International Trade Barriers
In 2018 Kenya implemented what they call the Integrated National Export Development and Promotion Strategy. Its goal is to increase exports from 8 percent of GDP, up to 25 percent by the year 2022. Kenya is prioritizing exports because they are essential to economic growth, and in turn, economic development. Recently Kenyas trade balance has been widening as imports have grown exponentially. In 2017, they imported $17 billion USD worth of goods, compared to only $6 billion USD of exports. This new strategy is aimed at 8 sectors in particular: textiles and apparel, agriculture, livestock, fishery's, oil and gas, and mining. Part of Kenya's issues surrounding exports stem from their lack of export diversification. in 2017, five commodity goods accounted fro 57 percent of all their exports. Part of the new strategy is to diversify manufacturing and exports of goods. In addition, Kenya has already previously signed multiple preferential trade agreements that they plan to exploit. These agreements grant Kenya access to over one billion consumers. As a part as a member of the East African Community (EAC), Kenya's international trade may have suffered in part due to non tariff trade barriers (Roundup: Kenya Launches Export Strategy to Eliminate Trade Deficit). In the past decade or so, the EAC has been working diligently to resolve the non tariff trade barriers that were effecting trade in the region. these include taxes in imports, safety standards, import bans, and cost increase due trade facilitation and customs union rules. Most of these non tariff barriers effect imports, which could have something to do with the trade imbalance in Kenya (Calibrese).
It remains to be seen whether or not Kenya's new strategy for export promotion will be effective in narrowing their trade balance. This is essential for the economic growth of Kenya, as well as economic development, as an increase in manufactured goods coming from Kenya will boost job creation and raise incomes, which will reduce income inequality. Furthermore, any profits gained from an increase in exports can be reinvested in the form of a fiscal dividend.
“Roundup: Kenya Launches Export Strategy to Eliminate Trade Deficit.” Xinhua, 1 Aug. 2018, www.xinhuanet.com/english/2018-08/01/c_137360078.htm.
Calibrese, Linda. "What types of
non-tariff barriers affect
the East African Community?" ODI. November 2016. PDF file.
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