The East African nation of Kenya is one of African countries making history to export under the AfCFTA Guided Trade Initiative (GTI) which was launched on the 7th of October, 2022 by exporting Kenyan-made batteries and Kenyan-produced tea to Ghana in West Africa.
The AfCFTA Guided Trade Initiative, a process where the AfCFTA Secretariat, in collaboration with the National AfCFTA Offices, guides selected businesses with specific limited products to trade from one party state to another, preferably across different regional economic blocs in Africa. So far, eight African countries including Cameroon, Egypt, Ghana, Kenya, Mauritius, Rwanda, Tanzania and now Tunsia have started trading under the AfCFTA, with the guidance of the AfCFTA Secretariat and its National Offices.
Speaking at the 2022 Alumni Conference of the Trade Law Centre (tralac), a tralac alumni and Senior Assistant Director of Corporate Communications in one of Kenya’s trade organisations, Elizabeth Mulae, said micro small and medium-sized enterprises are the economic backbone of Kenya, comprising 98 percent which form the greater majority of all business entities in Kenya.
“MSMEs account for a larger share of private sector enterprises across various sectors of the economy, with 14.1 percent rate of employment accounting for 93 percent total labour force in the Kenyan economy. MSMEs in Kenya also account for 24 percent of Kenyans GDP, with the micro enterprise alone representing 12 percent while small enterprises represent 11 percent of the GDP”.
In Kenya, the MSME sector provides the largest opportunity to absorbing low-skill and economically excluded segment of the labour force, including the youth, women, persons with disability, and those with low levels of education.
The sector provides enormous opportunities for socio-economic transformation of Kenya’s economy. However, generally, the potential of the sector is yet to be fully achieved in Kenya even though several attentions have been offered since 1965.
Like most MSMEs in other parts of Africa, Kenyan MSMEs are confronted with the challenges of market access, infrastructure, intellectual property rights, lack of conducive legal and regulatory environment, lack of capacity-building, low level of e-commerce and technology adoption, financial constraints and above all, lack of knowledge on the African Continental Free Trade Agreement (AfCFTA).
But there are now emerging opportunities which MSMEs across Africa are being encouraged to take advantage of which includes regional and continental trading blocs and trade agreements for expanded markets, like the AfCFTA.
In this regard, the Kenyan Government is putting in place innovative interventions like local, national and regional trade exhibition shows to facilitate access to markets by the MSMEs.
The Kenyan Government is also undertaking intensive formalisation of MSMEs through its Office of the Registrar of MSMEs. Other most important interventions coming from the Government of Kenya is the provision of grants or Business Development Supports (BDS) for MSMEs in Kenya.
“Currently, grants worth approximately Kshs2.7 billion have been disbursed to MSMEs. Some 69, 069 young people have received grants while 7,362 people have received Business Development Support.”
Worksites, affordable credit facilities through MSMEs fund, and capacity-building programmes like training and coaching of MSMEs, among many other interventions are also being provided by government.
“The MSMEs are also being guided through emerging global business trends for their adaptation, especially in the areas of e-commerce, mobile financial transactions, risk management and insurance against risk, digital transformation, and a special focus on health, particularly online healthcare delivery systems that ensure wellness while conducting businesses.”
With these efforts underway by the Government of Kenya, and the readiness of the world’s largest single trading market under the African Continental Free Trade Area (AfCFTA) which has already created a market of about 1.3 billion people, Kenyans are expecting to leave no stone unturned in harnessing the potential of its blossoming micro, small and medium sized sector, which is driving 98 percent of the economy of the thriving Eastern African nation.
