Business Daily (Nairobi)
Steve Mbogo
13 October 2009
South Africa and Kenya plan to launch a joint trade commission by the end of the year to guide investors on opportunities.
It will also work to increase the volume of trade between the two countries.
Once the Commission is launched at a date to be announced, the team will be expected to facilitate the launch of a joint chamber of commerce to be in the hands of the private sector.
The two bodies are part of the implementation of the Bilateral Trade Agreement signed by the two countries in September last year.
"What is intended is to streamline our trade agreement so that the tariff barriers that exist because we belong to different African trade blocs do not impede trade," said SA's High Commissioner to Kenya, Tony Gab Msimanga.
Kenya belongs to the Common Market of Eastern and Southern Africa (Comesa) while South Africa belongs to Southern Africa Development Community (SADC).
Exporters of the two countries face restrictive tariffs because of this reality, which slows the pace of trade.
"The trading blocs were good intentioned but with time, they have become a problem. They impose tariffs that are slowing intra-Africa trade."
But he said the recent signing of a memorandum of understanding between, Comesa and SADC and earlier with East Africa Community was a step in the right direction.
Issues the trade commission is expected to address include identifying investment opportunities and areas for economic cooperation.
For instance, South Africa is already helping some of the local authorities in Kenya to improve their financial management through an exchange programme between the Durban Local Council and the Nairobi City Council.
Two officials from Durban were in Nairobi recently where they met officials from the Ministry for Local Government and the Mayor of Nairobi.
The mayor is expected to visit Durban to learn on the financial management at the councils.
Kenya is sending engineers, medical experts and academics to South Africa to bridge existing gaps.
"We made a deliberate effort to encourage Kenya engineers to participate in the construction of 2010 World Cup stadiums," said the High Commissioner.
Under the Commission, South Africa will help Kenya to set up a nuclear energy electricity plant to help the country diversify from hydro-generation, which is dependent on weather.
The new steps to open trade corridors is also expected to erase suspicion that has engulfed the private sectors of the two countries.
South African businesses have not had a rosy experience in Kenya with massive closures in the late 1990s and early 2000.
A report by South Africa Institute of International Affairs has cited hostility between the business players in the two countries and Kenya's lack of adequate infrastructure and slow pace of business reforms as some of the causes of the failures.
However, the situation has been improving with Kenya making several business reforms like reduction of business licenses, reconstruction of roads and improving information technology networks.
"The private sector has to try to break this suspicion for their own good. The ball is in their court," said Mr Msimanga. Balance of trade remains strongly in favour of South Africa at a ratio of 20 to 1.
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