Kenya has been ranked third among African countries that stand to gain most from the continental free-trade zone that is expected to start work in January, Word Bank reveals.
Only Ivory Coast and Zimbabwe are said to benefit more than Kenya from the African Continental Free Trade Area (AfCFTA) — the largest since the creation of the World Trade Organisation in 1994.
The World Bank reckons Kenya’s relatively developed industrial potential and human capital will give it an edge from reduced trade barriers on the continent.
Kenya is also among those that have already reduced trade costs and barriers with neighbouring countries.
“Most of AfCFTA’s income gains are likely to come from measures that cut red tape and simplify customs procedures,” the World Bank`.
“Tariff liberalisation accompanied by a reduction in non-tariff barriers — such as quotas and rules of origin —would boost income by 2.4 per cent, or about $153 billion. The remainder — $292 billion — would come from trade-facilitation measures that reduce red tape.”
AfCFTA is expected to unlock Africa’s long-stymied economic potential by boosting intra-regional trade, strengthening supply chains and spreading expertise.
The continental free-trade zone, once implemented, will bring together 1.3 billion people in a $3.4 trillion economic partnership.
The deal, which was set to commence on July 1, 2020, was expected to lower compliance costs for traders and make it easier for African businesses to integrate into global supply chains.
The AfCFTA could begin operating on January 1 next year, after the Covid-19 pandemic made its original launch date untenable.