Challenges facing manufacturing sector in trading under the African Continental Free Trade Area Framework: a case study of firms registered under Kenya Association of Manufacturers

Abstract

The African Continental Free Trade Area (AfCFTA) is a transformative initiative aimed at fostering intra-African trade by reducing trade barriers and creating a unified market. Despite its potential, Kenya’s manufacturing sector has yet to fully capitalize on this opportunity. This study examines the challenges hindering Kenyan manufacturers’ in trading under the AfCFTA framework, the challenges in compliance with Rules of Origin (RoO), and administrative hurdles faced by customs authorities. Using a qualitative research approach, the study explores the perspectives of key stakeholders, including members of the Kenya Association of Manufacturers (KAM), Custom Officials and Ministry of Industry, Trade and Investment.The study begins by providing an introduction to the AfCFTA framework, outlining its objectives and expected economic benefits. It highlights Kenya’s strategic position within AfCFTA and the existing policy framework supporting trade integration. The theoretical framework examines traditional trade theories; Mercantilism, Absolute Advantage Trade Theory and Comparative Advantage Theory (1817). modern trade theories; The Country Similarity Theory, Porter’s National Competitive Advantage Theory and The New Trade Theory, all providing a conceptual foundation for understanding the challenges of regional trade. It further explores empirical studies on trade facilitation, regulatory barriers, and the role of infrastructure in enabling market access. The research methodology is designed to capture in-depth qualitative insights through interviews and secondary data analysis. The study employs purposive sampling to select key industry players and policymakers, ensuring a diverse range of perspectives. The findings reveal that manufacturers face significant challenges in trading under the framework , including high compliance costs, lack of awareness regarding AfCFTA regulations, delays in obtaining RoO certification, and inefficient trade facilitation mechanisms. Customs officials also struggle with inconsistent RoO implementation, inadequate infrastructure at border points, and capacity constraints that affect trade efficiency. To address these challenges, the study proposes policy recommendations, such as strengthening trade facilitation infrastructure, streamlining RoO certification processes, digitalizing customs procedures, and enhancing stakeholder sensitization programs. The research underscores the need for targeted financial support, especially for Small and Medium Enterprises (SMEs), to improve their competitiveness in regional markets. By synthesizing key findings, this study contributes to the discourse on regional trade integration and economic policy. The recommendations provide actionable insights for policymakers, trade facilitators, and industry stakeholders to enhance Kenya’s manufacturing sector’s participation in AfCFTA, ultimately fostering economic growth and strengthening the country’s position in intra-African trade.