Export commodities such as coffee, tea, sisal, cotton, pyrethrum and horticulture produce are Kenya’s key sources of foreign exchange. Highly regarded in the international market, the commodities are key in deepening rural development and wealth creation among farmers.  However, performance dipped following imposition of external conditions –Structural Adjustment Programmes (SAPs) by the World Bank and International Monetary Fund (IMF) in the early 1980s, followed by poor management. Our writer NICHOLAS WAITATHU engaged the Agriculture and Food Authority acting Director General ANTHONY MURITHII on what the Government is doing to restore the sub-sector. Experts:  Question: Explain the current performance of export commodities – coffee, tea, sisal, cotton, pyrethrum and horticulture products - compared to the last three decades. Answer: Different crops have undergone unique growth trends, opportunities and challenges. Others have recorded phenomenal growth in production, while some have registered a worrying decline. Reasons for growth/decline can be attributed to a combination of factors, both global and local. Tea and horticulture have maintained an upward growth trajectory over the years, while coffee, pyrethrum and cotton have experienced significant decline. Q: Do these commodities still enjoy a good reputation in the global market amid declining production and climate change shocks?  A: Despite the decline in production, Kenyan coffee is highly sought after in the global market on the account of its quality. The challenges that the sub-sector has faced are mainly local, including poor governance in the value chain. It is these challenges that are being addressed through the ongoing reform process. Q: Do you think Kenya can reclaim...

The World Bank has said in a new report that corruption and red tape are some of the factors that are turning Kenya into a graveyard for start-up businesses. Other factors turning Kenya into an innovation desert, to paraphrase the words of South Sudanese poet Taban Loli Yong, include entry barriers, large presence of State-owned enterprises (SOEs) and State-linked enterprises, and high levels of informality. The government has also been borrowing heavily, thus crowding out the private sector and making it difficult for small businesses to get credit. Instead, Kenya’s productivity continues to be driven by incumbent, mostly large firms and farms, some which have been around since independence. This damning report comes at a time when many Kenyans are eager to start businesses after being rendered jobless by the Covid-19 pandemic. These people need to be supported by the government through an enabling business environment for them to thrive. Ironically, the country has made major steps in easing the business environment, according to a World Bank ranking. In his seventh State of the Nation address, President Uhuru Kenyatta noted that Kenya had made an 80-slot improvement since 2014, with the country currently ranked 56th globally and ranking third in sub-Saharan Africa on the Ease of Doing Business Global Ranking Report. This is from a low of 136th globally in 2014. The president noted that Kenya now ranks first in protecting minority investors and fourth globally on getting credit. Last year, while Covid-19 was still raging, Uhuru added that the...

MON 18 JAN, 2021-theGBJournal- The Nigeria Office for Trade Negotiations (NOTN) has outlined requisite steps for Nigerian exporters gearing to begin exporting to other African Continental Free Trade Area (AfCFTA) countries as member states kick-start trading activities. NOTN the institutional framework and foundation for Nigeria’s trade policy infrastructure, leads, manages and co-ordinates all trade negations for Nigeria. According to NOTN, exporters or agent must secure all necessary licences, permits, certificates and necessary documents from relevant agencies like NEPC, SON, NAFDAC, NAQS and others and ensure that the product qualifies for export under AfCFTA. Next step is to create a bill of entry, attach all relevant permits from government agencies and secure reservation with shipping or airline company and apply for Nigeria Customs Service, AfCFTA Certificate of Origin after paying a fee. NOTN said, the Nigeria Customs Service is the issuer of the certificate, ‘’however, NACCIMA must vet the application.’’ Other accompanying documents required for shipment under AfCFTA trading activities include certificate of origin, Nigeria Customs Bill of Entry, Bill of Lading, Commercial Invoice, Packing list, and Certificate of analysis. The Trade Negotiation Office also listed Supplier/Producer’s declaration form, Origin of Declaration form, and Certificate of Origin as the compulsory trading documents. President Muhammadu Buhari on Sunday, 7th July, 2019, at the 12th Extraordinary Summit of African Union (AU) Heads of State and Government, in Niamey, Niger Republic, signed the agreement establishing the African Continental Free Trade Area (AfCFTA), involving 54 countries. The AfCFTA aims to create a single continental market...

The coronavirus has emphasised the importance of the agriculture sector in South Africa and across Africa because of its potential to support economic growth, create and sustain jobs and boost exports. At a time when most industries will be reducing employment, it is hoped that agriculture will at least maintain employment in primary activities. Agriculture has kept employment levels going because by nature, it is a labour-intensive sector, employing for example nearly 900 000 people in SA directly. There are many agricultural sectors that are increasing employment now, although seasonal, such as the fruit export sector. We have clients that are currently expanding employment to cater for seasonal expansion. Another reason why agriculture must be emphasised is because of its employment ability – agriculture on a commercial level has a strong employment multiplier. This will assist in alleviating poverty and even the establishment of new businesses and investment. It is a proven fact that food production and availability is of strategic importance to any country, but this crisis has shown the importance of being food secure, meaning being able to produce the bulk of your staple food requirements. What is important is not only the production of food, but also the logistics and supply chain to make this food available at affordable prices throughout a population. In this regard the role of the informal sector is being illuminated. There is a complex supply chain in the informal sector, the importance of which is becoming increasingly apparent. In this respect, future...

Towards the end of 2020, Washington Post asked its readers to describe the year in a single word. The responses were as comical as they were insightful. From the hundreds of feedbacks received, “exhausting”, “lost” and “chaotic” came top as the most popular descriptions. The three words are reflective of the trouble the global community had to stumble through in the year. Individuals were drained and exhausted as they struggled to cope with the new normal and bear the brunt of the additional financial burden that came along. For students, other categories of people and even businesses whose ‘lives’ were paused, it was nothing short of a lost year. One could only marvel at the speed which the strange virus threw countries, businesses and individuals into unprecedented pandemonium. Perhaps, “chaotic” was the most suitable description but “exhausting” won the word-popularity contest. And by mid-2020, it was already clear that 2021 would be a transitioning year. Certainly, the COVID-19 will continue to change the social landscape and human relations but the character of the new world it will unveil, many experts have argued, is still fluid and uncertain. Hence, a mathematician, perhaps, would label 2021 as undefined. To show that the world is not ready to bet in 2021, economic projections (by most credible institutions) are largely conditioned by the character of the new strain of COVID-19, global response to the second wave as well as vaccine logistics/distribution. For instance, the World Bank, last week, projected global economic growth of four...

On 1st January 2021, trading under the African Continental Free Trade Area (AfCFTA) Agreement commenced after months of delays caused by the COVID-19 pandemic. The AfCFTA aims to bring together 1.3 billion people in a $3.4 trillion economic bloc, making it the largest free trade area since the establishment of the World Trade Organization. Ghana is hosting the AfCFTA Secretariat in its capital city, Accra. A pathway to achieving development goals If African countries enhance competitiveness through trade and create more efficient regional value chains and labour markets, as envisaged in the AfCFTA Agreement, they would increase momentum towards implementing the 2030 Agenda for Sustainable Development. Poverty and inequality would be greatly reduced through sustainable structural transformation that prioritizes reaching those farthest behind. In addition, the expansion of choices and capabilities for women and youth through intra-Africa trade and interconnectivity would help to achieve several goals under the Agenda 2063 of the African Union, including Goal 4 on transformed economies through sustainable and inclusive economic growth, Goal 17 on full gender equality in all spheres of life and Goal 18 on engaged and empowered youth and children. The AfCFTA as a driver of structural transformation and job creation The AfCFTA could transform Africa's economic landscape and create productive opportunities. The potential increase in manufacturing jobs, commercial enterprises and agribusinesses could change the lives of millions of women and youth who often face higher levels of unemployment and are overrepresented in vulnerable jobs. According to the United Nations Economic Commission for...

SSCBT is important on informing policies for poverty reduction and inclusive growth The future for many Africans is uncertain as the world continues dealing with the Covid-19 pandemic whose increase and mutation is necessitating lockdowns in different parts globally. Majority of the affected millions are now either out of work or in limbo since some companies have opted for extended unpaid leave for their employees instead of laying them off. Accordingly, the Covid-19 pandemic has potential far-reaching and multifaceted indirect impacts on societies and economies. These effects could last long after the health emergency is over. The extended negative effects of the pandemic could aggravate existing instabilities or crises, or lead to new ones with repercussions on individuals’ emotional and economic wellbeing, food security, and livelihoods. With this reality, though, there are several opportunities that African governments should exploit to ensure that they cushion their people, especially the very vulnerable, from the suffering that the pandemic is leaving in its trail. While the short term interventions are welcome, there is more that can be done on the continent to ensure the sustainability of livelihoods. According to the Africa Investment Forum (AIF), domestic manufacturing is a path to expand intra-continental trade while also reasserting Africa’s position in global markets. The role of the private sector cannot be underestimated especially with the rolling out of the African Continental Free Trade Area (AfCFTA). For Foreign Direct Investment (FDI), investors should not view Africa as a single market. AIF’s Senior Director Chinelo Anohu says...

The Government has started training traders in border counties to promote Cross-border trade among East African Community (EAC) member states. The training according to the government is aimed at addressing lack of information which is one of the impediments to inter-country trade. The Government is currently training more than 60 focal persons representing various business groups in Homa Bay County to achieve the objective. Speaking during one of the training in Homa Bay town, East African Community Principal Secretary Kevit Desai said the main obstacle which impedes EAC cross-border trade is lack of information by Kenyan traders. He cited lack of awareness on goods and services allowed by each country, standards and certifications required, taxes, import and export laws of each EAC member state. Desai who was accompanied by Deputy Governor Hamilton Orata said many traders had failed to undertake cross border trade due to lack of such information. “We realised that there are many traders with interest in exporting or importing goods from an EAC member state but they cannot do it due to lack of information,” said Desai. He said the government is committed to demystifying the obstacles to increase the number of Kenyan traders who want to venture into cross-border trade. The efforts also include opening more business opportunities and harmonising legal restrictions to enhance freedom in trade. “The cross-border trade creates markets for a number of goods produced locally,” he said. Orata said the county government’s department of trade will continue training more traders on the...

There is tremendous economic growth potential for agricultural enterprises in East Africa, but expansion depends on their receiving appropriate support – including training on how to be climate-smart. Joseph Muhwanga and Teferi Demissie report. This is one of a series of blogs on ‘Accelerating adaptation action in Africa’ published by CDKN to frame the Africa segment of the Climate Adaptation Summit, January 2021. The role of MSMEs in East African economies For African countries to achieve meaningful and sustainable development, the role of the private sector and its need for enhanced, adaptive capacity in the face of climate change is undeniable. Many micro-, small- and medium-sized enterprises (MSMEs) are less likely to have adequate capacity to take the necessary measures needed to adapt to the potential risks and opportunities presented by climate change. Yet involving MSMEs is crucial as a source of employment, economic growth, social transformation and building resilience to climate change. The definition of MSMEs varies slightly per country but the main parameters used are the number of people employed and turnover per year.  In Kenya, the official definition of MSME is based on employment numbers whereby a) micro-enterprises have fewer than 10 employees, b) small enterprises have 10- 49 employees and c) medium sized enterprise have 50 to 99 employees.  In Uganda, micro-enterprises employ up to 4 people and have turnover or total assets not exceeding US$ 2690, Small enterprises employ 5-49 and have turnover or total assets of US$ 2,690 -26,906 and medium enterprises employ 50-100, with total...

After getting delayed by eight months because of the global Coronavirus pandemic, the African Continental Free Trade Area (AfCFTA) was launched belatedly on New Year’s Day this year. Ethiopian Airlines partnered with DHL and African Electronic Trade Group to transport the first batch of parcels traded under this much anticipated free trade area agreement. In a statement, the partners hailed the effort as one that will “welcome the start of trading of the African Continental Free Trade Area with its 1.3 billion people and an estimated GDP of [USD] 3.4 trillion.” The AfCFTA, the largest in the world, garnered the signatures from 30 of the 55 nations on the continent surpassing the threshold of 22 signatories to be ratified. The objectives of the agreement include creating a single continental market for goods and services - with free movement of goods, people and investments - and thus, paving the way for an accelerated establishment of the Continental Customs Union. The ultimate vision being to further expand intra-African trade through better harmonization and coordination of trade liberalization and facilitation regimes and instruments across Regional Economic Communities (RECs). Resolving the challenges of multiple and overlapping memberships and expediting the regional and continental integration processes and enhancing competitiveness at the industry and enterprise level is also to be the principle that will guide the historic agreement. This is to be achieved by exploiting opportunities for scale production, continental market access and better reallocation of resources. The AfCFTA is said to bring about much more...