AFCFTA: Kenya will extend trade to 54 countries

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With the ratification of the African Continental Free Trade Area (AFCFTA) Agreement, Kenya will be able to extend its trade foothold into all the 54 African nations beginning July.

Parliament of Gambia last week ratified the agreement thus paving the way for its enforcement.

The West African country became the 22nd to ratify the agreement making AFCFTA meet the minimum threshold needed to make it operational.

According to the chairperson of the African Union Moussa Mahamat, the approval by Gambia marked the legal threshold for the historic agreement to enter into force.

AFCFTA was first signed on March 21, 2018 by 44 countries in Kigali, Rwanda, making it one of the largest trading blocs since the formation of the World Trade Organisation.

To date, the pact has been signed by 52 African countries.

Last May, Kenya and Ghana became the first countries to hand over to the African Union Commission documents ratifying the free trade deal.

On coming into force, the AFCFTA sets a centre stage for Kenya to grow its exports from 2.8 per cent in 2017 to an average of 25 per cent by 2022.

This is according to the Integrated National Exports Development and Promotion Strategy unveiled last year aimed at growing exports.

Leather and footwear, medical equipment, plastics, furniture, food,and beverages are listed among the top targeted sectors in the government led export promotion strategy.

With the new deal, local industries will be able to access a market of over 1.2 billion people with a cumulative gross domestic product of more than $3.4 trillion.

Latest data compiled by the Central Bank of Kenya show Kenya exports earnings from Africa in 2018 dropped 3.8 per cent to Sh216.14 billion compared to Sh224.86 billion reported in 2017.

Imports value on the other end grew 2.65 per cent to Sh206.02 billion in 2018 down from Sh200.54 billion over the corresponding period in 2017.

The regional deal further seeks to remove tariffs on 90 per cent of goods produced within the continent and phase out the levy in the future.

According to the United Nations Economic Commission for Africa, the AFCFTA has potential to boost intra-African trade by more than 50 per cent if import duties and non-tariff barriers are eliminated from the economic bloc.

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https://www.the-star.co.ke/business/2019-04-08-export-market-to-expand-as-regional-trade-pact-comes-to-force/