Crumbs from the trade table

Kenya secures a preliminary duty-free trade deal with China while launching a major stake sale in its state-owned pipeline company to attract investment.

Kenya said it has reached a preliminary “Early Harvest Arrangement” with China that would grant 98 percent of its exports duty-free access to the Chinese market, while negotiations continue toward a full bilateral trade agreement. Officials said the deal could boost agricultural exports, even as Kenya grapples with a wide trade deficit with Beijing. In a parallel push to attract private capital, Nairobi launched the sale of a 65 percent stake in state-owned Kenya Pipeline Company, targeting 106.3 billion shillings in what would be East Africa’s largest local-currency IPO. The divestment is part of efforts to ease fiscal pressure and reduce state ownership. Elsewhere, the Democratic Republic of Congo submitted a shortlist of state-owned mining assets to U.S. investors, advancing a proposed minerals partnership with Washington as it seeks foreign investment in copper, cobalt, lithium and gold projects.

Kenya’s preliminary trade arrangement with China grants duty-free entry for 98 percent of its exports, notably tea and coffee, and is designed to narrow a trade deficit estimated at about $3.7 billion. In purely economic terms, the logic is straightforward. Preferential access to the Chinese market could lift agricultural exports by as much as $1 billion annually, easing foreign-exchange pressures and strengthening rural incomes in a country where agriculture remains politically and socially central. But this move is unfolding in a far more complex geopolitical environment, where trade decisions are inseparable from great-power rivalry.

The agreement comes at a sensitive moment in the US–China competition for influence in Africa. Washington has invested heavily in its relationship with Nairobi, designating Kenya as its first major sub-Saharan non-NATO ally in 2024 following President William Ruto’s White House visit. That status deepened defence cooperation, expanded access to advanced military training and equipment, and reinforced Kenya’s role in regional security operations, including counter-terrorism efforts against al-Shabaab and deployments linked to Haiti. From the US perspective, Kenya has been positioned as a cornerstone partner in East Africa, both strategically and symbolically.

It is against this backdrop that Nairobi’s deepening engagement with Beijing has unsettled Washington. Ruto’s public praise of China’s role in shaping a “new world order” during his April 2025 visit to Beijing reportedly triggered irritation in US policy circles, with Senate-level scrutiny emerging over whether Kenya’s ally status was being diluted by strategic drift. By early 2026, accounts suggested that Washington had quietly encouraged Nairobi to delay the China trade arrangement, offering the prospect of extended benefits under the African Growth and Opportunity Act, which underpins Kenya’s duty-free garment exports to the US. Kenya’s decision to proceed regardless reflects a calculation that economic diversification now outweighs the risks of displeasing a single partner.

Those risks, however, are not trivial. Potential consequences include a reassessment of Kenya’s major non-NATO ally status, further reductions in US development assistance already visible in trimmed USAID allocations, and a cooling of political goodwill that has underpinned security and diplomatic cooperation. Nairobi’s leaders appear willing to absorb this friction, betting that Kenya’s strategic importance and role in regional stability will ultimately limit how far Washington is prepared to go.

This external rebalancing is mirrored by a significant domestic fiscal shift. The proposed sale of a 65 percent stake in the Kenya Pipeline Company, targeting roughly $820 million through a large local-currency offering, signals a move toward market-led governance and reduced state ownership of infrastructure. The transaction is intended to relieve budgetary pressures and mobilise domestic capital, but it also opens the door to foreign investors, including Chinese firms, in a sector that Washington watches closely. Together, the China trade deal and the pipeline divestment suggest a government actively reshaping both its external alignments and internal economic model.

Kenya’s approach contrasts with developments further west in Central Africa. The Democratic Republic of Congo has chosen a more explicit alignment with US strategic priorities, offering access to manganese, copper-cobalt, gold and lithium assets as part of a December 2025 minerals agreement aimed at reducing China’s roughly 80 percent grip on Congolese cobalt production. These efforts build on US-mediated arrangements with Rwanda designed to curb illicit ore trafficking and integrate African minerals into American-linked supply chains for electric vehicles and electronics. In this model, access to critical minerals is traded for investment, political backing and strategic protection.

Taken together, these cases illustrate Africa’s varied responses to intensifying great-power competition. Kenya is pursuing a high-risk strategy of multi-alignment, leveraging Chinese market access and domestic privatisation even at the cost of friction with its most powerful Western partner. The DRC, by contrast, is attempting to lock in Western support by repositioning its resource base within US-centric supply chains. Both approaches reflect a broader continental pattern: African states are no longer choosing sides wholesale, but selectively unbundling relationships to extract targeted economic and strategic gains. The challenge, as Kenya’s experience shows, is that the room for manoeuvre narrows as rival powers become less tolerant of perceived ambiguity.