The adoption of Kenya’s National Trade Policy, the first of its kind, in December 2016 was momentous and a profound feat for all policy-makers involved. As someone who advised the government on the policy from start to finish, I am pleased to provide this snapshot of how it will help to transform the country.
In a nutshell, the policy deals with both trade in goods and services and has two critical parts: domestic trade and international trade. It synchronises trade with industrial policy and strengthens coordination with those institutions responsible for investment, agriculture, industry and energy policy.
The domestic component of the policy focuses on wholesale, distribution and informal trade. Under the policy, a robust implementation roadmap is being developed to help grow and enhance productivity, develop infrastructure, improve the quality of products and develop laws and regulations for distribution.
The international trade component, on the other hand, deals with issues such as product and market diversification, trade facilitation and quality infrastructure. A major emphasis here is to enhance roads, railways and ports as well as energy, water and telecommunication. This is important as infrastructure provides links to the world market that are vital for export competitiveness.
The policy clearly recognises the importance of services trade, whose contribution to Kenya’s GDP has reached 60 per cent. Services have become an area of comparative advantage for Kenya and can usefully be exploited to harness its potential to generate spillover benefits for the overall economy. The policy underscores services that facilitate the growth of other sectors of the economy such as such as agriculture and industry.
It also recognises that while growing the country’s exports within the framework of the trade policy is extremely important, it is not the only part of the development strategy. Hence, it is smartly anchored in Vision 2030, the country’s long term planning framework that pulls together social, political and economic pillars of growth.
It is expected to boost inclusive development by supporting sectors that add more value to goods, rather than simply growing or extracting commodities. Towards this end, Kenya is looking to cluster sectors with high export potential under the national export strategy that is now being developed.
In typical Kenyan style, several Bills which will deliver the National Trade Policy are already before parliament, such as the Trade Development Bill and the Trade Remedies Bill. Through this legislation, the policy is expected to accentuate Kenya’s position as a regional trade hub and make the country a target for investors. These reforms will boost productivity and employment, helping to deliver economic stability, predictability and security.
This will provide the catalyst for the country to increase its exports to the rest of the world and, in due course, will help to create growth and jobs for the benefit of all Kenyans.