The Kenyan cabinet has approved the Africa Continental Free Trade Area (CFTA) treaty for ratification.
The Bill for ratifying the treaty, which was signed in Kigali, Rwanda, by 44 African nations, will be presented to Parliament “within the next few days” following its approval by Cabinet in its first sitting, a statement from the President Uhuru Kenyatta’s office indicates.
The Cabinet, which was chaired by President Uhuru Kenyatta and attended by Deputy President William Ruto, urged the private sector to take full advantage of the business opportunities presented by the CFTA deal to extend Kenya’s foothold into the other 54 African nations.
The CFTA agreement will come into effect after it is ratified by at least 22 countries and Kenya wants to be “one of the first countries that will adopt the agreement.”
“It is a great opportunity to export goods and services to the region and the continent,” the Cabinet said in a statement.
The CFTA will establish a single liberalised market of 1.2 billion people that will spur industrialisation, infrastructural development, economic diversification and trade across the continent.
The pact also seeks to promote industrial development through diversification, regional value chain development, agricultural development and food security.
When fully implemented, the treaty is expected to enable residents of all member countries to enjoy the convenience of a single passport and currency.
The trade deal also binds all state parties to eight objectives including the progressive elimination of tariffs and non-tariff barriers to trade in goods.
The signatory state parties are also expected to progressively liberalise trade in services.
Under the agreement, African countries will establish a mechanism for the settlement of disputes concerning their rights and obligations.
Meanwhile, Christine Lagarde, Managing Director of the International Monetary Fund (IMF), has welcomed the continental free trade area agreement labelling it a “big step towards diversified trade in Africa.”
“I welcome the Continental Free Trade Agreement (#CFTA). It is a big step toward deeper and more diversified trade among African countries. If fully implemented, it could lead to more investment, growth and jobs,” Largade tweeted on Tuesday.
The statement from Kenyan presidency also indicates that the Kenya Cabinet also approved for ratification the tripartite free trade agreement bringing together the Common Market for Eastern and Southern Africa (COMESA), the Southern African Development Community (SADC), and the East African Community (EAC).
The cabinet also approved a supplementary budget that continues with austerity measures to control expenditure.
The proposed revision to the financial year 2017/2018 will regularise approved expenditures and ensure micro-economic stability. Further borrowing will be contained and a fiscal deficit of 7.2 percent of GDP will be maintained.