Kenya, SA seek to remove trade barriers

Kenya and South Africa will next week set up a joint secretariat to ease trade between them, giving local investors easier access to the Johannesburg market.

Sisanda Mtwazi, the Economic Counsellor at the South African High Commission in Nairobi, said agreements—which will lead to the establishment of the Joint Trade Commission and the Private Sector Business Council—will be signed on Wednesday.

The two institutions are expected to rev up investments between the countries that is currently skewed in favour of South Africa.

“The formation of this commission is likely to address these imbalances through increased investments from South Africa targeting export markets and increased market access into South Africa for local investors,” said Export Promotion Council’s CEO Matanda Wabuyele.

Clear signal

Official data indicate imports from South Africa are currently 20 times the value of Kenya’s exports to that country, a clear signal that South Africa investors are reaping more from the trade between the two countries.

Kenya exported goods worth Sh3.6 billion to South Africa last year while it received goods worth Sh46.6 billion from the country.

This has been attributed to tariff barriers and the advancement of the South Africa economy compared to Kenya, which has seen it sell high value goods such as vehicles, machinery and computers to Kenya.

Kenya mainly sells flowers, handicraft and woven products.

The commission and the council are expected to provide a platform to address some of the outstanding trade disputes such as tariff and non tariff barriers that exist between the two countries.

“What is intended is to streamline our trade agreement so that the tariff barriers that exist because we belong to different African trade blocs do not impede trade,” said South Africa’s High Commissioner to Kenya, Tony Gab Msimanga.

Kenya belongs to the Common Market for Eastern and Southern Africa, COMESA trading bloc while South Africa belongs to Southern Africa Development Community, SADC.

Exporters from the two countries face restrictive tariffs because of this reality, which slows the pace of trade.

The setting up of the two organs, which will have permanent secretariat, was part of the Bilateral Trade Agreement signed by the two countries late last year.

The agreement was envisioned in Kenya’s Vision 2030 as a means of helping Kenya increase its exports and learn from countries with higher economic competitiveness.