Trade Briefs

Kenyan manufacturing trade: an insight into Kenya’s regional and international trade

Kenyan manufacturing trade: an insight into Kenya’s regional and international trade

Registration to the tralac website is required to download publications.

22 Jun 2017

Author(s): Robert Juma, Danson Ndetei, Georgina Wachuka and Ron Sandrey

According to the Economic Complexity Index (ECI), Kenya is the 107th largest export economy. However, it suffers from a chronic negative trade balance as a result of overreliance on imports due to a stagnant manufacturing industry. In 2015, for example, Kenya exported to the value of $5.25 billion and imported to the value of $17.6 billion, leading to a negative trade balance of $12.3 billion. There is no doubt that Kenya is the East African Community’s (EAC) economic giant, and its role in the regional and global trade has an impact on the neighbours. However, it must invest more in manufacturing to spur growth.

Despite the fact that Kenya is ranked top as the most industrialised country in the EAC, manufacturing, which is said to be the pillar of industrialisation, only contributes a meagre 14% of the overall Gross Domestic Product (GDP). The future of Kenya’s economy will depend upon its ability to industrialise and establish reliable trading partners. Over the years, the government has aggressively worked towards expanding its export markets. The realisation of these noble intentions still remains elusive and worrying.

This trade brief analyses and compares the performance of Kenya’s exports to the world, with emphasis on regional economic communities in Africa (i.e. the Common Market for Eastern and Southern Africa – COMESA and the East African Community – EAC), the United States, the European Union (EU), and Asia (China and India).

* This trade brief was prepared during the week of 24 to 28 April 2017 as part of a tralac Geek Week in Nairobi, Kenya.

Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.