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Kenya-S.Africa to enhance trade relations

Kenya Broadcasting Corporation, Kenya

Kenya-S.Africa to enhance trade relations

By Claire Wanja/KNA

12 February 2009

There is need to address the prevailing trade imbalance between Kenya and South Africa in order to enhance trade relations between the two countries Trade Permanent Secretary Dr (Eng) Cyrus Njiru has said.

Njiru said that the balance of trade is currently strongly in favour of South Africa at a ratio of 20:1 and called on businessmen to add value to their products in order to enhance trade.

Speaking when he officially opened a bilateral consultative meeting between Kenya and South Africa at a Nairobi Hotel Thursday, the PS said the meeting would look for ways to address the trade constraints that affect the two countries.

Dr. Njiru termed the current meeting as significant in charting the way forward for the trade relations between the nations and the first step towards the implementation of a bilateral trade agreement and memorandum of understanding signed by the leaders of the two countries last year.

"The implementation of the signed agreement requires commitment that is reinforced by interventions such as formation of joint programmes of implementation to ensure everything runs smoothly," the PS said.

He said that a permanent framework involving key stakeholders from the two countries would be formed to provide analytical sense in the developments in the International Trade Environment especially the Kenya-South Africa trade sphere.

Njiru added that the experts would analyze the trade situation in both countries, identify barriers or opportunities, provide solutions that promote trade, security and facilitate wealth creation as well as creating an enabling environment for business to thrive.

Last year the three trading blocs: COMESA, SADC and EAC agreed to form a free trade area in order to create a stronger market.

At the same time the Permanent Secretary said the Government has endeavored to sustain Kenya as the most attractive investment destination through the private sector development strategy whose aim is to create an environment conducive to private sector by alleviating major constraints to competitiveness.

He added that the Government was working towards reducing the cost of doing business in order to create an enabling environment for business to thrive.

The two-day consultative meeting is expected to create the way forward in bringing about a free market and trade area with the two countries hoping to open up trade between the East and Southern African countries.

At the same time, the PS said the Government has increased its efforts towards improving infrastructure in a bid to reduce the high cost of production and encourage competition and efficiency in trade while boosting the economy of the country.

He said that improvement in the energy and transport sectors would extremely reduce the cost of production, which he noted had remained considerably high in the recent past.

Dr. Njru added that for Kenya to trade equally with other countries like South Africa with sufficient infrastructure, a lot had to be done to improve the precarious situation in the country.

"Trade and investment are the only way to improve the living standards of our people and with the right infrastructure to facilitate trading activities we could empower the people to make ends meet," the PS said.

Dr. Njiru reiterated the government’s commitment to ensure that there is competition in the Kenyan market which he expects to expand to other countries in a bid to boost the economy and alleviate the living standards of its citizens.

The PS said that the government was committed to the reduction of the cost of doing business in the country saying it had reduced the cost of issuance of licenses as well as improving infrastructure to facilitate growth in the market.

The PS’s comments on infrastructure comes weeks after the World Bank released a report on the situation of infrastructure in Kenya showing that there has only been a one per cent growth in the last twenty years.

Kenya should put a sustainable development on infrastructure, a priority and place growth enhancing policies, projects and programmes necessary for the achievement of the Millennium Development Goal according to World Bank’s recommendations.