As “the gateway to East Africa,” Kenya plays a vital role as a transportation hub for much of sub-Saharan Africa. As one of Africa’s more consolidated democracies and a reliable counterterrorism ally, Kenya has emerged as the United States’ partner of choice on the continent.
As the United States of America strives to position itself as a critical geopolitical ally and economic partner to Kenya, China has remained a strong investment partner for several years. Both the US and China are important trade partners of Kenya. Rising economic and diplomatic tensions between the US and China in East Africa will harm the ongoing implementation of the African Continental Free Trade Area.
Many experts agree that Kenya’s political and economic instability will hurt AfCFTA as a game-changer for inter-African trade, economic growth, and capital investment across the African continent.
Kenya is an economic giant in East Africa
Kenya plays many roles in East Africa, including as an economic and transportation hub, a leader in technology, and a destination for international trade. Kenya is the largest and most advanced economy in East and Central Africa, accounting for more than half of the region’s GDP. Its economy is driven by agriculture, the service industry, and tourism. Kenya’s traditional cash crops are tea and coffee, and fresh flowers are a growing export. The country also has a young, educated workforce that has helped Kenya become a leader in mobile money and information and communication technology.
As the largest economy in East Africa, Kenya represents more than 40% of the region’s GDP. Kenya is seen as a stable nation, serving as the regional hub for many international corporations, including American companies and multiple UN regional offices.
Kenya and its role in the African Continental Free Trade Area implementation
Kenya was among the first African countries to sign the African Continental Free Trade Area (AfCFTA) agreement in 2018, along with Ghana. The AfCFTA aims to create a single market for goods and services across the African continent, which could have significant economic benefits for Kenya. The African Continental Free Trade Area (AfCFTA) is a game-changing initiative that creates a unified market for goods and services across the African continent. AfCFTA presents significant opportunities for Kenya to expand its African export markets, contributing to GDP growth and sustainable economic development.
President William Ruto along with President Paul Kagame of Rwanda have been at the forefront of the battle to push for a successful implementation of the African Continental Free Trade Area.
“I want to encourage the AfCFTA to work with each of the agencies of the African Union in leveraging technology to accelerate the movement of goods and services across our countries and accelerate progress in all other fields,” Ruto said.
“AfCFTA is the single most potent instrument for the transformation of Africa,” the President said.
President Ruto has done a lot to help encourage the AfCFTA secretariat and other agencies of the African Union to accelerate the implementation of the African Continental Free Trade Area to advance inter-African trade, drive capital investments, and build a dynamic SME ecosystem.
“In the East Africa block, Kenya has served as a regional interlocker in championing regional integration,” Hill says. “Kenya has long advocated for more integrated road and rail networks to increase trade between East African countries.”
The tourism sector in Kenya is one of the most diverse and vibrant in East Africa, with increased investments in conferences, eco-tourism, and leisure tourism. In 2022, the sector rebounded from the COVID-19 slump, with international arrivals increasing by 76.9 % from the previous year. (KNBS Economic Survey 2022).
Destroying Kenya will kill AfCFTA’s investment competitiveness in East Africa
Kenya is a strong investment destination for several retail and trade multinational corporations. Its strategic location gives global investors access to the East African Community. Therefore, as the strongest industrial base in the East Africa region, the weakening of the Kenyan economy will slow the AfCFTA implementation process across the region.
There are several finance and development finance institutions (DFIs) based in Kenya, including multilateral institutions, such as the African Development Bank, the International Finance Corporation (IFC), the African Development Bank, and bilateral DFIs, including the U.S. Development Finance Corporation (DFC). The African Union will lose a great opportunity if Kenya is destroyed economically.
An economic downturn in Kenya may directly or indirectly affect the entire East African trade markets with the prospect of successfully implementing the African Continental Free Trade Area. An economic downturn will be a decline in the growth rate of the country’s gross domestic product (GDP). GDP is the total market value of all goods and services produced within a country.
What to do to prevent Kenya’s programmed destabilization?
African nations are good at watching other African nations suffer. African governments are excellent at not supporting their fellow Africans when their houses are in flames while the West unites to defend their economic interests in Africa.
Kenya has made good progress as a dynamic catalyst for successfully implementing the African Continental Free Trade Area in East Africa. Therefore, it would be foolish for other African nations to let this beautiful country sink into despair, collapse, and disappear economically.
That said, the African Union should play its role as its founding fathers wanted it. Kenya’s economic stability is crucial for East Africa. The country remains East Africa’s largest and most important business, financial, and transportation hub, with 80% of the region’s trade flowing through the Mombasa Port.
Part of supporting the country as a dynamic location for trade and investment will be the fight against internal, regional, and international actors that seek to fragilize Kenya. Kenya’s economy represents a significant opportunity for regional trade development and continental economic cooperation.
Conclusion
Everybody agrees that Kenya’s political instability will harm economic and trade cooperation in the East African region. The general thrust of the point here is that vibrant inter-African trade necessitates a strong Kenya free from destabilization, be it local, regional, or international.
In the long-term perspective, rising economic and geopolitical tensions between the US and China in East Africa will harm the ongoing implementation of the African Continental Free Trade Area.
A crucial strategic decision in Africa is whether to let Kenya fight alone or join forces with the East African country in its fight against dark forces.
An open question remains, however, as to why most African nations, the African Union, and the African Continental Free Trade Area Secretariat are not openly supporting Kenya in these geopolitical competition tensions and difficult times.
Author The Author
Jean Narcisse Djaha, PhD is the Founding President and Chairman of the African Council on Foreign Relations. He is guided by Romans 8:30” And those he predestined, he also called; those he called, he also justified; those he justified, he also glorified”.
