Singapore and Kenya BIT enters into force
Business Day | 31st August 2023
The Singapore and Kenya bilateral investment treaty (BIT) came into force on 20 August. The agreement took effect five years after it was signed by former Senior Minister of State for Trade and Industry Dr Koh Poh Koon and former Kenyan Cabinet Secretary for the National Treasury Henry Rotich, who in 2020 was removed from his position following charges of corruption.
The deal is set to grant a wide range of protections to each country, including non-discriminatory treatment, the freedom to move capital across the borders, access to international arbitration in the case of investment disputes, fair treatment and protection under customary international law, protection from illegal expropriation, and non-discriminatory compensation for losses related to armed conflict, civil strife and war.
Trade between the two countries is worth millions of Singapore dollars, with the total bilateral trade in goods for 2022 coming to SGD 212.2 million (USD 157 million). Kenya stands as the ninth-largest trading partner to Singapore as of last year. Singapore predominantly exports synthetic filament yarn, fuel oils and ethylene copolymers to Kenya, and the African country exports goods including reptile leathers, avocados and raw hides to the small Asian nation.
Singapore had a direct investment abroad (DIA) to Kenya of SGD 20 million (USD 15 million) at the end of 2021. The BIT is predicted to give investors more confidence in the trade relations between the two countries, providing the DIA with the scope to grow.
Kenya is the dominant economy in the East Africa Community (EAC), with a GDP of USD 113.4 billion recorded in 2022, and holds a highly desirable entry point to neighbouring landlocked nations, along with one of sub-Saharan Africa’s largest maritime ports, sparking Singaporean enthusiasm for its value as a trading partner and spurring on its interest in the BIT.
Singapore’s Minister for Trade and Industry Gan Kim Yong said in a statement: “The entry into force of the Kenya-Singapore Bilateral Investment Treaty is an important milestone that will further boost trade and investment flows between our countries. It will offer greater protection for Singapore investors venturing into the Kenyan market, and vice-versa, safeguarding investments and boosting investors’ confidence.”