2021 was a historic year for Africa. The African Continental Free Trade Area (AfCFTA) has entered into force, having been signed by 54 of the continent’s countries.
More than a year later, governments are now making trade easier by removing tariffs on thousands of products across Africa.
Kenya, Africa’s sixth largest economy, hopes the agreement will boost the country’s position as a regional trading and trading hub. Speaking to CNN Business last month At Expo 2020 Dubai, Kenya’s Minister of Manufacturing, Trade and Enterprise Development Betty Maina said private sector participation in the trade agreement could help the country achieve this goal. The following interview has been edited for clarity and length.
The AfCFTA was implemented on January 1, 2021. How have things gone so far?
Maina: Achieving the African Continental Free Trade Area is a journey. Sellers need to identify buyers, and once they have identified buyers, they also need to determine how they will receive payments. And you also need to be able to deliver the goods. Africa’s infrastructure challenges mean they are tough.
It’s easy for Kenya to trade with Uganda and Rwanda because we have road connections, but moving goods from Kenya to Nigeria requires us to use the sea, because we don’t have a road. But [the AfCFTA] It shows that there are structures in place to start intra-African trade while we finalize the modalities.
You’re talking about infrastructure – this is a huge area where more needs to be done. What are countries doing to ensure that buyers and sellers have the right ecosystems?
Maina: Market access tools, the abolition of tariffs is the first policy. The second policy – which we all worked on in East Africa – is to harmonize standards. The third policy of the framework is trade: facilitation and customs clearance are also important to ensure the passage of our goods.
What we are now asking for is greater involvement of the private sector in identifying partners in each of the other countries. Because once the partners are identified, we will determine if there are any deficiencies in the policy framework. The African market is huge. It is important that we work to remove any barriers, not just tariffs.
As the Minister of Trade and Industry, what are you doing to make Kenya a regional hub?
Maina: Kenya’s interest is consistent in all integration projects. We see it as an opportunity to challenge our companies to become more competitive globally so that they can penetrate these markets. But it is also important that we penetrate these markets with goods that have not yet been penetrated Out. It gave us an opportunity to rise in the journey of industrialization towards the production of capital goods, towards the production of medicines. We produce textiles and clothing, but there are other developed industries that we can engage in.
I said that the private sector would be very important to create that system that would facilitate trade. What are you doing to ensure that the private sector can expand into other countries?
Maina: We talk to the private sector very regularly. We have a good sense of the capacity of our private sector, and we are working to facilitate their entry into these different markets. But the government is not productive, and the government is not in business. It is important to talk to the private sector while attracting new investments, to ensure that they can become partners.
Are you happy with Kenya’s trade numbers from 2021?
Maina: We can do better. We can always do a better job. We have a goal within the government of expanding our exports year on year by 25%. We have not yet reached that number. So it clearly shows that there is a lot of work to be done to raise our trade numbers.