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Business leaders read wish list to South Africa’s Zuma
The Kenyan business community wants levies and entry restrictions imposed by South Africa on Kenyan products such as tea, soda ash and processed meat dropped.
Representatives who spoke at the Kenya–South Africa Business Forum in Nairobi, attended by President Uhuru Kenyatta and his South African counterpart Jacob Zuma, said the two countries should sign a bilateral agreement to fast-track trade.
The businessmen also want visa restrictions imposed on Kenyans travelling to South African lifted.
“African countries have largely been brothers in the political context, but this is not translated into the economic context. The rest of the world is scrambling for Africa, why not us?” posed the Kenya Association of Manufacturers (KAM) chairwoman Flora Mutahi.
Ms Mutahi said intra-Africa trade stands at 11 per cent, while Africa’s trade with the European Union is 65 per cent, the US 40 per cent and Asia at 25 per cent.
Kenya’s exports to South Africa amounted to $15.98 million, representing 0.3 per cent of the $5.3 billion exported to the rest of the world in 2015, according to Kenya Private Sector Alliance (Kepsa).
The main Kenyan exports to South Africa comprise of vegetables, coffee, tea, tobacco products, cut flowers and mechanical appliances. Kenya’s imports from South Africa amounted to $605.28 million in 2015.
Major imports from the country include iron, steel, vehicles and electrical machineries.
Trade imbalance between the two countries is skewed in favour of South Africa.
Carol Kariuki, the Kepsa chief executive, urged both governments to address the issues of inadequate industrial skills, support for manufacturing and industrialisation, and improvement of the immigration process.
The business community also noted that Kenyan value added products were uncompetitive due to constraints such as high costs of inputs and technology.
Both Kenya and South Africa private sector lobbies had identified some opportunities to build trade between the two countries.
These include the need for partnership in infrastructure development like maritime for locally owned ships, railways and energy as well as further improving the business environment, trade and investment by reducing trade barriers.
“There is need for common standards for professionals so that people like lawyers, engineers and doctors can operate between the two countries without further training,” said Ms Kariuki.
“We would like to see African goods and products treated as local products so that we can start addressing issues of rules of origin,” she added.
Fast-tracking regional agreements, especially tripartite free trade area of East Africa Community (EAC), COMESA and SADC which will establish a market constituting 26 countries was also put on the table.
President Zuma said Africa’s future looks bright as seen through the tripartite free trade area which has 600 million people with a GDP of $1 trillion.
“The two countries have good foundations for economic growth through good national economic development plans of Kenya’s Vision 2030 and South Africa’s National Development Plan of 2030,” said Mr Zuma.
He said that both plans are intended to transform the economies into rapidly industrialised nations offering their citizens a high quality of life.
President Kenyatta said the two governments need to do more to facilitate trade and allow free movement of goods and people sooner rather than later.
“We have made significant progress in these areas; eliminating or lowering many of the barriers to trade and movement that once existed. And we will continue to make progress,” said Mr Kenyatta.
He said that Kenya and South Africa are leading the process of integration in their respective regions as per the goals of the African Union.
“The full potential of Africa cannot be exploited if we are not working in harmony,” said Mr Kenyatta.
Remarks by President Jacob Zuma on the Occasion of the Kenya-South Africa Business Forum
Good afternoon to you all.
It gives me great pleasure to address this esteemed business forum of our two countries.
Let me begin by extending our appreciation of the of hospitality and warm welcome accorded to us by His Excellency, President Kenyatta and the people of Kenya.
This is a historic and significant State Visit for South Africa, which
will contribute immensely to the deepening of relations between the two countries and people.
We had very fruitful and productive bilateral discussions this morning with President Kenyatta.
We are both very upbeat about the visit and believe it is the beginning of a new chapter in the history of bilateral relations between South Africa and Kenya.
We are writing a chapter of deeper cooperation and fraternal relations which will contribute meaningfully in lifting our peoples from the clutches of poverty and underdevelopment.
We have agreed among others to prioritise economic cooperation between our two countries. The business forum is thus important as provides an avenue to discuss this important issue, of further enhancing trade and investments between South Africa and Kenya.
At the bilateral level, our current trade totals 7.9 billion rand.
I am sure you would concur distinguished guests, that this does not reflect the true potential of our two economies.
We have a good foundation to build from. More than 60 South African companies operate in Kenya currently.
We encourage more South African businesses to consider Kenya as an investment destination, and encouraging Kenyan businesses to do likewise in South Africa.
New sources of economic growth must be enhanced, with emphasis on the agri-business, services, automotives, capital equipment, infrastructure, energy and information technology sectors.
This would require a concerted effort towards developing industrial clusters, and an adjustment of policies to ensure global competitiveness.
Initiatives to this effect are already underway through a quadrilateral arrangement between South Africa, Kenya, Nigeria and Egypt, to promote industrialisation. This is a very important development for the continent.
The future also looks bright for the continent and our respective regions, given the developments such as the Tripartite Free Trade Area between SADC, the COMESA and the East African Community.
This Tripartite Free Trade Area combines the three major regional economic communities of approximately 600 million people and a combined GDP of one trillion US dollars.
For our two countries, we have a good foundation for economic growth, given the synergy between our national development plans, the Kenyan Vision 2030 and South Africa’s National Development Plan 2030.
Both aim to transform our economies into rapidly industrialised countries offering all their citizens a high quality of life.
The plans furthermore outline key infrastructure development projects including, the strengthening of electricity generation and the expansion of transport networks. This presents mutually beneficial investment opportunities.
We stand ready to work with the business sectors of the two countries on this march towards economic growth and prosperity.
Let me emphasise that in our discussions earlier we agreed on the need to create a good environment for easier movement of goods and people between the two countries.
This will contribute to promote the ease of doing business between the two countries.
This is in line with the general sentiment within the African Union, that African nations should soften their borders to promote people to people cooperation and intra-African trade.
It is also in line with the drive for regional integration in the continent.
Further discussions will be taking place between two countries on these issues of migration and non-tariff barriers to trade.
Indeed, the State Visit has gone very well thus far.
We urge you, as the business sector, to take advantage of this strategic partnership between the two economies.
I wish this Business Forum every success.
Asante Sana!
Issued by: The Presidency
