NAIROBI (Xinhua) --
Kenyan experts on Thursday urged the government
to diversify the country’s export base to help curb rising trade
deficits which they said grew 1.2 percent in 2019.
experts, from the Institute of Economic Affairs (IEA) and the
Kenya Association of Manufacturers (KAM), said the government
could enhance its ability to widen sources of revenue by
increasing investment in a broad range of sectors.
"We remain constrained by the current export structure that
relies on a few export products and markets," said KAM research
and fiscal policy manager Simon Githuku.
"It is time we diversified if we are to address the
ballooning trade deficits."
Githuku told a forum in Nairobi that having a new export
structure will mitigate adverse effects of trade fluctuations.
According to latest World Bank statistics, the gap between
imports and exports climbed to 1.15 trillion shillings (10.15
billion U.S. dollars) in 2018, up from the previous year’s 10.13
"We... require a clear regulatory framework and workable
incentive packages to condense the trade deficits," Githuku
The trade deficit is denying the country an opportunity to
create more jobs with local firms losing out to foreign
manufacturers in the long run, he said.
Joram Gicheru, an IEA associate, called on the government to
give subsidies to local producers of agricultural products to
reduce the cost of production and improve volumes and quality of
"One of the ways out from this mess is by striving to double
volumes of our three top exports—tea, coffee and
horticulture—and to do that it means we need to improve our
productivity," he said.
The answers to the deficits also depend on how the government
positions its manufacturing sector with a sharp focus on
alternative products such as textile, chemicals, machines,
agro-processing, blue economy and leather, Gicheru said.
He called on policymakers to take advantage of the Africa
Continental Free Trade Area (AfCFTA) initiative, which offers
African countries a great long-term opportunity to address
technical barriers to trade.
The agreement will increase intra-Africa trade as well as
enabling Kenya and other African countries to attract
investment, he said, noting that the AfCFTA provides new export
opportunities for African products.
Once in place, the AfCFTA will cover a market of 1.2 billion
people and a combined gross domestic product (GDP) of some 3
"We must position ourselves strategically to reap from the
regional pact, which aims to establish a single market that will
spur industrialization, infrastructural development, economic
diversification and trade," Gicheru said.
Fred Simiyu, who is in charge of international trade at the
Ministry of Trade, said the government will implement
initiatives to add value to the free trade agreement.
Richard Kariuki, regional head of Governance Beta Healthcare
International, urged the government to offer favorable policies
that make it easier for pharmaceutical and health industries to
"The government needs to give subsidies and come up with
favorable tax policies on medical equipment, capital expenditure
and raw materials as well as honoring obligations for health
sector such as tax refunds, improved management as well as
partnership with private entities to foster a coherent framework
for UHC," he said, referring to universal health care.
East African region to
register 5.9 percent growth in 2019: report
NAIROBI (Xinhua) --
The shrinking revenue from export of commodities
including minerals led to a minor drop in economic growth rates
across East Africa in 2018, according to the African Development
Growth, however, is expected to gain pace in 2019 at 5.9
percent rising to 6.1 percent in 2020, said a report issued by
the bank on Wednesday.
The bank’s report, measuring economic performance in 13
countries in eastern Africa, shows the real Gross Domestic
Product grew by an estimated 5.7 percent in 2018, slightly less
than the 5.9 percent in 2017, due to the growing current account
deficits caused by low earnings from exports.
The bank projects economic growth to remain strong in 2019 at
5.9 percent, supported mainly by domestic consumption of goods
and the growth in the services sector.
According to Marcellin Ndong-Ntah, AfDB Lead Economist at the
regional office in East Africa, the region’s fiscal deficit, due
to the low earnings from exports caused by the trade imbalance,
stood at 30 percent of the national economy, which is considered
under control at the moment.
However, the bank expressed concern at the growing level of
foreign debt accumulation by countries which previously
benefited from international debt relief, saying the effect of
foreign debts accumulation by the private sector and the public
sector would be felt in the near future.
The report shows Ethiopia with the highest margin of economic
growth at 8.2 percent, followed by Rwanda at 7.8 percent and
Kenya at 6 percent economic growth rate.
Djibouti is projected to grow at 5.9 percent while economic
growth in South Sudan is expected to remain at negative 3.8
Seychelles, whose economy depends on tourism and fisheries,
is also expected to record a decline of 0.3 percentage points.
In Eritrea, investment in the mining sector and the
government’s agriculture development programs is expected to
contribute to economic growth in 2019, according to the report.
Uganda, whose economy has been growing rapidly, is expected
to record 5.3 percent growth in 2019.
Sudan is also expected to record a decline in economic growth
rates by 0.5 percent.
The growth in Sudan has been driven by the mining sector,
whose contribution to the GDP is estimated at 7 percent.
According to the AfDB, real economic growth is supply-side
driven by the growth in the services sector, followed by
industry and the construction sector, whose contribution to the
economy remains huge.
In Ethiopia, the construction industry grew by 18.7 percent
while the services sector grew by 10.3 percent, according to the
COMESA calls for
expediting ratification of tripartite free trade area
LUSAKA Zambia (Xinhua) --
An African trading bloc on
Thursday urged member states of three regional economic blocs to
sign and ratify the free trade area agreement as the deadline
Three regional blocs namely the Common Market for Eastern and
Southern Africa (COMESA), East Africa Community and the Southern
African Development Community signed the tripartite agreement in
June, 2015 in Egypt, comprising 26 countries.
In a statement released after a meeting of the COMESA
Intergovernmental Committee in Lusaka, the Zambian capital, the
regional bloc urged member states to sign and ratify the
agreement which lapses this month.
The statement said so far only four countries in the three
regional blocs ratified the agreement.
The deadline of April 2019 was set in June last year during a
ministerial meeting in South Africa, the statement added.
Christopher Yaluma, Zambia’s Minister of Commerce, Trade and
Industry said it was time for the remaining countries to sign
the tripartite given that it was supposed to be the building
block to the Africa Free Trade Area Agreement.
"I can not overemphasize the absolute importance of all of us
ratifying the tripartite agreement so that it enters into force
immediately. After years of negotiation, the tripartite free
trade area is ready for implementation," he said.
The Zambian minister said 93 percent of the work of rules of
origin has been completed, providing the basis for trade to
begin while legal texts have been concluded and adopted.