Kenya could triple export revenues if the newly signed continental trade agreement is fully embraced.

This will bring Sh1.53 trillion in revenues from trade, with the signing of the Africa Continental Free Trade Agreement, Kenya Association of Manufacturers has said.

“Local manufacturers are open to the possibilities. Our exports are more than Sh510 billion and this can be tripled,” KAM chief executive Phyllis Wakiaga told the Star.

Last month, President Uhuru Kenyatta joined 43 other African heads of state to sign a new trade agreement aimed at absolving tariff and non-tariff barriers that have hindered intra-Africa trade for  years. The trade pact includes Protocol on Trade in Goods, Protocol on Trade in Services and Protocol on Dispute Settlement.

Signatory states will commit to absolving tariffs on 90 per cent of goods with 10 per cent of “sensitive items” to be phased out after further deliberations. It will also address licensing rules and quotas presented in non-tariff barriers.

“If we want to develop through trade as a continent this is one of the issues we must address. We must abolish tariff and non-tariff barriers that hinder successful trading between our countries,” Wakiaga said.

Kenya is already a member of COMESA free trade area as well as the EAC customs union where originating goods, which certify the rules of origin, are already being traded at zero tariffs.

Trade PS Chris Kiptoo earlier told the Star that the country had already removed 37 per cent of total tariffs under the EAC Common External Tariff meaning that Kenya has about 53 per cent to effectively remove on total tariffs.

“The AfCFTA also provides for mechanisms on addressing non tariff barriers which has been a major hindrance to intra-African Trade,” he said.

Some of the sectors with a strong export capacity as named by Wakiaga include agro-processing, steel and metal sector, dairy sector, pharmaceuticals, textiles and rappels, flowers and milling products, health products, chemicals, paints and vanishes.

She added that the country can only attain maximum potential of the trade treaty after taking care of some of the in-house issues currently crippling the manufacturing sector.

They include, VAT refunds, over-regulation, high domestic levies, high cost of electricity, reduced IDF for raw materials and excessive excise duties. Others are railway development levy for exporters and harmonised county levies for manufacturers in all 47 Counties.

“We need to address issues affecting healthy competition for local manufacturers such as high taxation, reduced bureaucracies in transporting goods and raw materials, reduced Non Tariff barriers that compromise transport efficiencies,” Wakiaga said.

Source: The Star

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