How will this new development affect Businesses in Kenya? This question is lingering in many if not all Players in the Businesses in Kenya and hence we have decided to break it down for you so that you may take advantage of the new opportunities and plan for the likely challenges that will come along with the Signing of the African Continental Free Trade Area (CFTA).
Africa has been for a long time now operated as estranged siblings with everyone for themselves and God for them all, this is as a result of the mindset impacted on us by our colonial masters as well as the existence of both the Tariff and Non –Tariff Barriers.
Once the African Continental Free Trade Area becomes a reality, it will result into a border-less Africa in terms of Trade in goods, Services, Jobs, Investment, Free movement of people, Intellectual Property Rights and Competitiveness.
Benefits of the African Continental Free Trade Area to Businesses in Kenya include the following;
Access to Expanded Markets – Businesses in Kenya will have access to a larger pool of consumers increasing from the 45 Million Kenyans to the 1.2 Billion people in Africa.
Lower Costs of Production – The Agreement will ease the processes for importing Raw Materials from other African Countries and it also brings about the Possibility of setting up an assembly firm in another country in order to access cheaper Factors of production and hence increase the bottom line of their Business.
Larger access to Human Resource – The CFTA will enable workers to move freely across boarders and hence Businesses in Kenya will have more options when hiring because they can Hire Foreigners without worrying about Work Permits.
On the Flip side Businesses in Kenya should brace themselves for the following challenges that may arise from the CFTA; Increased Competition from foreign Firms, Theft of Intellectual Property and Commodity Dumping.
In Conclusion, we are of the Opinion that the CFTA is good thing for the Businesses in Kenya and the Businesses in Africa despite the few challenges. We shall be giving you more insight on the CFTA in successive Blogs.
All the Best 🙂