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Kenya among six states to pilot AfCFTA, lists 14 sectors for trade

The country, alongside Ghana were the first to ratify the deal.

In Summary

•To date, 54 African Union (AU) member states have signed the AfCFTA agreement with 49 having ratified it, making them eligible to trade.

•Ghana, Cameroon, Egypt, Rwanda, Tanzania and Kenya are the six countries set to pilot the agreement.

Deputy Head of Delegation, EU Delegation to Kenya Katrin Hagemann, UN Resident Coordinator Stephen Jackson and Industrialization CS Betty Maina, during the launch of the Kenya National AfCFTA Implementation Strategy and the unveiling of the National Implementation Committee/HANDOUT
Deputy Head of Delegation, EU Delegation to Kenya Katrin Hagemann, UN Resident Coordinator Stephen Jackson and Industrialization CS Betty Maina, during the launch of the Kenya National AfCFTA Implementation Strategy and the unveiling of the National Implementation Committee/HANDOUT

 Kenya has listed 14 merchandise and service sectors for trade under the African Continental Free Trade (AfCFTA), as it becomes among the first six to pilot the continental pact.

This, even as countries push to clear pending issues on preferential Rules of Origin on sensitive goods which account for seven per cent of the tariff lines.

The stalemate is on textile and apparel, sugar and sugar products, goods produced in Special Economic Zones (SEZs), edible oils and motor vehicles.

Nevertheless, the country is raring to go as member states have agreed on 88.7 per cent tariff lines of about 6,000 products, open for trade on preferential terms.

Kenya and Ghana were the first countries to ratify the AfCFTA and to deposit instruments of ratification with the AU Commission, after the agreement was adopted by the AU Extra-Ordinary Summit on March 21, 2018 in Kigali, Rwanda.

Despite the launch of the commencement of trade in January 2021, commercially meaningful trade was yet to commence.

The cause of the delay was mainly attributed to not only the Covid-19 pandemic which delayed the conclusion of negotiations, but also the delay in the conclusion and submission of tariff offers by countries.

To date, 54 African Union (AU) member states have signed the AfCFTA agreement with 49 having ratified it, making them eligible to trade.

However, only six countries– Ghana, Cameroon, Egypt, Rwanda, Tanzania and Kenya are leading the pact in the pilot phase, with volumes expected to move as early as October.

Industrialization, Trade and Enterprise Development CS Betty Maina yesterday said Kenya’s prioritised sectors in merchandise trade include agriculture, livestock and fisheries, manufacturing, handicrafts, mining, oil and gas.

Priority export sectors under services trade are business including professional services, tourism, education, health, financial services, ICT, cultural and sports services; and transport and logistics.

These priority sectors are aligned with Kenya’s national development goals and aspirations including the Integrated National Export Development and Promotion Strategy (INEDPS) and the Big Four Agenda,” CS Maina said.

She spoke during the official launch of the Kenya National AfCFTA Implementation Strategy and the unveiling of the National Implementation Committee.

The initiative is supported by the United Nations Economic Commission for Africa and the European Union, and is part of the requirements.

To commence trading under the AfCFTA, the AfCFTA Initiative on Guided Trade was formulated and endorsed by the 9th Meeting of the Council of Ministers responsible for trade held last month in Accra-Ghana.

“The initiative is made up of State Parties that are willing and ready to trade amongst themselves and have met the minimum threshold for the start of commercially meaningful trade,” Maina said.

Member states are expected to iron out pending issues under the remaining seven per cent (on sensive goods) by September, United Nations Economic Commission for Africa director, Stephen Karingi, noted.

“Generally countries can begin trading,” Karingi said.

The EU has committed to help address gaps in continental connectivity where lack of roads, flight connections and coastal shipping have been identified as challenges.

Deputy Head of Delegation, EU Delegation to Kenya, Katrin Hagemann said 11 trade corridors will be supported with €1 billion (Sh121.3 billion) in grant funding.

“For Kenya and the wider East African region, an amount of 100 million euro (Sh12.1 billion) will be made available for investment into the Northern Corridor,” Hagemann said.

Kenya is confident that the implementation of the AfCFTA trade pact has the potential to unlock market access for our goods and services within the African continent, while creating numerous job opportunities across multiple sectors and industries.

As it stands, statistics show that the AfCFTA creates a large single market with a population of over 1.2 billion people and a combined GDP of about US$ 2.5 trillion (Sh 303.2 trillion).

Despite the significance of trade, Africa’s share of the total global trade remains low at 2.8 per cent.

In addition, the share of intra-African trade has been limited at 18 per cent.

CS Maina sais Kenya is committed to the implementation of the AfCFTA so that businesses and traders can benefit from the readily available single market for goods and services under the AfCFTA.

“I urge the private sector and the business community at large to seize the opportunities created by the AfCFTA, and dialogue with my Ministry on a regular basis when faced with challenges that diminish gains made,” she said. 

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