THE government plans to cut tariff levels, reduce licensing requirement and eliminate price controls in a new measure to make Kenyan goods competitive in the regional and international markets.
This is under the national trade policy currently in its final edition, which targets to reduce Non-Tarrif Barriers and promote Small and Medium Enterprises, a measure that will help the country improve its balance of trade, which heavily favours imports.
According to government, NTBs in export markets coupled by bureaucracies remain a major constraint to international trade, denying the country the 10 per cent economic growth preference.
The policy that underwent a stakeholders discussion on Friday also seeks to review regulatory requirements especially on the retail sub-sector, which has made the cost of doing business remain high.
“We need to take a bigger share of the regional market. We are dealing with bureaucracies that are denying us from accessing regional and global markets,” CS Industry, Investment and Trade Adan Mohamed said.
This comes even as informal cross-border trade continues to grow, with unrecorded trade mainly foodstuff estimated at between 40 per cent and 50 per cent, a move that denies government revenue.
The share of trade in goods in total GDP is averaged at 43 per cent, with the Common Market for Eastern and Southern Africa accounting for 16 per cent of Kenya total exports.
“Application of non-tariff barriers, increased levies and charges at county level is making business uncompetitive,” Mohamed said.
He also blamed strict control of movement of food items across borders, which is undermining efforts by East African countries to even out regional trade and build a monetary union.
The country’s business community also faces inadequate infrastructure, cumbersome imports and exports procedures and inadequate compliance with international standards requirements.
EAC records show informal cross-border trade in foodstuff is estimated at 40 per cent to 50 per cent of total trade.
Kenya Private Sector Alliance CEO Carole Kariuki said proper measures need to be put in place, if the policy is to succeed, which will boost investments at county level.
“60 per cent of retail trade development is at SMEs level. The new policy will unlock potential for trade,” she said.