Kenya stands at a crossroads. The global trade landscape is shifting, and the rules that once governed commerce no longer hold firm.
President Trump’s aggressive trade policies have introduced new uncertainties, threatening Kenya’s access to U.S. markets.
Meanwhile, the World Trade Organization (WTO) is struggling to maintain order as major economies embrace protectionism. Accordingly, Kenya must act—decisively and strategically.
Enter AfCFTA, Africa’s most ambitious trade initiative. If implemented effectively, it could insulate Kenya from external shocks while positioning the country as a manufacturing and logistics hub.
Yet, success will not come easily. AfCFTA is a vast and complex framework, and without careful execution, its promise could remain unrealized. Nevertheless, Kenya has the opportunity to lead.
Reducing Dependence on Unstable Western Markets
For years, Kenya has relied on trade agreements with the United States and the European Union to access foreign markets.
AGOA, for instance, has provided duty-free access to U.S. markets, fueling growth in the textile sector. However, Trump’s insistence on “fair and reciprocal” trade raises doubts about the future of such arrangements. Eventually, Kenya may face higher tariffs, stricter rules, or outright exclusion. Consequently, waiting for clarity from Washington is not an option.
AfCFTA provides a crucial alternative. By eliminating tariffs on 90% of goods traded within Africa, it promises to unlock new opportunities. Instead of depending on distant and unpredictable Western markets, Kenya can strengthen regional trade ties under a framework that is more stable and—more importantly—African-owned.
Additionally, regional trade allows Kenya to move beyond raw exports. Rather than sending unprocessed coffee to Europe or cotton to America, Kenya can build industries that process these commodities locally before exporting them to African markets. Thus, AfCFTA could be a catalyst for industrialization—if Kenya is prepared to capitalize on it.
The Roadblocks to AfCFTA’s Success
Although AfCFTA is an ambitious vision, its implementation remains fraught with challenges. Moreover, Africa’s trade history is littered with agreements that never lived up to their potential. If Kenya is to avoid repeating past mistakes, it must address several key obstacles.
1.Non-Tariff Barriers (NTBs) Remain Pervasive.
Bureaucratic red tape, inconsistent regulations, and slow customs clearance still plague African trade. A truck carrying goods from Mombasa to Kigali, for instance, faces multiple roadblocks, lengthy inspections, and unpredictable fees. Therefore, harmonizing trade rules and streamlining customs procedures is critical.
2.Infrastructure Deficits Hinder Trade Efficiency.
Good policies mean little without the infrastructure to support them. Kenya has made progress with projects like the Standard Gauge Railway (SGR) and the Lamu Port, yet more is needed. Roads connecting Kenya to neighboring markets remain underdeveloped, and inefficiencies at Mombasa Port increase costs. Accordingly, accelerating infrastructure investment is non-negotiable.
3.Policy Coordination Remains Weak.
Each African country has its own tax structure, product standards, and regulatory framework. This lack of uniformity complicates trade. Kenya must take a leadership role in pushing for harmonization—otherwise, AfCFTA’s benefits will remain theoretical.
4.Protectionist Tendencies Persist.
Although AfCFTA promises free trade, some countries remain hesitant to open their markets. Governments fear that stronger economies like Kenya and South Africa will dominate. Hence, Kenya must engage diplomatically to ensure reciprocal market access.
5.Dispute Resolution Mechanisms Are Underdeveloped.
When trade conflicts arise, businesses need fast and fair resolution. Yet, the AfCFTA dispute settlement system remains weak. Unless strengthened, disputes will fester, discouraging investment and undermining confidence in the agreement.
Kenya’s Competitive Advantage: Becoming a Manufacturing and Logistics Hub
If AfCFTA succeeds, Kenya has the potential to emerge as a dominant force in African trade. However, this will not happen by default; Kenya must be deliberate in positioning itself as a hub for manufacturing and logistics.
1.Industrialization Must Be Prioritized.
•Kenya must move beyond exporting raw materials. Instead, it should develop processing industries that add value before export. For example, rather than shipping raw tea, Kenya could expand tea blending and packaging industries for the African market.
•The same applies to coffee, textiles, and agro-processing. By focusing on value addition, Kenya will increase revenues, create jobs, and retain more wealth within its borders.
2.Trade Corridors Must Be Strengthened.
•Kenya’s geographical position makes it the natural gateway for East and Central African trade. Yet, logistical bottlenecks hinder efficiency. To address this, Kenya must improve connectivity along the Northern Corridor and fast-track the completion of the LAPSSET project.
•Better road and rail links to Uganda, Rwanda, Ethiopia, and South Sudan will expand Kenya’s trade reach and cement its role as a regional hub.
3.Digital Trade Must Be Leveraged.
•Kenya is already a leader in mobile money and fintech. Expanding e-commerce platforms and digital payment systems will make trade across Africa smoother and faster.
•A pan-African payment system that eliminates currency exchange barriers will further enhance trade efficiency.
4.Strategic Trade Agreements Must Be Pursued.
•Kenya must take a proactive role in shaping AfCFTA policies to ensure that regional trade agreements favor its national interests.
•Special agreements with key markets like Nigeria, Egypt, and South Africa can help secure long-term trade stability.
The Urgency of Now
The world is shifting, and Kenya must shift with it. The United States will continue to prioritize its own economic interests, and waiting for favorable trade terms is a losing strategy. Meanwhile, the European Union has its own challenges, making it a less reliable trade partner.
AfCFTA is Kenya’s best opportunity to reduce dependence on Western markets while accelerating industrialization. However, opportunities mean nothing without action. Kenya must strengthen its infrastructure, push for regulatory harmonization, and enhance its industrial capacity.
In the end, the choice is simple: Kenya can either remain at the mercy of foreign economic policies, or it can take control of its own destiny through AfCFTA. The time to act is now.
By Timothy Kamau
Timothy Kamau is a strategic analyst specializing in political economy, international trade, and geopolitics. He advises on Kenya’s positioning in the evolving global economic order.
