Kenya agrees to free trade but makes protectionist move
16 Jul 2018 - by
Kenya’s application to the Common Market for Eastern and Southern Africa (Comesa) to extend safeguards to cap the volume of sugar imports into the country are unjustified and fly in the face of its ratification of the African Continental Free Trade Area (AfCFTA) agreement.
This according to economist Ansetze Were who noted that as the country had done nothing to address the underlying sugar sector issues it should not be granted an extension of the safeguard which lapsed in 2012 and had already been extended to February this year.
“The government is not dealing with the real issues here but is busy seeking protection for an industry that is not competitive at all,” she said.
Were pointed out that the Kenyan government should instead be addressing the high cost of production and inefficiencies in the local industry.
According to the Trade Law Centre (Tralac), production costs in Kenya currently stand at around US$90 per tonne compared to Mauritius where the cost is about US$40 per tonne.
In a statement, Tralac also noted that the East African country had recently violated Comesa rules by importing sugar from outside the regional bloc without seeking approval from the body.
One of the reasons that the Kenyan Sugar Directorate gave for the application was to protect the country from cheap imports but Were said that this was one of the reasons that consumers in the country were paying such a high price for sugar in the first place as the safeguard restricted the movement of cheaper sugar.
The application was a contradictory move by Kenya as it was the first country to ratify the AfCFTA and trade experts have said that protectionism in African countries will hinder the effectiveness of the continental free trade agreement.
Annual sugar consumption in Kenya was recorded at 870 000 tonnes, while the country only produces around 600 000 tonnes a year, leaving the deficit to be covered by controlled imports from Comesa.