Monday, September 22, 2008

SA/Kenya trade agreement aims to tackle trade deficit

Kenyan Deputy Prime Minister of Trade Uhuru Kenyatta on Friday said that the trade deficit between Kenya and South Africa was currently at 20-to-one, with Kenya exporting goods worth only four-billion shillings (some R440-million) while importing goods of about 45-billion shillings (about R5-billion) from South Africa.

South Africa’s Trade and Industry Minister, Mandisi Mphalwa, responded that there were indeed trade challenges between the two countries, and that South Africa hoped to address this urgently. 

He added that it was with this acknowledgement that South Africa had sent a mission to Nairobi in 2006 to investigate the possibility of bilateral trade agreements and a memorandum of understanding on economic cooperation.

Friday’s event was held to officially sign these agreements in the hope of building a mutually beneficial trade agreement. “This is indeed a demonstration of our commitment to create an enabling environment that not only facilitates common values towards bilateral economic relations, but also affirms our resolve to improve measures for a balanced trade,” Mphalwa said.

He added that it was important to reflect on the importance of the two countries’ role within their respective regional economic communities, and their roles to drive economic development in line with the fundamental commitment to realise the New Economic Partnership for Africa’s Development (Nepad).

“The success of the project for economic regeneration and revival on the African continent is not going to happen by accident. It has to be led,” Mphalwa said, adding that countries that were considered successful had the responsibility of ensuring Nepad’s success. “I think that South Africa and Kenya are firmly located in that space.”

He noted that the reflections made by Africa’s leadership, that as a continent its collective development lay in partnership, had been proven correct. “We need to vigorously engage on how we optimise internal resources in terms of our ability to process our own raw material to finished goods. Our countries have the potential to achieve greatly increased trade through the active promotion and development of a strong and viable manufacturing sector, and to diversify our economies.”

Mphalwa stated that South Africa viewed Kenya as an important partner within the East African region, owing to its geopolitical position and its economic strength. He said the country also offered access to other partners in that region.