Africa: Kenya Exports Batteries to Ghana in First AfCFTA Trading Deal

The African Continental Free Trade Area (AfCFTA), with 54 countries participating, is creating the largest free trade area in the world.
26 September 2022

Kenya officially began trade under the Africa Continental Free Trade Area on Friday when Exide batteries made in Kenya arrived in the Port of Tema, Ghana (AfCFTA).

Amb. Eliphas Barine, the Kenyan High Commissioner to Ghana, was present when a representative of Kenya's Associated Battery Manufacturing E.A. Ltd unveiled the cargo and handed the shipment to the importer, Gifty Fianu of Ghana's Yesudem Company Ltd.

  • Kenya officially began trade under the Africa Continental Free Trade Area on Friday when Exide batteries made in Kenya arrived in the Port of Tema, Ghana (AfCFTA)
  • Thanks to the trial phase, Kenya will now be able to access markets in Central Africa and West Africa at preferential prices
  • AfCFTA Preferences are being used as part of the Initiative to jump-start trade between and among State Parties that have expressed a desire to begin substantive commercial relations

Kenya is one of the six nations chosen to participate in the AfCFTA Initiative on Guided Trade's pilot phase after it was realised that no trading had occurred one and a half years after the start of the preferential trading system on January 1, 2021.

The ninth meeting of the AfCFTA Council of Ministers charged for trade occurred on July 25 and 26, 2022, in Accra, Ghana, and announced the Start of Trade during the Pilot Phase.

Seven nations were chosen to test out commerce in the continental free trade zone for Africa during the summit, including Ghana, Kenya, Tunisia, Cameroon, Egypt, and Mauritius.

Despite being in different economic blocs than nations like Ghana and Tunisia, Kenya will now be able to access markets in Central Africa and West Africa at preferential prices thanks to the trial phase.

Kenya published its National African Continental Free Trade Area (AfCFTA) Implementation Strategy 2022-2027 on August 4, 2022.

Kenya is one of the cohorts participating in the pilot phase of trade. Given Kenya's participation in the pilot phase, the Strategy is important because it aims to increase chances for industrial diversification, investment, job creation, and closer linkages with other African nations.

An Ad hoc Committee will coordinate the AfCFTA Initiative on Guided Trade tasked with identifying the export products and facilitating market access, according to the announcement made during the launch by Kenya's Cabinet Secretary for Trade.

AfCFTA Preferences are being used as part of the Initiative to jump-start trade between and among State Parties that have expressed a desire to begin substantive commercial relations.

The pilot countries must identify products that can reach the markets inside the six pilot nations.

Kenya has picked several products for this programme through an Ad Hoc Committee established to lead it. Tea, lithium-ion batteries, candy, leather bags, incinerators, beaded goods, leather bags, car filters, textiles, sisal fibre, avocados, and fresh food are a few of them.

Associated Battery Manufacturing E.A. Ltd is the first Kenyan business to begin conducting business under the AfCFTA. It is the only local business to export Exide batteries to the Ghanaian market.According to a statement from Kenya's Industrialization, Trade and Enterprise Development ministry,

"Kenya and Ghana are keen on exploiting the AfCFTA Agreement to create jobs and market for their goods and services, hence maintaining wealth inside the African continent."

AfCFTA Future Expectations

By the number of participating nations, the African Continental Free Trade Region (AfCFTA) agreement will establish the most extensive free trade area in the world.

According to figures, the AfCFTA will create a sizable single market with a population of more than 1.2 billion people and a combined GDP of nearly US$ 2.5 trillion (Sh 303.2 trillion).

Despite the importance of trade, Africa only accounts for 2.8% of all world trade.

Additionally, the intra-African trade share has been constrained at 18%.

It has the power to save 30 million people from the depths of severe poverty, but realising its full potential would need considerable governmental changes and steps to facilitate commerce.

The AfCFTA has a broad reach. The deal will lower tariffs between member nations and encompass regulatory measures like sanitary standards and technological trade obstacles, as well as policy areas like trade facilitation and services.

The full implementation of the AfCFTA would alter regional markets and economies and increase output in the service, manufacturing, and natural resource industries.

According to Albert Zeufack, the World Bank's country director for Angola, Burundi, the Democratic Republic of the Congo (DRC), and Sao Tome & Principe.

"The potential growth of jobs and wages inside the African Continental Free Trade Area might contribute to expanding possibilities for all Africans. Around 68 million people should be able to escape moderate poverty thanks to the AfCFTA, which will also increase the competitiveness of African nations. But for the agreement to fully benefit, proper implementation will be essential, as well thorough monitoring of repercussions on all workers--men and women, skilled and unskilled--across all countries and sectors."

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