Sustain Existing Markets and Open up New Markets for Kenyan Goods

Overview

Increasing industrial output from Kenya also requires outlets. Markets are central in the development of the manufacturing sector. Kenya maintains an open trade policy and is export oriented. This must be safeguarded and enhanced further. Local markets are critical for local producers and service providers. It is therefore critical to expand both local consumption of goods and services and develop new external markets. Exports would enable the country to effectively deal with the fiscal and monetary challenges as it reduces the current reliance on domestic consumption as a major driver of the economy. The government should actively pursue initiatives to grow and diversify Kenyan exports.

In order to grow the manufacturing sector, there is need for increased purchase of locally manufactured products by the Kenyan Government, private sector and citizens. In encouraging imports we are actually creating jobs in foreign countries and draining our foreign revenues. “A Buy Kenya; Build Kenya Philosophy” needs to be inculcated in the mind of all Kenyan Citizens.

Government has clearly stated its intention to boost consumption of local goods and services. This needs to be harnessed and deepened in all sectors and services and tracked. In a similar manner that Government is tracking consumption of goods and services from young people or women. In addition to boosting local consumption of goods and services, Kenya needs to look at critical markets. Starting with Africa.

Recommendations

External and Internal market development

1. There is need to conclude trade agreements and expand the external market through concluding regional, bilateral and other trade agreements and special arrangements that will deliver expansion of such markets. These include the Tripartite Free Trade Area, Europe, and Special Status Agreements with African Countries.
2. East Africa remains a critical market for Kenya. The EAC Customs Union and the Common Market agreements have opened up these markets. It is critical that we make the East African Community work for Kenyan businesses by pushing for the attainment of a true single market with limited barriers for goods and services and freedoms of movements of persons. The government should work towards the elimination of external non tariff barriers in countries we have signed trade agreements with.
3. COMESA represents an additional market for Kenya. Kenya should work towards expanding the number of members who are members of the COMESA Free Trade Area in order to expand liberal market access.
4. Beyond EAC and COMESA, Kenya needs to reach Bilateral market access agreements with significant trading partners in Africa. Kenya signed a Special status Agreement with Ethiopia in 2012. This needs to be ratified expeditiously and the attendant protocols developed to ensure trade and investment in the two countries is realised as per the SSA. In addition Kenya needs to conclude such agreements with other large markets in Southern Africa and West Africa.
5. There is a need to protect the existing trade markets as we work on opening new ones. Exports to Europe average Ksh 100bn a year - and enter the market duty and quota free. Europe is therefore a critical market for Kenya and needs to be safeguarded. The ongoing trade negotiations for an Economic Partnership Agreement between the EAC and Europe present an avenue for maintaining competitive access to this market with great potential. With regard to the American Trade, AGOA presents great opportunity for entry into the American market and in 2013, Kenya supplied the largest volume of textiles into the US market from Africa. The end the AGOA agreement is looming in 2015 and it is critical that Kenya works with other African countries who are beneficiaries to ensure extension of the same.
6. Local market expansion through preference in local public procurement. Affirmative action in public procurement for local industrial products by government agencies and the public support for Kenyan products. There is need to inculcate “Buy Kenya, Build Kenya” philosophy as a national culture.