The EAC-Comesa-SADC tripartite agreement will be in place by the end of April 2023, President William Ruto has said.
This means 28 African countries will trade as a bloc with the European Union.
Pitching Kenya as the preferred investment hub for EU investors on Tuesday, President Ruto said Nairobi is a strong participant in the Tripartite Trade Agreement encompassing EAC, Comesa and SADC.
“The tripartite agreement was signed in 2015 and unfortunately for the seven years or so, we have not concluded it to the satisfaction of the EU requirements,” the President said in Nairobi during the EU-Kenya Business Forum.
To address this challenge, Ruto said he sent Trade CS Moses Kuria as his special envoy to 11 capitals to meet with the respective presidents.
“He [Moses Kuria] has been to Egypt, Angola, Comoros [new AU chair], Uganda, Tanzania, Lesotho South Africa …, and now I can promise with confidence, by the end of April, we will have the tripartite agreement in place,” Ruto said.
This, he said, will offer the 28-countries bloc the advantage of 750 million people and an economy of $1.8 trillion.
“This is a great opportunity that as the EU looks at Kenya, you are also looking at the tripartite agreement and a huge population and economy to deal with. We can now have a conversation of equals,” he said.
Signed in Sharm EI Sheikh, Egypt, on June 10, 2015, the deal seeks to establish a tripartite free trade area among Comesa, SADC and the EAC economic communities.
To achieve this, the deal committed to resolving the overlapping memberships of the member states to other blocs, reducing the cost of doing business and creating an environment conducive to the private sector.
It was also to liberalise trade in goods and services, promote industrial development, facilitate the movement of business persons, support the strengthening of infrastructure, promote competitiveness, build the capacity of MSMEs, and deepen integration among partner states.
The ratification, however, faced headwinds over failure to agree on various issues such as the contentious rules of origin and tariffs. The deadline was pushed to December 2017 and is yet to be in place.
Speaking during the handover of the chairmanship of the tripartite task Force to Comesa Secretary General Chileshe Mpundu Kapwepwe in June last year, EAC's Peter Mathuki said the development of the guidelines for the movement of goods and services and protocol on competition policy had been finalized awaiting adoption by policy organs.
However, there remained outstanding issues such as the completion of the exchange of tariff offers, finalisation of some chapters on rules of origin, on textiles and automotive products mainly, intellectual property rights and trade in services.
Other pending areas were the development of instruments to implement the Tripartite Protocol on Competition policy and specific guidelines on perishable goods.
Speaking at the EU-Kenya meeting, CS Kuria said Kenya remains geo-strategic as the gateway to East and Central Africa, and a central player in the three overlapping RECs.
“That is why we have pioneered the efforts to bring together SADC, EAC and Comesa as a vital stepping stone towards the African Continental Free Trade Area," Kuria said.
"We believe, as a country, the journey towards AfCFTA has commenced well but having a modular step-by-step approach is going to fast track this process."
He said they are encouraging other economic blocs from the West and North Africa —Ecowas, Sahel and Maghreb — to take similar measures so as to fast-track African integration efforts.
EU Ambassador to Kenya Henriette Geiger said despite the bloc being the leading trading partner with Kenya, there is still potential to be exploited.
France Foreign Trade minister Oliver Becht said the EU's choice to invest in Africa is long-term and mutually beneficial.
"EU-Africa partnership key in dealing with various challenges, including climate change.We want to promote quality trade and investment with Kenya," Becht said.
CONCLUSION OF EPAs
The pending Economic Partnership Agreements between the EU and the EAC also came up.
Ambassador Geiger said it is essential that the negotiations be concluded.
"We hope the negotiations we'll have this week will be concluded when the President goes to Europe next month," Geiger said.
Kuria said during his last meeting with Dora Correia, EU director for Africa, Asia and Pacific last December, he told her that by March 31, the EPA should have been concluded. He said he looked forward to signing of the agreement before the end of the quarter.
The minister, however, castigated other EAC partners for what he termed as frustrating efforts to open free trade.
“We want the EU to continue speaking to our partners and neighbours because the reason Kenya has taken a very robust approach to trade negotiations — PS Alfred K’Ombudo is negotiating three major negotiations with the EU, the US and UAE at the same time — is because we have everything to gain and everything to lose if we don’t take this route.”
"Some of our neighbours and partners, because of the Least Developed Countries status, continue enjoying free access to your market. Is it right? Is it fair? Is it moral for us to continue suffering because we are a middle-income country? We cannot incentivise poverty.
"That’s why we are asking that you continue having this conversation and tell them to aspire to leave the LDC status to the middle income,” the CS said.
President Ruto sustained pressure, calling for a fresh push to conclude the EPAs to even the scales.
“Access to the EU market would enable Kenya to expand its export base and also create employment opportunities and strengthen its balance of trade. It is one of the notable interventions that can make a tremendous difference to our economic performance and there is an excellent reason, in the EU’s best interests, to conclude the deals," he said.
“Equally fundamental is that the EU accounted for 16.5 per cent of Kenya’s total import bill that amounted to Sh355 billion, representing an increase in value of imports to 14.8 per cent from the previous year."
Among the deals signed during the meeting included the $200 million loan between the European Investment Bank and the Trade and Development Bank to support private sector development; Euros1.8 million MoU on Green Hydrogen to strengthen collaboration in the construction of renewable energy infrastructure.
The EU and Trade Mark Africa Business Environment and Export Enhancement Programme, a €25M EU grant-funded project, was also signed.
It consists of €20M for export promotion, the greening of value chains and using digitalisation and other means to make trade faster and easier.
Kepsa and Slovakia investment agency signed an MoU to enhance their coordination and cooperation to further intensify the commercial exchange between Kenya and Slovakia.