Trade Policy and Strategy Framework

Future Directions of Trade Policy

• Unlike in the past where much focus was on upstream capital intensive projects, the current focus on is on down-stream, more labour intensive, and employment creating activities.
• Major initiatives in tariff policy since 2007 has been to lower tariffs on upstream, capital intensive industries as these produce inputs that are cost-items for downstream industries.

Future Directions of Trade Policy

• Investigations are continuing. If evidence leads to the conclusion that it is necessary to reduce or remove duties where clear benefits would be gained by downstream sectors, this will be done.
• Where processes of “self-discovery” recommend tariff increases that industry will be supported.
• Industrial policy sets parameters for tariff policy.

Agricultural Trade Strategy

• Over the past 15 years agriculture has undergone key reforms, paving a way for entry into global value chains.
• Trade in the sector is highly distorted as a result of subsidies in OECD countries.
• There are strong backward-and-forward linkages to other sectors of the economy: purchase of fertilisers, chemicals and implements; as well as supply of raw materials to industry in the food value chain.
• About 70% of agricultural output is used as intermediates.
• The sector accounts for 8% of formal employment.

Agriculture Trade Strategy

• Tariffs are a tool to promote sectoral growth, employment creation, investment attraction, productivity growth, food security & rural development.
• Tariff determination will be made on a case-by-case basis, paying particular attention to global distortions in agricultural trade.
• Striking a balance between the profitability of farmers, including addressing supply-side constraints and competition; consumer prices, especially given the price-raising effects of tariffs for the vulnerable.

Agricultural Trade Strategy

• The sector also carries significance for food security as well as to create basis for economic activity in rural communities.
• Jobs created per unit of investment is higher than any other sector, evidence of the sector’s high potential for employment and poverty alleviation.
• Share of agricultural exports in total exports – 7%; share of processed agricultural products within the country’s total exports has increased to more than 50%.