Stakeholders push for review of Africa's major trade pact

Trade PS Alfred K'Ombudo during the meeting with African Continental Free Trade Area officials at NSSF in Nairobi on September 4, 2024. [File, Standard] African leaders, traders and stakeholders have called for a review of the African Continental Free Trade Area (AfCFTA) to assess its effectiveness and make adjustments. Speaking at the launch of the Exporters' Booklet by the Kenya National Chamber of Commerce and Industry (KNCCI) in Nairobi on Thursday, Principal Secretary for Trade and Investment Alfred K'Ombudo, emphasized the importance of a structured review to enhance the agreement's impact. He noted that participating countries are keen to evaluate AfCFTA's progress and refine its framework to maximise trade benefits. "Our focus is on ensuring that Kenya and the broader East African region benefit significantly from the AfCFTA. We are working towards increasing intra-Africa trade and deepening our engagement with partners across the continent," K'Ombudo stated. He noted that sectors like freight transport, ICT, and financial services are becoming critical drivers of Kenya's export growth. AfCFTA, one of the major global trade agreements was established to create a single continental market for goods and services. It aims to boost intra-African trade by eliminating tariffs, reducing trade barriers, and fostering regional integration. However, despite its potential, various challenges have emerged, prompting calls for a review of tariff structures, trade facilitation measures, and non-tariff barriers. KNCCI President Erick Rutto who spoke at the event reaffirmed Kenya's commitment to strengthening regional trade and ensuring the private sector plays a central role in AfCFTA's success. "We need to work together across the continent to harmonise technical standards, certification processes, and metrology frameworks. This will ensure that products and services are recognised across borders and that businesses can trade seamlessly," Dr Rutto said. One of the major concerns among African traders has been the lack of alignment in accreditation and standardisation systems, which has hindered the movement of goods. The review process is expected to focus on harmonising regulations to create a more integrated trade environment. Kenya has been a leading proponent of intra-African trade and continues to explore new export opportunities beyond traditional agricultural products such as tea and coffee. Additionally, the government, in partnership with KNCCI, is working on a Business Amendment Bill to enhance the export sector by 2025. The Bill aims to improve the regulatory framework for exporters and create a more competitive trade environment under AfCFTA. "We plan to convene a public-private dialogue to address the specific challenges faced by exporters. This will help align policy adjustments with the needs of businesses," K'Oombudo added. Board Trustee of the Zambia Chamber of Commerce and Industry Paul Chisunka stressed the importance of using the review mechanism available to AfCFTA members. "This review opportunity allows us to evaluate AfCFTA's progress, identify areas for enhancement, and ensure better participation of small, medium, and large enterprises. It's a critical moment to streamline processes and dismantle trade barriers, ensuring equity in trade across Africa," he explained. Chisunka also emphasized the need for harmonising customs regulations, accreditation, and metrological standards to simplify trade, reduce costs and unlock Africa's full economic potential. Despite the optimism, concerns remain about uneven progress among AfCFTA member states. While some countries have successfully implemented tariff reductions and simplified customs procedures, others are lagging. Kenya's export market remains diverse, with Uganda being a top destination for Kenyan goods, importing Sh96 billion worth of products in 2023, representing 9.4 per cent of total exports. This strong trade relationship is driven by agricultural exports, manufactured goods, and petroleum products. In the East African region, Tanzania remains a key trade partner, with exports valued at Sh61 billion (six per cent). The trade between Kenya and Tanzania includes industrial goods, agricultural products, and petroleum. The United States is Kenya's third-largest export destination, accounting for Sh68 billion (6.7 per cent) of total exports. The Africa Growth and Opportunity Act (Agoa) has played a crucial role in facilitating exports of textiles, coffee, and tea to the US market. It is followed by the United Kingdom with Sh57 billion (5.6 per cent) in exports, largely consisting of tea, coffee, flowers, and textiles. Kenya's intra-Africa trade remains a crucial part of its export strategy, with exports to African countries totalling Sh460 billion in 2023, representing 45 per cent of total exports. The 4.8 per cent growth rate in intra-Africa trade reflects Kenya's commitment to regional integration through trade agreements such as the East African Community, the Common Market for Eastern and Southern Africa and AfCFTA.

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