Fragmented product standards, testing and certification are impeding a push by Kenya’s factories and farms to expand exports under the African Continental Free Trade Area (AfCFTA), officials said, threatening to keep local goods out of regional markets.
David Beer, chief executive of TradeMark Africa, told business leaders in Nairobi that standards were becoming a critical barrier, with exports to African countries facing different verification and certification requirements in every market they enter.
“Not getting standards right is also a binary gatekeeper,” he said during the two-day American Chamber of Commerce Business Summit, which closed on Thursday.
He added that the secretariat of the Accra-based AfCFTA needed to ensure testing, certification and agreements existed “not only on paper, but” practically, if regional value chains were to become commercially viable.
The annual summit, in its fifth year, heard that as African countries move to deepen trade under AfCFTA, tariff barriers were falling while technical requirements remain fragmented across national borders.
This means cheaper access to foreign markets on paper may not translate into easier exports for Kenyan manufacturers and farmers unless countries recognise common standards and certification systems.
East Africa has made significant progress, Mr Beer said, with conformity assessment times falling from seven months to four months over the past five years.
Compliance costs have also been cut by half, while about 2,000 standards have been harmonised across the seven-nation East African Community bloc, creating practical gains for businesses.
But the next challenge is ensuring that harmonised standards are recognised and applied consistently across borders, rather than forcing exporters to repeat costly procedures.
“If I’m a company where I want to export to Tanzania, to Rwanda, but also to the US or to Germany, I’m going to have to go through a different process,” Mr Beer said.
He described the duplication as a “killer for businesses”, arguing that companies need one point of contact, one set of procedures and greater mutual recognition of certification.
The problem is particularly important for Kenya as it seeks to use AfCFTA to expand beyond its traditional regional markets and position Nairobi as a gateway for investment into Africa.
Mustafa Ibrahim, head of policy, research and strategic analysis at the Foreign Affairs ministry, said Kenya was investing in trade corridors, industrial parks and one-stop border posts to strengthen regional value chains.
Mr Ibrahim said Kenya has reduced non-tariff barriers within the EAC trading bloc and was seeking to position itself as a preferred destination for businesses from within and outside Africa.
However, the gains from better roads, ports and border infrastructure risk being weakened if companies continue to encounter separate technical requirements after their goods reach another market.
Mr Beer said the problem extends beyond the cost of compliance because repeated testing and certification can prevent regional value chains from developing at scale.
A manufacturer supplying several African markets may, as a result, have to navigate different requirements for the same product, raising costs and making smaller exporters less competitive.
This is hurting small and medium-sized Kenyan businesses, which have fewer resources to absorb repeated testing, certification and registration costs while exporting to regional markets than large multinational companies.
The US Chamber of Commerce said regulatory consistency has also become an important consideration for international investors deciding where to locate production and regional operations.
Kendra Gaither, president of the US-Africa Business Center, said investment committees were examining whether countries offered predictable regulations and whether companies could scale operations across continental markets.
“How can I be assured that the funding that we unlock, that we invest in the product, is going to be well-absorbed,” Ms Gaither said.
She said investors wanted rule of law, predictable regulations and a reasonable expectation of returns, making regulatory certainty an important part of Africa’s competition for foreign capital.
The standards question goes beyond trade administration for Kenya. It could determine whether manufacturers can use the continental market to achieve the scale needed to attract new investment.
