Examining the Prospects of the African Continental Free Trade Area (Afcfta) in Facilitating Free Trade in Africa- a Case Study of Kenya

Abstract

Trade amongst the Africa countries has stayed low for a long period. The Africa Continental free trade agreement hence aimed at rectifying this. After being approved by all but one African Union (AU) member state, the African Continental Free Trade Area (AfCFTA) became the preferential trading area in the twenty-first century. Today the African Continental Free Trade Area has mostly concentrated around removing non-tariff obstacles. The research focused on the potential of the African continental free trade area in fostering free trade in Africa: a case study of Kenya. The research was based upon the following goals:; to Critically analyze the key policy challenges of attaining free trade in Africa, to assess and evaluate the key factors that may hinder AfCFTA in attaining free trade between Kenya and the rest of Africa, and to critically examine the impacts of AfCFTA in improving Kenya’s Trade. In achieving this the study was guided by international business theories of Comparative advantage and the Theory of the Second best. These theories are well-positioned to explain the phenomenon of Continental free trade area. The study used a descriptive-analytical research approach, using a mix of qualitative and quantitative research methodologies. The study's target group included 383 respondents from the Department of Foreign Affairs, the Ministry of Industrialization, Trade, and Enterprise Development, AfCFTA specialists, academics, the business community, and the general public. The qualitative data was summarized and categorized according to the themes and presented thematically. Analysis of quantitative data was done through Statistical Package for Social Sciences Version 21 to generate frequency distributions, percentages, and inferential statistics. The findings of the study on Key policy challenges of attaining free trade in Africa were that the low intra-African trade is due to a number of Policy challenges faced by the African continent. Non-Tariff Barriers, Rules of Origin and Regulatory Policies, Poor macroeconomic policies, and poor trade infrastructure were found out to be the main policy challenges to attaining free trade in Africa. The studys findings pointed out to a number of challenges that can hinder Kenya from gaining in the AfCFTA. factors like lack of a political will can also hinder Kenya from gaining from. Moreover, the conclusions of the research on the effect of AfCFTA are that it would increase Kenyan enterprises' competition at the industrial and firm levels by pooling output capacities, offering global access to markets, and enabling effective resource allocation across the continent.The study, therefore, recommends Customize and defining broader economic support for AfCFTA implementation and economic change, such as infrastructure support, digitalization, and national AfCFTA and trade facilitation committees. Kenya should look for additional COVID opportunities, such as in the pharmaceutical industry (and associated intellectual property assistance) and other regional value chains.