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Kenya launches national trade policy to boost forex earningsTuesday, July 11, 2017 > 09:39:08
Kenya on Monday launched a National Trade Policy that aims to boost the country's foreign exchange earnings, a senior official said Monday.
The new policy adds impetus to the robust trade policy reforms that the country has pursued under regional and multilateral trade arrangements.
"The new trade policy articulates provisions that are geared toward promoting efficiency in the growth of domestic trade through transformational measures that address the constraints impeding against the development of the wholesale, retail and informal sectors," said National Treasury Cabinet Secretary Henry Rotich.
Speaking during the opening of the Kenya Trade Week, Rotich said currently most of foreign exchange earnings are from foreign direct investments.
"The national trade policy will help to increase volume of exports so that we increase foreign exchange earnings," he said.
He said the policy will provide a coordinated approach on how the government addresses trade issues in order to improve the business climate for Kenyan manufacturers.
Rotich said that the policy will help reverse the recent trend where the pace of growth of imports is growing faster than the growth of exports.
"This is putting a lot of pressure on the Kenyan shilling as importers need foreign currency to buy imports," he said.
Industry and Trade Cabinet Secretary Adan Mohammed said this will contribute to strengthening of regional integration and will in turn anchor Kenya as a dependable and predictable trading partner.
Mohammed said trade policy was launched at a time when the global trade landscape is facing emerging challenges. Over 70 percent of global trade is made up of manufactured goods.
"Intra-Africa trade averages about 12 percent whilst Kenya's share of both the global pie as well as in Africa has been facing serious bottlenecks leading to a huge balance of trade deficit with most of our trading partner," said Mohammed.
The East African nation's trade imbalance has been increasing in the past decade largely driven by demand for manufactured goods that are imported.
Rotich said that trade imbalance is a serious issue that the government wants to address. He noted that the manufacturing sector presents the best hope for Kenya to increase its exports.
The government data indicates that the manufacturing sector contributes about 10 percent of Kenya's gross domestic product (GDP).
"We plans to double the figure to 20 percent in the next five years by implementing a number of measures," Rotich said.
Besides the policy, the Kenyan government also launched the Buy Kenya Build Kenya Strategy; Guidelines for Kenya's Trade and Investment Missions; the National Export Development and Promotion Strategy for Kenya 2017-2022; the National E-Trade portal; The National Trade Facilitation Committee (NTFC); and The State Department for Trade Website.