The government is keen on concluding negotiations for the free trade agreement with the United States, President Uhuru Kenyatta said on Tuesday.
Talks on free trade agreements began in 2018 following a meeting between President Uhuru and former US President Donald Trump. However, it was not until July 8 last year that both countries announced the formal launch of talks, with July 31 this year set as the deadline for putting pen to paper on the deal.
In April this year, US Trade Representative Amb Katherine Tai said further negotiations have to align to President Joe Biden’s Build Back Better Agenda, which could further delay the agreement.
While underscoring the importance of the private sector in Kenya's economic growth and job creation, President Uhuru Kenyatta said Kenya is keen on concluding negotiations for the free trade agreement with the US.
The President invited American SMEs to invest more in the country by entering into mutually beneficial arrangements with their Kenyan counterparts, adding that the enterprises are the backbone of Kenya's vibrant economy.
“This is where the real opportunity lies. This is not to say that we are telling the big boys not to come in, they are already here. The big corporates are already here.”
“But they don’t have the capacity to propel inclusive growth as the small and medium enterprises that have a much greater capacity of affecting lives and changing the livelihoods at the grassroots level,” he said.
He spoke during a virtual US Chamber of Commerce Global Leaders’ Forum on Economic Recovery.
He invited American enterprises to set shop in Kenya saying the country provides a ready market for US products, and has an expanding economy supported by an innovative and highly skilled young labour force that is ready to absorb American investments and technology.
“I believe this is a mutually beneficial relationship that offers investment opportunities with great returns for American companies while at the same time offering job opportunities to Kenyans,” the President said.
On the African Continental Free Trade Area (AfCFTA), he said the multilateral trade arrangement had consolidated Africa's market of over one billion people into one basket making the continent an attractive investment destination for American businesses.
Conceptualised in 2012, AfCFTA officially kicked off last January 1, with the 55 member states expected to begin trading under the agreement.
According to a new World Bank study, AfCFTA could also help lift 4.4 million Kenyans out of poverty, with the country emerging among the top beneficiaries of the ambitious trade pact.
“Under the AfCFTA scenario, real income would increase by seven per cent by 2035, relative to the baseline for the Africa region - a sizable gain,” senior World Bank economists Caroline Freund and Albert Zeufack said in the study.
In monetary terms, the gains represent around $445 billion (Sh45 trillion) in Africa by 2035, while the rest of the world is expected to record an increase of $76 billion (Sh7.6 trillion) in real income.
“The gains are unevenly distributed across the Africa region,” explains the study.
“At the very high end are Côte d’Ivoire with gains of 13 per cent and Zimbabwe with gains of 12 per cent, followed by Kenya, Namibia, Democratic Republic of Congo and Tanzania at more than 10 per cent.”