Trade barriers affecting Kenya’s international trade, says ITC
Non-Tariff Measures (NTMs) are affecting Kenya’s exporters and importers thus inhibiting its presence in the global trade arena, an international trade body has said.
International Trade Centre (ITC) Market Analysis and Research Consultant Samidh Shrestha told journalists in Nairobi that despite global economic liberalization, non-tariff barriers continues to hinder Kenya’s international trade.”A survey conducted indicated that approximately 74 percent of all exporting firms faced burdensome NTMs which were affecting their ability to access to international markets,” Shrestha said on Tuesday during a national validation workshop on the impact of non-tariff barriers on local economies. The day-long meeting brought over 50 stakeholders to develop the final report following a survey conducted with the private sector aimed at identifying regulatory and procedural barriers to trade stemming from NTMs.
ITC, which is a joint agency of the World Trade Organization and the United Nations, said that Kenya unlike many developing countries has strong institutions to help local firms to overcome the trade barriers. “The bigger challenge is the bureaucratic inefficiencies coupled with delays in administrative procedures that affect competitiveness,” he said.He noted that tariff rates have dropped in virtually all nations and governments are now using national laws to regulate trade.”So, policy makers have to understand the obstacles that their private sector is facing in order to develop clear strategies to help overcome them,” he said.
According to the ITC, Kenya is among the 30 countries globally and among the six sub-Saharan countries where the study on NTMs has been conducted. Ministry of Trade Permanent Secretary Abdulrazaq Ali said that the focus on trade negotiations at the multilateral, regional and bilateral levels have lately been directed at the reduction of the NTMs.”The study will therefore help the country undertake a critical analysis of the implications of the trade barriers to the economy, ” Ali said. Ministry of Trade Head of Bilateral Division Joseph Kosure said that while Kenya is a serious player in the economy of Africa, it still faces a lot of challenges due to the presence of the NTMs. “The final consumers therefore bear the brunt of high prices as exporters load on the charges to the retail price,” Kosure said.
IPSOS Synovate, which conducted the survey said that medium and small enterprises are the least equipped to fulfill the burdensome NTMs required to export. Senior Research Manager Godwin Asiimwe said that most exporters are therefore calling for lower fees for certification and inspection. ITC Associate Market Analysts Olga Solleder said that the NTMs are affecting the competitiveness of products produced in Kenya. She said that while Kenya exporters can produce goods of high standard they still have difficulty in demonstrating conformity. “The European Union has also put in place regulations that exports needs to abide by. However local firms find it difficult to comply with due to procedural obstacles present in Kenya,” Solleder said.
The ITC official added that some of the regulations include the minimum level of pesticides residues allowed for agricultural exports to access the EU. Kenya Institute for Public Policy Research and Analysis (KIPPRA) Policy Analyst for Trade Dr Augustus Muluvi said that despite Kenya’s membership in the East African Community (EAC), the country’s exporters still face barriers to trade. “While the EAC accounted for 24 percent of total exports, it had 30 percent of reported NTMs,” Muluvi said.”Most of the difficult regulations applied by member states were associated with technical regulations or conformity assessments,” he said.
The KIPPRA official noted that other key domestic impediments for exporters were the laborious procedures required for obtaining certificates of origin.Kenya Bureau of Standards Economist David Nganyi said that lack of harmonized standards among the EAC partner states is one form of trade barrier that hinders cross border trade. Ministry of EAC Economic Affairs Directorate Deputy Director Fredrick Gitahi said that the EAC has recommended that each member state should maintain only two weighbridges, one at the entry point and exit points. “However, Kenya and Tanzania which are not landlocked were allowed to have more in order to curb illegal trade and enhance their security,” Gitahi said.