African Heads of States and Governments pose during African Union Summit
for the agreement to establish the African Continental Free Trade Area
in Kigali, Rwanda, on March 21, 2018. Kenya is well positioned to
greatly benefit from the AfCFTA. PHOTO | AFP
The emerging global trade and investment architecture presents a
window of opportunity for African countries to transform their
economies, achieve rapid growth and create jobs for their burgeoning
youth population.
This will be shaped by the new African Continental Free Trade Area (AfCFTA) and China’s Belt and Road Initiative (BRI).
The pan-African free trade zone envisages free movement of goods, services and people.
Eliminating
trade and investment barriers could expand trade and exchange
opportunities for Africa’s 1.2 billion people and substantially increase
its $2.5 trillion (Sh250 trillion) output.
INFRASTRUCTURE
China, being Africa’s largest trading partner, is a key factor and beneficiary of the continent’s development.
China, being Africa’s largest trading partner, is a key factor and beneficiary of the continent’s development.
A million of its citizens and 800 corporations work in Africa.
While
deepening trade and investment among themselves, African countries need
to embrace the one belt and one road initiative, under which China
plans to invest trillions of dollars for a new ‘Silk Road’ linking it to
Europe and Africa.
The BRI, said to be Chinese
President Xi Jinping’s most ambitious foreign policy initiative,
involves massive infrastructure investments across Europe and upgrading
of maritime routes connecting China with Asia and Africa.
POLICY
The potential benefits are enormous. African governments need transformative policies to improve the readiness of their economies to actively participate in the AfCFTA and reap benefits from China’s trade and investment initiative.
The potential benefits are enormous. African governments need transformative policies to improve the readiness of their economies to actively participate in the AfCFTA and reap benefits from China’s trade and investment initiative.
That involves a lot of
policy and operational changes, the most important one being for Africa
to change from a principal exporter of cheap raw commodities to a
significant exporter of manufactured goods and value-added services.
Kenya
is well positioned to greatly benefit from the AfCFTA and the
development of the Indian Ocean maritime route connecting China with the
East African coastline.
MANUFACTURE
The gateway to eastern Africa, Kenya should invest heavily in upgrading its infrastructure and industrial capacity.
The gateway to eastern Africa, Kenya should invest heavily in upgrading its infrastructure and industrial capacity.
The
window of opportunity for it is to become a vibrant industrial and
logistics hub for Sino-African trade, investment and exchange.
The
challenge for Kenya would be to explore synergies between President
Uhuru Kenyatta’s ‘Big Four’ development strategy and the opportunities
for deepening trade and investment emerging from the AfCFTA and BRI
investment programmes.
But these initiatives would only
make sense for Kenya if the manufacturing sector upgrades its capacity
and efficiency to increase the volume, quality and competitiveness of
manufactured products in the export market.
SKILLS
Kenya also needs to upgrade its technical skills in order to increase the efficiency of labour engaged in manufacturing so as to reduce importation of specialised skills.
Kenya also needs to upgrade its technical skills in order to increase the efficiency of labour engaged in manufacturing so as to reduce importation of specialised skills.
Moreover, the
government needs to fast-track the development of the ambitious
industrial programmes it has launched to support industrial development.
These include leather and textiles manufacturing
parks, which are expected to increase jobs and income opportunities for
the youth and expand the sector’s contribution to the growth and
diversity of the economy.
INNOVATION
Another great opportunity for Kenya is in knowledge and innovation.
It
should deepen its global leadership in technology to upgrade its
education and training facilities to produce high-quality science,
engineering and technology graduates to meet the regional demand for
technical skills by initiating radical reforms in the education system.
Kenya, like many of the African countries, has missed great opportunities for growth and transformation
This time, it should maximise benefits from the AfCFTA and BRI.
Mr Warutere is a director of Mashariki Communications Ltd. ptwarutere@gmail.com
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