2021 was a historic year for Africa. The African Continental Free Trade Area (AfCFTA ) came into effect, having been signed by 54 of the continent’s nations.
More than a year on, governments are now working to facilitate trade by removing tariffs on thousands of products across Africa.
Kenya, Africa’s sixth-largest economy, hopes that the deal will cement the country’s position as a regional commercial hub and trade center. Speaking to CNN Business last month at Expo 2020 Dubai, Betty Maina, Kenya’s Minister of Industrialization, Trade and Enterprise Development, says the private sector’s involvement in the trade agreement can help the country achieve that goal. The following interview has been edited for clarity and length.
The AfCFTA was implemented on January 1, 2021. How has it gone so far?
Maina: The realization of the AfCFTA is a journey. Sellers need to identify buyers, and once they identify buyers, they also need to establish how they will get payments. And you also need to be able to deliver the goods. The challenges of infrastructure in Africa means that it is difficult.
It’s easy for Kenya to trade with Uganda and Rwanda because we have road connections, but to get goods from Kenya to Nigeria requires us to use the sea, because we don’t have a road. But [the AfCFTA] shows that there are structures in place to start trading within Africa as we finalize the modalities.
You talk about infrastructure — that’s a huge area where more needs to be done. What are countries doing to be sure that buyers and sellers have the right ecosystems?
Maina: Market-access instruments, the removal of tariffs is the first policy. The second policy — that we’ve all worked on in East Africa — is on harmonization of standards. The third policy of the framework is on trade: facilitation and customs clearance are also critical for ensuring our passage of goods.
What we now require is greater participation by the private sector to identify partners in each of the other countries. Because once they have identified partners, we will establish if there are any shortcomings in the policy framework. The African market is huge. It’s important that we work to remove any barriers, not just tariffs.
As Trade and Industry Minister, what are you doing to make Kenya a regional hub?
Maina: Kenya’s interest is consistent across all integration projects. We see them as an opportunity to challenge our companies to become more globally competitive so they can penetrate these markets. But it’s also important that we penetrate these markets with goods that do not yet exist. It has given us an opportunity to go up in the industrialization journey towards production of capital goods, towards production of pharmaceuticals. We produce textiles and apparel, but there other sophisticated industries that we can and sign up to.
You said the private sector is going to be very important to create that system that will facilitate trade. What are you doing to ensure that the private sector can expand into other countries?
Maina: We talk with the private sector on a very regular basis. We have a good sense of the capacity of our private sector, and we work to facilitate their entries into these different markets. But the government is not a producer, the government is not in business. It’s important to talk to the private sector as you attract new investment, to ensure that they can become partners.
Are you happy with Kenya’s trade numbers from 2021?
Maina: We could do better. We could always do better. We have a goal within the government to expand our exports on an annual basis by 25%. We’ve not yet reached that number. So clearly it shows that there’s a lot of work to do to get our trade numbers up.