APRM • SECOND COUNTRY REVIEW REPORT OF THE REPUBLIC OF KENYA is up-to-date. The payment system with the EAC member states is being harmonised and Kenya’s trade with EAC members has increased; and it is in the forefront of the removal of trade barriers. 285. Kenya has also taken the lead to expand financial services in the regional member countries. However, some challenges are evident, namely, the existence of non-tariff barriers that hinder the free movement of goods and services, limited public awareness and participation in regional trade, lack of reciprocity from other member states of the EAC, and the presence of counterfeits that encumber trade in locally produced goods. The Government of Kenya is advised to spearhead the articulation of a compensatory mechanism whereby any member state that records revenue loss due to the removal of tariffs and trade barriers is adequately compensated. 286. Kenya has taken various steps over the years to facilitate trade and investments into the country. This has involved enacting various legislations that have improved the business environment and enhanced the ease of doing business significantly. Capacity has been developed for technology adoption and value addition and integrating MSMES into the market value chains, especially in the agricultural sector. Export products and markets are now diversified, but are still limited to agricultural products. 287. New discoveries of mineral and oil wealth have reinvigorated the importance of the extractive industry to the economy. Their commercial prospects offer great promise for significant earnings in foreign exchange and fiscal resources, and, ultimately, great potential to spur faster economy growth and job creation. The viability of the mineral wealth could also have a large impact on investor sentiments and an attractor of trade and investments. However, growth of this sector has created the challenge of designing an appropriate governance structure that should ensure that the benefits of the mineral wealth benefit all the stakeholders. 288. To reap the benefits of the mineral and oil wealth, and to avoid the pitfalls of other African mineral-rich countries, Kenya needs to strengthen its legal and regulatory framework for natural resources to enable prudent management of oil and gas resources. The current regulatory and fiscal regime is in need of reform, as it relates to petroleum and dates from 1986. Specifically, full minerals-specific and oil and gas –specific regulatory frameworks are required. 4.2 IMPLEMENTATION OF STANDARDS AND CODES 4.2.1 Summary of the Country Self-Assessment (CSAR) 289. The CSAR presents a summary of the relevant conventions, standards and codes. It shows those that were signed, ratified and enacted; and that a sizeable number of the treaties has been signed and enacted. The specific standards discussed are Code of Good Practices on Fiscal and Budget Transparency, International Standards in Auditing and Accounting, | 136 |