Small businesses in Kenya are set to benefit from a Sh110 billion trade facility to boost their market expansion under the African Continental Free Trade Area (AfCFTA).
This is ahead of a planned roll out of a payment facility to ease currency convertibility across the continent.
AfCFTA Secretary-General Wamkele Mene said they were working with commercial banks across the continent to pool funds which would be guaranteed by governments.
“This trade facility will help SMEs overcome the challenge of access to new markets which is not because of lack expertise but capital,” he said.
Mr Mene said they are working with Afremixbank to develop a payment facility which is currently being piloted in six African countries.
He noted that the 42 currencies in Africa were a constraint to SMEs and they would soon not have to convert into dollars, first to transact.
“The payment facility will ensure that if you transact in support of AfCTA, the costs of transactions are reduced in relation to currency convertibility,” he said.
He said African SMEs would find new markets for their products at a preferential rate following the operationalisation of the trade deal.
"You have a new market for your goods at preferential environment. Before this agreement, if you were a trader from Kenya and want to export to Angola you were competing at the same rate as a European exporter for the same product,” he said.
Mene spoke at a Nairobi hotel after a sensitisation forum with the Kenyan private sector and the government on the operationalisation of the AfCFTA.
AfCTA was operationalised on January 1 this year, with 36 countries so far agreeing to open up their markets.
He noted that Ghana was the only country that had issued a certificate of origin for goods exported from the country.
“Trading under new rules is a process, it takes some time as governments will have to put in place the necessary customs procedures,” he said.
Mene said by the end of the year most countries would have submitted their documents of ratification.
Mene also met with President Uhuru Kenyatta this week for discussions on AfCFTA. Kenya was the first country to ratify the agreement then known as the Continental free trade area.
Trade Principal Secretary Johnson Weru said Kenya was ready and had expressed to host a trade exhibition that would bring global investors on the opportunities available under the agreement.
“Kenya is ready to start trading under the AfCFTA set up. The private sector and other organisations have also been sensitised on the opportunities and mechanics of doing business," he said.
AfCFTA provides a huge potential for businesses involved in cross-border trade and will access Africa with a population of 1.2 billion with a combined market worth of US$2.5 trillion, says the African Union.