Kenya has followed a mixed economy development strategy since independence. While the respective roles of the public and private sectors have evolved over time, the country has experienced remarkable continuity in its underlying economic development strategy. However, there is a shift recently in emphasis from public to private investment. In this context, market-based reforms have been introduced and incentives for both local and foreign private investments provided.
TRADE AGREEMENTS
Exports from Kenya enjoy preferential access to world markets under a number of special access and duty reduction programmes. Kenya is signatory to various agreements aimed at enhancing trade amongst member states.
Multilateral Trade System (MTS)
The World Trade Organization (WTO) is the only international organisation dealing with the global rules of trade between nations. The overriding objective of the WTO is to ensure that trade flows as smoothly, freely and predictably as possible. Kenya has been a member of the WTO since its inception in January 1995. www.wto.org
Regional Markets
Kenya is a member of the East African Community (EAC) with an estimated population of about 124 million. It is also a member of the Common Market for Eastern and Southern Africa (COMESA) with an estimated population of about 400 million. Exports and imports within member countries enjoy preferential tariff rates. EAC Member States have signed a Protocol to establish a Customs Union.
- COMESA
The aims and objectives of COMESA have been designed so as to remove the structural and institutional weaknesses in the member States by pooling their resources together in order to sustain their development efforts either individually or collectively. The COMESA agenda is to deepen and broaden the integration process among member States through the adoption of more comprehensive trade liberation measures such as the complete elimination of tariff and non-tariff barriers to trade and elimination of customs duties. Some Member States have already signed a Free Trade Area protocol, and the rest are working towards this goal. Efforts are at advanced stage to establish a Common External Tariff (CET). COMESA headquarters are located in the city of Lusaka, Zambia. www.comesa.int - EAC
The East African Community is the regional intergovernmental organization of the Republics of Kenya, Uganda and Tanzania, with headquarters located in Arusha, Tanzania. The Community was formerly established on November 30, 1999 through signatures of Heads of State and Governments of the three countries. The EA countries cover an estimated area of 1.8 million square kilometres and have a population of slightly above 80 million people, sharing common history, language, culture and infrastructure. These advantages provide the Partner States with a unique framework for regional co-operation and integration. www.eac.int
ACP/Cotonou Partnership Agreement
Exports from Kenya entering the European Union are entitled to duty reductions and freedom from all quota restrictions. Trade preferences include duty-free entry of all industrial products as well as a wide range of agricultural products including beef, fish, dairy products, cereals, fresh and processed fruits and vegetables. More at www.a2010-03-052010-03-05cpsec.org
African Growth and Opportunity Act (AGOA)
Kenya qualifies for duty free access to the United States of America (USA) market under the African Growth and Opportunity Act enacted by USA. Kenya’s major products that qualify for export under AGOA include textiles, apparels, handicrafts, etc.www.agoa.org
Generalised System of Preferences (GSP)
Under the Generalised System of Preferences, a wide range of Kenya’s manufactured products are entitled to preferential duty treatment in the United States of America, Japan, Canada, New Zealand, Australia, Switzerland, Norway, Sweden, Finland, Austria, and other European countries. In addition, no quantitative restrictions are applicable to Kenyan exports on any of the 3,000-plus items currently eligible for GSP treatment. See www.unctad.org
Bilateral Trade Agreements
Kenya has signed bilateral trade agreements with several countries around the world. Some of the countries are already members of existing schemes offering market access/duty reduction preferences as above.