An experts’ meeting to review Kenya’s implementation strategy for the African Continental Free Trade Area (AfCFTA) is ongoing in Mombasa to discuss a range of sectors that could help the country benefit from the agreement.
About 40 experts are attending the four-day meeting organized by the UN Economic Commission for Africa (ECA) in collaboration with other partners.
A study conducted by Trademark East Africa (TMEA) and ECA forecasts the trade treaty will lead to significant diversification of East African economies, a $1.1 billion boost in inter-regional trade, creating more than two million jobs.
According to TMEA, one of the partners, the AfCFTA holds great potential for Kenya, which already exports 40 per cent of its total exports within the continent.
Speaking on behalf of ECA in Eastern Africa, Geoffrey Manyara recalled that liberalisation of trade under AfCFTA will harbour great benefits for Kenya and East Africa at large.
“Everyone will gain, including small and medium-sized enterprises (SMEs)” Manyara said.
Earlier this month Kenyan stakeholders ended another review meeting on the same implementation strategy in Naivasha after incorporating new components with wide ramifications for the economy.
They included topics such as e-commerce, climate change and Covid-19, which since last year disrupted production and trade flow across the world, to enable the East African country to derive maximum benefits from the agreement.
Frank Matsaert, TMEA CEO, on Tuesday, said that for the full benefit of the trade deal to be realised, it is essential that Kenya prioritizes key and high potential sectors and markets and backs it with a well-thought-out action plan and strategic interventions.
Gladys Kinyuah, the deputy director for International Trade at the Kenya Ministry of Industrialisation, Trade and Enterprise Development said Kenya is already focused on implementing the agreement by taking into consideration the recommendations by the private sector.
Trading under the pact commenced on January 1 after a postponement for six months as a result of the pandemic and Kenya is one of the 36 member-states to have so far ratified the AfCFTA treaty as 54 member States have signed it.
The agreement provides an opportunity for Africa to create the world’s largest free trade area with the potential to unite more than 1.2 billion people in a $2.5 trillion economic bloc and usher in a new era of development.
The latest report by ECA on progress made on regional integration in the context of the COVID-19 pandemic shows African countries continue to trade more with the outside world than among themselves.
The report was presented during the 39th ECA Committee of Experts of the Conference of African Ministers of Finance, Planning and Economic Development revealed that the European Union is taking the largest share of the market accounting for 29.8 per cent of total trade in 2018.
The trend is, however, changing following Brexit and also due to increasing trade between China and Africa.
The report shows that in 2018, Africa accounted for only 2.6 per cent of global trade, which is a slight increase from 0.2 per cent in 2017.
Intra-African trade increased to 16.1 per cent in 2018 ($159.1 billion), up from 15.5 per cent in 2017. Globally, output slightly decreased to 3.6 per cent in 2018 from 3.8 per cent in 2017.
While progress continues to be made in pursuit of the continent’s regional integration agenda throughout the eight Regional Economic Communities (RECs), challenges to the achievement of deeper integration remained.
In particular, most RECs and member states are struggling to achieve progress in the area of productive integration.
According to the report, the Arab Maghreb Union (AMU) and East African Community (EAC) are taking the lead in productive integration, with index scores of 0.449 and 0.434, respectively, while ECOWAS is the least integrated regional bloc in the productive integration dimension, with an index score of 0.220.
Despite the low performance of the majority of the RECs on productive integration, there were several initiatives being carried out to improve the situation, including some that are supported by ECA.
Economic Community of Central African States (ECCAS) and EAC are the highest-performing communities in terms of macroeconomic integration, with scores of 0.684 and 0.660, respectively, on the index.