticulture, macadamia nuts, tea, coffee, and cut flowers as key sectors poised to benefit from zero tariffs.

Previously, these products faced import duties ranging from 10 per cent to 25 per cent for value added goods, 6 per cent to 16 per cent for tea and coffee, and about 4 per cent for flowers.

These costs made exporting to China challenging for the majority of MSMES and significantly reduced profit margins.

For instance, in 2024, data from the International Trade Centre shows that Kenya exported tea and coffee valued at approximately 27,932 US dollars to China, despite China importing similar products valued at approximately 2,097,293 US dollars globally.

It is worth noting that Kenya has a competitive advantage in global markets for coffee, tea, flowers, and avocados, which could be focused on to exploit the Chinese market.

Further, data from the Kenya National Economic Survey of 2025 also shows that only 2 per cent of Kenyan flowers are exported to China, valued at $1.06–1.39 million, with a quantity of about 182,000 kg.

With the implementation of a duty-free tariff, Kenya has an opportunity to expand its flower exports and strengthen its presence for tea and coffee in the Chinese market.

This demonstrates the export market potential that China offers to the untapped demand for Kenyan products.

To leverage the agreement, the Kenyan government needs to prioritise strengthening the capacity of small scale farmers and exporters.

This includes expanding access to modern technology, appropriate agricultural machinery, and improved production systems to increase yields, enhance quality, and ensure consistency.

Given China’s stringent quality and processing standards, meeting these requirements will be essential for maintaining market access and building long term credibility.

Moreover, the government could consider implementing targeted subsidies for critical production inputs. Previous research by KIPPRA has shown that exporters mainly struggle with logistics, storage, and transportation challenges.

It is therefore necessary for the country to invest in cold chain systems, rural infrastructure, and effective distribution networks.

Further, establishing Special Economic Zones (SEZs) specifically aligned with the Kenya-China duty-free market access could streamline the trade facilitation requirements, reduce operational costs, and support the identified products' value chains to unlock the potential in the duty-free agreement.

Enhancing Kenya’s visibility in the Chinese market is equally crucial. To build meaningful traction among Chinese consumers, the State Department for Trade and Kenya Export Promotion and Branding Agency need to invest in targeted marketing initiatives and strategic promotional campaigns that effectively communicate the value, authenticity, and competitive advantages of Kenyan products.

Kenya’s diplomatic missions in China will have a key role in strengthening Kenya-China duty-free trade, promoting investment in sectors like agriculture and manufacturing, and organising trade fairs and expos for Kenyan MSMEs in China.

In addition, the county government will play a key role in exploiting the market under duty-free access. For instance, county governments could support farmers of key products such as avocados, tea, and macadamia nuts.

This could be in the form of providing processing factories for value addition, improving county roads to improve the county logistics and transport networks that connect agricultural products to factories and major road networks.

Further, county governments could have commitments in their County Integrated Development Plans to build capacity for local farmers and SMEs on the quality and standards, especially the Sanitary and Phytosanitary Standards and packaging that are recommended for the Chinese market. This will require the county governments to collaborate with national government agencies to support farmers and SMEs at the county level.

In conclusion, the Kenya-China duty-free trade opens a new chapter for Kenya's export market by providing unprecedented access to the expansive Chinese market. Nonetheless, success lies in Kenya’s ability to take advantage of this potential and turn it into a significant economic advantage through supportive trade and industrialization policies and coordinated industry efforts between the government and the private sector.

The trade agreement, if well exploited, could serve as a strategic gateway to the broader ASIA regional market.

Nonetheless, Kenya needs to strengthen its production capacity and enhance quality standards. Continued commitment from the government and the private sector to implementing this agreement could mark the beginning of a transformative era for unlocking Kenya’s exports.

John Karanja, Kevin Wanjala, Shadrack Mwatu, and Elsie Siringo

All are policy analysts at KIPPRA