Kenya supports establishment of Free Trade Area, says KibakiPosted on Tuesday, July 17th, 2012 by Kenya Broadcasting Corporation in News
President Kibaki has called for the establishment of a Continental Free Trade Area saying this would increase intra-Africa trade and consequently improve the living standards of millions of people across the African continent.
Addressing the 19th African Union Summit in Addis Ababa on the theme ‘Boosting Intra-African Trade’, President Kibaki said experience within EAC and COMESA indicate that free trade areas result in increased intra-regional trade which translates into increased government revenues and improved livelihoods.
Within the East African Community, for example, the launch of the Customs Union and the Common Market boosted the region’s overall trade performance.
“Statistics,” said the President, “indicate that intra-EAC trade doubled from about 2 billion US dollars in the year 2005 to 4 billion US dollars in the year 2010.”
In view of this, President Kibaki said “Kenya supports the establishment of a Continental Free Trade Area” and called upon African countries to “take the necessary measures to achieve this goal by multiplying and fast tracking investment in infrastructure, removing trade barriers, developing African industrial enterprises, opening borders and harmonizing customs regulations.”
President Kibaki said that although much progress has been made towards promoting intra-African trade, the volume of intra-African trade remains minimal in relation to the total share of global trade.
In spite of the growth of trade between EAC member countries, for example, President Kibaki noted that the level of intra-EAC trade is still very low compared with other regions such as the European Union.
“Intra-EAC trade currently stands at only 13 per cent of total trade with the external world compared to the intra-EU trade which is over 60 per cent of the world trade. This indicates the need to address the constraints that hinder the growth of enormous trade opportunities within Africa,” said the President.
To reverse this situation, President Kibaki underscored the need for African countries to liberalize domestic economic policies and open up borders to enable people trade freely.
Further, President Kibaki underlined the need for African countries to shift their focus from trading in primary products to manufactured goods and value added agricultural commodities.
Said the President: “This holds the key to rapid industrialization which will create employment, reduce poverty, and raise the living standards for millions of people across the entire continent.”
Additionally, President Kibaki said the improvement of the business environment in the continent is key to the growth of intra-Africa trade; saying this entails eliminating Non-Tariff Barriers that continue to raise the cost of doing business in Africa and facilitating the growth of small and micro industrial enterprises which generate employment and incomes.
President Kibaki further noted that the improvement of the business environment also entails “the creation of customs unions and common markets in order to guarantee the free movement of people, goods, services and capital, as well as the rights of residence and establishment.”
In addition to these measures, President Kibaki said the provision of basic regional and continent-wide infrastructure, including reliable and adequate energy, is critical to accelerating the growth of intra-African trade.
“We should, therefore, prioritize the implementation of our regional Master Plans, particularly in critical infrastructure such as Roads, Railways and Communications,” said President Kibaki.
The President added that the achievement of this objective depends on effective resource mobilization that should include the public and private sectors, as well as local and foreign investors, in support of identified priority regional infrastructural projects.