Kenya could slowly be losing its strategic lead in East Africa due to the changing geopolitics and the newfound unity between Ethiopia, Eritrea and Somalia. Analysts suggest Kenya needs to adjust its foreign policy in light of Ethiopian Prime Minister Abiy Ahmed Ali becoming the regional point man to fix problems ranging from the Kenya-Somalia maritime dispute to the conflict in Sudan. TRADE HUB As an important trade hub for landlocked countries, Kenya has maintained its the middle-of-the path stance taken during the Cold War under the Non-Aligned Movement. As a result, Kenya has kept its allies like the US and China in investments, leadership of international organisations and tackling threats like terrorism, climate change and HIV/Aids. In 2014 Kenya developed its first written foreign policy since Independence in 1963, with five main pillars — peace diplomacy, economic diplomacy, diaspora diplomacy, environment diplomacy and cultural diplomacy. However, Kenya’s peace diplomacy is being overshadowed by organisations like the Intergovernmental Authority on Development (Igad) with Prime Minister Abiy as its chairman. According to Abdiwahab Sheikh Abdisamad, director and senior consultant at Southlink Consultants and a Horn of Africa political scientist at Kenyatta University, oil multinationals are lobbying for Somali interests in their own countries. He added that Kenyan foreign policy towards Somalia needs restructuring since the fight against Al Shabaab has attracted new stakeholders, with the Gulf crisis spilling over into Somalia. “Kenya should side either with the Saudi-led coalition or the Qatari and Turkey alliance. To date, Kenya has not sided...

Trade, Principal Secretary Chris Kiptoo says the summit provides a platform to take stake stock of the gains made following the adoption of Integrated National Export Development and Promote Strategy. The strategy prioritizes 23 sectors among them industry, agriculture and tourism which are key in boosting intra African trade as well as create an avenue for Business connections among Africa member states. The current intra-Africa trade fluctuates between 15 and 18 per cent and efforts to boost this and tap the 3.4 trillion dollars market are on the rise. The trade summit is expected to not only provide a platform for stakeholders involved in trade to showcase the best in the region but also exchange ideas on the current state of play in trade. Kenya will be looking to expand its export values as well as diversify its products under the buy Kenya build Kenya initiative as well as E-commerce. Kenya currently is doing almost 6 billion dollars of export which is about 8 percent of the GDP. Kiptoo says the summit will provide an opportunity for participants to deliberate on the economic diplomacy in the contest of the regional blocs that include EAC, COMESA, TFTA and AfCFTA. The Economic Commission for Africa suggests that the AfCFTA has the potential both to boost intra-African trade by 52.3 per cent by 2022 by eliminating import duties by 90 per cent, however only 22 members have ratified the agreement Source: KBC

The AfCFTA will be governed by five operational instruments: the Rules of Origin; the online negotiating forum; the monitoring and elimination of non-tariff barriers; a digital payments system and the African Trade Observatory. Each one was launched by different Heads of State and Government that included President Cyril Ramaphosa of South Africa, President Abdel Fattah El Sisi of Egypt who is current Chairperson of the AU; Mr. Moussa Faki Makamat, the Chairperson of the African Union Commission; and President Mahamadou Issoufou of Niger, who is the Champion of the AfCFTA. The launch ceremony included “a roll call of honour”, at which the 27 countries that have ratified the instruments of the AfCFTA were announced, and those that have signed but not yet ratified were mentioned. A commemorative plaque of the signing was also unveiled. The AfCFTA agreement was adopted and opened for signature on 21 March 2018 in Kigali. The AfCTA entered into force on 30 May 2019, thirty days after having received the twenty-second instrument of ratification on 29 April, 2019 in conformity with legal provisions. “The speedy entry into force of the AfCFTA is a source of pride for all of us”, said AU Commission Chairperson Mr. Moussa Faki Mahamat. He described the free trade agreement as one of the instruments for continental integration in line with the objectives of the Abuja Treaty and the aspirations of Agenda 2063. The Chairperson also highlighted the importance of peace building and security on the continent, adding that “it would be...

Kenya’s manufacturing sector is betting big on the proposed Africa-wide trade pact that will provide access to what has been described as the biggest market in the world. Nigeria became the latest member to sign the landmark agreement, which aims to increase trade among African countries. With Eritrea as the only African country not to be part of the trading bloc, the potential for the regional initiative to transform the economies of the member states looks pretty real. According to the Oxford Business Group, Kenya’s exports are projected to increase by over Sh10.2 billion ($100 million) following full implementation of the free trade pact. The group notes that with 41.2 per cent of Kenya’s exports destined for free trade pact member states in 2011, compared with the 13.4 per cent share of imports from the same zone, Kenya enters the bloc from a position of relative strength. Only 12 per cent of Africa’s trade is between countries, signifying the huge promise for participating countries. Kenyan manufacturers are banking on the agreement to take the lead in producing competitive products in terms of quality and prices. “The Continental Free Trade Area agreement provides an opportunity for Kenya to become a manufacturing hub for Africa,” said Kenya Association of Manufacturers (KAM) chief executive Phyllis Wakiaga. President Uhuru Kenyatta has been at the forefront in pushing for deeper trade ties among African countries, driven by the realisation that Kenya will reap massive benefits, particularly in efforts to achieve industrialisation. When he joined other...

Five months after the East African Community deferred signing the controversial Economic Partnership Agreement with the European Union, it has emerged that Tanzania’s unyielding stance could force a stay of the status quo as the EU is hesitant to push the region to sign a trade deal that threatens its cohesion as a bloc. Well-placed sources at the European Commission told The EastAfrican that the EAC negotiated and concluded a bilateral trade agreement with the EU as a bloc, and it must remain as such. “All EAC members need to sign and ratify the agreement,” said the EC sources. The EPA gives EAC products total access to the EU market, with 82.6 per cent of imports from the EU allowed into the EAC market. The remaining 17.4 per cent of imports from the bloc — labelled “sensitive,” and largely consisting of farm and dairy products — would be progressively liberalised within 15 years from when the agreement comes into force. Kenya and Rwanda have signed the deal. However, Tanzania is unhappy about the trade pact, arguing that the agreement will have serious consequences for its revenues and the growth of its industries. Burundi refused to sign given its deteriorating relations with Europe. Uganda argued that signing the pact as individual countries would compromise the unity of the region, hence its decision to wait it out. Kenya has been lobbying its EAC partners to enforce the EPA on an individual basis rather than as a bloc to allow those that have not signed...

Kenya plans to focus on the African continent to drive export growth, an official said on Thursday. Jaswinder Bedi, chairman of Export Promotion Council (EPC), told journalists in Nairobi that Kenya has a competitive advantage in manufactured goods as compared to most other African countries. “We see an opportunity to expand our export volumes by focusing on sale of manufactured goods to the rest of Africa,” Bedi said. Government data indicates that in 2018 approximately 40 percent of Kenya’s exports went to other African markets. “Most of Kenyan exports to Africa are value-added goods while exports to the rest of the world are mostly raw materials,” Bedi said. Kenya is likely to reap enormous benefits once the African Continental Free Trade Area (AfCFTA) is fully operational and tariffs are removed, he said. “At present non-tariff barriers in the form of product standards present a huge challenge to the expansion of Kenya’s outbound trade in Africa,” Bedi said. According to the EPC, poor transport infrastructure also hinders the growth of Kenyan exports to the rest of Africa. “Merchandise from Kenya often becomes noncompetitive when transported to landlocked countries in the continent,” Bedi said. Kenya’s export now accounts for 8 percent of its gross domestic product (GDP), against a target of 15 percent. The majority of Kenyan exports are agricultural products with little value addition, Bedi said. Source: County Dispatch

Each of the nearly 40 general insurance underwriters and members of the Association of Kenya Insurers (AKI) agreed during a consultative meeting held on Wednesday at the head office in Nairobi, to work with the Kenya TradeNet Single Window information processing system to relay all the marine cargo insurance and customs bonds to importers and the Kenya Revenue Authority respectively. Speaking after the meeting, AKI Executive Director/CEO Tom Gichuhi explained that the resolution was important for all the insurers to enhance efficiency and transparency of importation information processing, a major cog in the international trade wheel. “During the AKI General Insurance CEO’s forum, member underwriters unanimously agreed that effective immediately, customs bonds shall solely be processed through the KenTrade – National Electronic Single Window System portal in line with government policy,” said Gichuhi. Headed that the marine cargo insurance will continue to be processed through the Kenya TradeNet System online portal provided by Kentrade and connected to the Kenya Revenue Authority-driven online system. The KenTrade portals provide integration between Kenya Revenue Authority, the insurers and all stakeholders in the import, export value chain The AKI CEO said that the two portals were an important part of the marine cargo and customs bonds management and it was crucial for them to deliver a high, consistent rate of efficiency, cost transparency and effectiveness for Kenyan importers. This is on the back of enhanced legislation that has over the years consolidated information management processes for importers and reduced the cost of doing business....

Negotiations to restart development of deep water port ‘ongoing’, Mbelwa Kairuki says. Project was halted last month by African nation’s president over problems with terms of deal. Discussions are ongoing to get the China-backed US$10 billion Bagamoyo Port project in Tanzania, which was “suspended indefinitely” by the east African nation’s president because of disagreements over the terms, back on track, its ambassador to Beijing said on Thursday. The troubled project was “not off the table” and the remaining issues could be sorted after consultations between the Tanzanian government and investor China Merchants Port Holdings, Mbelwa Kairuki told reporters during a visit to Hong Kong. Of the 29 issues still to be resolved, four might require parliamentary action such as formulating a legal mechanism for the operation of the special economic zone alongside the port he said. “The Bagamoyo project is, there’s a negotiation, which is ongoing between the government and the investor,” Kairuki said. “Some of the issues that the investor is proposing don’t make sense, but we hope that through engagement … we will get to understand better. “The good thing is the investor is ready to engage, and the government is willing to as well.” The envoy’s remarks came after Tanzanian President John Magufuli last month rejected the conditions of the deal for the project, which is being developed under China’s Belt and Road Initiative and is intended to be Africa’s largest deep water port. Magufuli described the terms which include long tax breaks for investors in the...

With 54 out of 55 African Union member states having signed the Africa Continental Free Trade Agreement (AfCFTA), the continent is on the verge of becoming the world’s largest free trade area which will merge the massive area into a single market of 1.2 billion people with a combined GDP of US$2.5 trillion (over N$35 trillion), according to the UN Economic Commission for Africa. However, local analysts have cautioned that the ambitious initiative is being hampered by issues such as non-tariff barriers, lack of financing and infrastructure problems. It has been estimated that that the Africa needs at least US$300 billion (approximately N$4,2 trillion) by 2020 to build quality infrastructure to facilitate the free trade agreement. “For continental trade to increase, substantial investment in infrastructure is required, not only in transport infrastructure, but in border infrastructure, in communication technologies so that business people can communicate easily across the continent, in financial infrastructure so that money can flow easily, in electricity infrastructure so that border posts can operate effectively 24 hours a day, etc. In addition, customs and other documentation should be unified to ease cross-border trade, as well as transport regulations such as axle loads, working hours of truck drivers etc,” commented Klaus Schade, a local economic analyst. Responding to questions from New Era, Schade added that trade across borders requires movement of people across borders, such as business persons, traders, truck drivers and so forth. “Namibia has taken the first step and embarked on visa on arrival, although the...

The success of the African Continental Free Trade Area (AfCFTA) will be measured largely by its ability to change lives, reduce poverty and contribute to economic development in Africa. This is according to the ninth edition of the flagship Assessing Regional Integration in Africa report (ARIA IX) launched during the African Business Forum. Expounding on the report, United Nations Conference on Trade and Development Secretary General Mukhisa Kituyi said that competition, investment and intellectual property rights are crucial requirements in the next phase of the agreement. He also urged the African business community to take ownership of the integration effort on the continent. The report highlights challenges facing regional integration which include limited energy and infrastructure development, insecurity and conflicts and limited financial resources among others. Going forward, the report says e-commerce is likely to be a significant driver and outcome of intra-African trade. “The public and private sectors are increasingly adopting e-commerce platforms. Governments deliver services through them, electronic marketplaces aggregate consumer and producer demand as well as trade-related services, traditional businesses have incorporated e-commerce into their business models and operations and individual entrepreneurs and small businesses use social media platforms to engage with market opportunities,” reads the report. Source: Capital Business