Govt. bets on National Trade Policy to narrow trade deficit
Kenya is inching closer to getting a National Trade Policy to address export challenges and boost trade.
The policy is expected to address market access for local goods as the government bridges the trade gap that exists with different markets.
Trade Principal Secretary Dr Chris Kiptoo said on Wednesday that the country’s trade structure has concentrated much on primary products and traditional markets without diversifying to tap new opportunities.
“This policy is putting together the various pieces of legislation and documents that relate to trade. We have made significant changes however the legislation remains scattered to ensure there is more coherent coordination of trade matters,” he said.
Kenya has access to the Common Market for Eastern and Southern Africa (COMESA), East African Community (EAC) the Unites States through the African Growth and Opportunity Act (AGOA) and the tripartite Free Trade Area (FTA) but government officials say the access is yet to be fully tapped.
The government however says the disjointed approach to trade has meant Kenya has over the years been at a disadvantage.
This stems from the fact that Kenya primarily exports its goods raw, losing out from opportunities from value addition to earn more money.
Dr Kiptoo said Kenya also tends to overly on its traditional markets, failing to account for the changing trade dynamics.
One of the policy measures contained in the National Trade Policy is setting up of incubators linked to export market to help harness innovations and inventions to produce value added products.
Dr Kiptoo said the policy will allow industry players to structure trade and make local goods competitive to access to larger markets and help narrow the trade deficit.
“Our exports have been growing at six percent over the last five years but our imports have been goring at above 10 percent and that has tended to increase the current account deficit so we want to come up with an export strategy that grows our exports,” he said.
Kenya is a net importer with a dismal 0.03 percent share of the country’s total export in global merchandise trade.
The trade policy will be presented to cabinet for adoption.
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