Unlocking Trade and Investment in Africa 10th November, 2022
The curtains fell on the one-day Kenya – South Africa High-Level Business Forum held on Wednesday 9th November, 2022 at the Kenyatta International Convention Centre with a huge win for Kenya as South Africa announced they will from 1st January, 2023 allow Kenyans visa-free entry as part of efforts to deepen economic engagement between the two countries.
The bilateral talks which brought together two Presidents and 350 delegates, reviewed a wide range of bilateral and multilateral issues of mutual interest, with emphasis on strengthening existing ties between Kenya and South Africa in efforts to unlock intra-continental trade.
Three Memoranda of Understanding and one Partnership Agreement in various fields were signed during the Forum, with the two Presidents directing the respective Ministers (Hon. Ebrahim Patel of Trade and Industry of South Africa and Hon. Moses Kuria of Trade, Investments and Industry of Kenya), to ensure their full implementation.
Ministers Patel and Kuria were also directed to develop a substantial mechanism to identify, monitor and resolve Non-Tariff Barriers that limit the trade potential between the two countries, to enable trade and investment thrive.
In his remarks, Kenya’s President William Ruto said the two countries should turn their borders from ‘barriers into bridges’ that citizens can use to cross over and exploit the endless opportunities available to create wealth for themselves and their countries.
On his part, South Africa’s President Cyril Ramaphosa called for the immediate unlocking of unnecessary red-tape and bureaucracy between the two countries, and urged the 350 delegates to turn the contacts they had established while interacting in the Forum, into contracts and start transacting business.
Earlier, Trade Cabinet Secretary Moses Kuria noted that Kenyan exporters to South Africa comprised mainly Micro Small and Medium Enterprises (MSMEs) or ‘Hustlers’ compared to huge South African companies that sold goods to Kenya. On this note, he announced Kenya will establish two warehouses in Johannesburg and Pretoria, to support and encourage the MSMEs increase their export products to that market.
He further announced that Kenya will, in January 2023, host a Private Sector conference for the top 50 companies in Africa in a determined effort to unlock trade and investment opportunities in the Continent under the Africa Continental Free Trade Agreement (AfCFTA) that brings together a potential market of 1.2B people.
Kenya imports eleven times more than it exports to South Africa and is the 2nd largest export market for South African goods in the Central and East Africa region. Over the years Kenya has experienced a trade imbalance with South Africa premised on the fact that Kenya is primarily an agricultural economy while South Africa is advanced in manufacturing, mining, service and technology. Kenya’s total exports in 2021 were valued at USD 35.71M while imports were USD 392.85M.
Kenya’s imports comprise mainly motor vehicles, coal, aluminum, flat-rolled products, alcoholic beverages, medicaments, fruit and nuts. Kenya exports petroleum oils, gold, metallic salts, crude vegetable materials, tea, mate and vegetables. There exists a huge potential market for Kenyan tea, beef products, flowers and organic vegetables.
Trade among countries in Africa is at a paltry 15 – 19% and still growing. In comparison, trade among countries on the Asian continent stands at 45% while in Europe it is an impressive 70%. One of the resolutions of the Forum was to grow the figures in Africa upwards in the shortest time possible with Kenya and South Africa taking the lead.
Between 2003 and 2018, South Africa has undertaken 41 investment projects in Kenya valued at USD 403.63M, and creating 2,712 jobs in the sectors of IT, ICT and internet infrastructure, business services, real estate and finance.
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