To fast-track implementation of the African Continental Free Trade Area (AfCFTA), the expansion of an implementation strategy is essential as it leverages more in-depth integration within the framework of AfCFTA to enable an increase in Kenya's trade and investment in Africa" states the Cabinet Secretary Betty Maina, Kenya Ministry of Industrialization, Trade and Enterprise Development during the launch of the Kenya AfCFTA Implementation Strategy. Let’s explore the notification in detail -
Kenya AfCFTA Implementation 5-Years Trade Strategy
Kenya has founded its National African Continental Free Trade Area (AfCFTA) Implementation Strategy 2022-2027 to expand opportunities for industrial diversification, investment, and job creation. The strategy also strives at deepening relations with other countries in the African Continent which has a population of over 1.3 billion people and a combined Gross Domestic Product of over USD 3.4 trillion.
The Strategy determines priority export products and sectors for goods and services aligned with Kenya's national development goals and aspirations, including the Integrated National Export Development and Promotion Strategy (INEDPS) and the Big Four Agenda.
Speaking during the launch of the Strategy and unveiling of the AfCFTA National Implementation Committee held at a Nairobi hotel today, the Cabinet Secretary for Industrialization, Trade, and Enterprise Development, Ms. Betty Maina expressed that AfCFTA will assist the country‘s trade expansion into untapped African markets.
An ad-hoc National AfCFTA Implementation Committee (NIC) comprising Ministries, Departments, and Agencies (MDAs); Council of Governors; Private Sector Associations; Relevant academic and research organisations, and Non-governmental Organisations (NGOs) has also been inducted to ensure effective and coordinated implementation of the Strategy.
Ms. Maina expressed Kenya is committed to the implementation of the AfCFTA so that the business people can aid from the readily unrestricted single market for goods and services under AfCFTA.
“My ministry is keen to work with negotiators from across Africa towards the development of flexible and progressive trade rules that promote deeper market access for African produced goods and services while ensuring that AfCFTA does not get stuck in endless negotiations,” she remarked.
In his remarks, the Director, Regional Integration and Trade Division at the United Nations Economic Commission for Africa (UNECA), Dr. Stephen Karingi expressed that UNECA has partnered with Kenya to implement measures that will foster improved and efficient trade amongst African countries under the AfCFTA and negotiations in trade in goods and trade in services.
He stated final drafts of negotiations in the areas of investment, competition, intellectual property, e-commerce, women, and youth in trade are predicted to be complete by September 2022.
Brief About AfCFTA Strategy
AfCFTA is a game changer and an essential engine of economic development and industrialization for sustainable growth. The Agreement enables country specialisation in sectors with relative advantage, economies of scale, structural transformation, and the creation of a continental single market of around 1.2 billion people and a combined GDP of over US$ 2.5 trillion.
This process is to leverage deeper integration within the framework of the African Continental Free Trade Area (AfCFTA) to enable an increase of Kenya’s trade and investment in Africa, support structural transformation, and foster economic growth and sustainable development.
The Strategy is anchored within Kenya’s national trade and development frameworks and desires to contribute toward national growth. This will be accomplished through securing markets for goods and services within the African region, promoting value addition and the diversification of products in those markets by leveraging the protection of intellectual property rights, forming conditions for improved participation of MSMEs, women, youth, and persons with disabilities in trade and investment, and encouraging ‘safe trade’ with mitigating interventions on the result of COVID-19.
Implementation Strategies of AfCFTA
The mission of the National AfCFTA Implementation Strategy is to help Kenya's trade and investment with the AfCFTA states parties in order to support inclusive economic development and sustainable development.
The Strategic purposes of this National AfCFTA Implementation Strategy include: -
Promote safe, secure, and effective trade in goods and services within the AfCFTA;
Improve Kenya’s productive capacity and the competitive advantage of domestic producers
and exporters under AfCFTA;
Create a strong institutional and regulatory framework to support the effective implementation of the AfCFTA Agreement;
Promote inclusiveness (women, youth, persons with disabilities) and the active participation of MSMEs in leveraging
opportunities under AfCFTA for sustainable development;
Create a comprehensive and efficient common national approach to continental integration and increase awareness around
AfCFTA for all stakeholders; Provide adequate and timely financing for strategy implementation; and
Contribute to sustainable development through mutually supporting trade and environmental initiatives
Economic Opportunity under AFCFTA Trade Strategy
The launch of the Kenya AfCFTA National Implementation Strategy is one of the critical action parts of the EU-funded project: 'Deepening Africa's Trade Integration through Effective Implementation of the AfCFTA to help Economic Integration' with a total budget of € 8 million. Kenya is one of the seven countries that have been selected to begin trading under the AfCFTA framework in a pilot stage to test the environmental, legal, and trade policy basis for intra-African trade.
The AfCFTA furnishes the opportunity for Africa to create the world's largest free trade area with the potential to unite more than 1.2 billion people in an economic partnership with a gross domestic product valued at least $2.5 trillion and usher in a new era of growth.
This policy strives to consolidate government efforts around investment promotion and support the promotion of investment not only for economic development but for inclusive growth and sustainable development. In line with Kenya’s openness to private investment, investment incentives are open to a broad array of sectors and the Kenya Investment Authority publishes only limited sectors. However, growing green investments has been specifically prioritised.
Kenya’s Preference Sectors for Export
Kenya’s export development and promotion efforts are articulated in Kenya’s INEDPS, which furnishes a value-chain approach to develop and diversify Kenya’s exports and export markets. The INEDPS strategy determined six sectors of focus for goods and eight sectors of focus for services where Kenya has a relative export benefit and furnishes potential export markets. Furthermore, each priority sub sector provides a situational analysis and outlines requisite strategic interventions. Annex 3 provides a mapping of priority sectors with priority countries.
These policy papers, directives, and strategies contain the following: National Industrialisation Policy (2012), Special Economic Zones Act (2015), Kenya Industrial Transformation agenda (2015) Purchase Kenya Build Kenya Strategy (2017), and a Sessional paper No. 1 of 2022 on National Automotive Policy among others. Also, within Kenya’s Big 4 Agenda, manufacturing is critical and the following eight priority areas have been determined: textile and apparel; leather; agro-processing; building materials; oil, mining, and gas; iron and steel; ICT and fish processing.
“With this National Strategy, Kenya is willing to take advantage of the newly unrestricted continental market. Already Africa is Kenya’s main market, leading by around 42 percent of its share of exports in 2020, surpassing the traditional European and Asian markets in previous decades,” stated Dr. Karingi. He added that Kenya’s membership with the East African Community (EAC) also plays a critical role in trade, integration, and economic development with the neighbouring countries, and will utilise AfCFTA to access untapped markets.