AfCFTA set to boost the income for millions of East African residents

Female worker picking figs at plantation

NAIROBI, Kenya - The implementation of the African Continental Free Trade Area (AfCFTA) is projected to increase real income for EAC countries, following the reduction in trade costs relating to Trade Facilitation, Non-Tariff Measures (NTMs) and Non-Tariff Barrie’s (NTBs).

The real income is projected to increase between 2021-2035 as follows: Kenya (11.8%); Tanzania (10%); Uganda (3.8%); Rwanda (3.6%) as per World Bank data.

This was elaborated by EABC -CEO Mr. John Bosco during the East African Business Council (EABC) GIZ- Support to East African Market-Driven and People-Centered Integration Programme (SEAMPEC) II 2-day Private Sector Sensitization Workshop on African Continental Free Trade Area (AfCFTA) Agreement on Trade in Goods Protocol taking place in Nairobi, Kenya.

The Kenya Private Sector Alliance [KEPSA ]Deputy -CEO Victor Ogola said that non-tariff barriers are derailing the realization of the AfCFTA pact.

He further added, "Building Africa into a continental village needs the understanding of the characteristics of a village and that this should start from a political level."

Ogola also expounded Kenya has exported batteries and Tea to Ghana under the AfCFTA Guided Trade Initiative and plans are underway to export electric cables and automobile parts too.

EABC Board Director Mr. Mucai Kunyiha urged the Kenyan private sector to take a proactive role by trading under the AfCFTA.

Mr. Kunyiha said the AfCFTA Agreement is a clear testimony that the African States have committed to doing more trade and investment among themselves by creating a market of 1.3 billion people with a combined gross domestic product (GDP) valued at USD 3.4 trillion.

On his part, EABC Goodwill Ambassador on Transport and Logistics, Mr. Auni Bhaiji said, the Implementation of AFCFTA is projected to increase Intra-African trade significantly, especially in manufacturing. For example, the share of intra-AfCFTA exports to total global exports will increase as follows: Tanzania (28%); Uganda (29%); Rwanda (33%), and Kenya (43%).

The private sector workshop on AfCFTA convened 55 businesses in Kenya who learned about the AfCFTA Trade in Goods Protocol and its annexes (especially Rules of Origin, Tariff Concession, and Non-Tariff Barriers) and implications to businesses in the EAC bloc.

The AfCFTA Agreement envisages boosting intra-African trade through the gradual elimination of tariffs on over 90 African goods and the removal of non-tariff barriers and trade restrictions on goods and services, respectively.

The EAC exports of goods to Africa stood at USD 7.9 billion composing 42% share of EAC total exports of goods to the world (USD 18.7 billion). Top EAC exports to Africa included precious stones, coffee, tea, cement, animal fats, mineral oils & iron, and steel.

East Africa as a bloc has great potential to export vegetables, tea, rice, coffee, sugar, textile products, soap, sesame seeds, edible oils, tubers, and milk to the continent.

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