Recently, Kenya was selected among several countries that would initiate trading under the African Continental Free Trade Agreement (AfCFTA). The pilot phase is meant to test environmental, legal and trade policy basis for intra-African trade.Trading under the AfCFTA provides great opportunities such as a combined borderless market of approximately over 1.3 billion people, large economies of scale, regional value chains and diversification of export markets among others.
To facilitate trade under the AfCTA, an implementation strategy, the National AfCFTA Implementation Strategy (2022- 2027), was developed. The Strategy aims at fast tracking Kenya’s trade and investment expansion in the region, structural transformation, economic growth and sustainable development. The Strategy, similar to Regional Economic Communities, outlines prioritised AfCFTA sectors for merchandise goods, services and regional value chains that build on sectors identified under Kenya’s Integrated National Export Development and Promotion Strategy (INEDPS) and the Big Four Agenda. Some of the sectors identified under INEDPS and the Big Four Agenda include; manufacturing, agriculture, mining and fishing industries, ICT, trade in finance amongst others.
The Strategy outlines its specific goals to include: consolidating, diversifying and expanding Kenya’s exports to Africa and ensuring Kenya’s manufacturing sector real value-added increases by 5% pa. Under the INDEPS, manufacturing has been assigned by the government a 15% contribution in GDP by 2022, up from the 2017 level of 8.3%. Certain key drivers and enablers have been developed to enable the manufacturing sector attain its goals. For instance, actualization of the Strategy’s specific goals includes rebounding of domestic exports following tariff liberalisation in non-LDC African countries for products such as fresh vegetables, floriculture, coffee, tea, soap, detergents, textiles, and apparel among others.
AfCFTA National Implementation Committee (NIC)
The Strategy also provides for a coordination, communication, monitoring and evaluation plan of AfCFTA implementation. It establishes an AfCFTA NIC which comprises members drawn from Ministries, Departments and Agencies (MDAs); Council of Governors; private sector associations; relevant academic and research institutions and NGOs. NIC’s functions include implementing AfCFTA Agreement and Strategy and managing associated risks and mobilizing sufficient financing for the Strategy implementation amongst others.
NIC’s communication strategy includes national sensitisation of the scope of AfCFTA Agreement and status of operationalisation; AfCFTA’s implications to Kenya; econometric modelling results for Kenya and arguments in favour of AfCFTA. Similar sensitisation campaigns will be conducted in private sectors focusing on the benefits to African businesses; trade and business opportunities within AfCFTA countries for various commodities and services; market access requirements in priority countries and commodities and services.
Sensitisation for civil society organisations will be focused on AfCFTA’s impacts on pertinent issues related to free movement of people, the environment and food security. Targeted sensitisation campaigns for youth and women involve around focus areas such as youth and gender-focused business opportunities and supportive trade facilitation measures.
NIC also hopes to involve external stakeholders such as Kenya’s diplomatic missions abroad, foreign governments, foreign diplomatic missions in Kenya, foreign country civil society organisations, economic and commercial operators as well as regional, continental and international organisations amongst others. Messages for such external players will focus on advancing Kenya’s interests and participation within AfCFTA.
NIC’s monitoring and evaluation strategy for the identified specific goals will involve quarterly and annual reporting. The quarterly reports will benchmark actual performance over set targets on key indicators whereas annual reports will provide robust assessment detailing challenges, lessons learned and recommendations moving forward. The Strategy proposes to carry out evaluation every 5 years on the basis of relevance, effectiveness, efficiency, impact and sustainability.
Going forward, Kenya is set to benefit immensely from trading under the AfCFTA, NIC has its work set for it and it would be keen to monitor their implementation of the Strategy.