Question

How has Kenya been affected by global trade blocks?

Answer 1

Kenya has been adversely affected by the global trade blocks as its imports are incredibly increasing and share of exports is decreasing. Kenya is importing three times more than the share of exports.

In kenya, The National Trade Policy is being launched at a time when the global trade landscape is facing emerging challenges. Over 70 percent of global trade is made up of manufactured goods. Intra-Africa trade averages about 12 percent whilst Kenya’s share of both the global pie as well as in Africa has been facing serious bottlenecks leading to a huge balance of trade deficit with most of our trading partners.

The Policy is cognizant of the prevailing situation in the trade sector, where overall trade performance, as measured by the Balance of Trade, has been poor and recording a deteriorating trend that is characterized by huge balance of trade deficits. In addition, the policy is developed in the context of the already documented fact about Kenya’s share in the regional and global market, which remains low, with huge potential already having been identified in sectors that Kenya has both comparative and competitive advantage. The fundamentals behind this situation are traced to a narrow export base, which is characterized by the predominance of primary products and dependence on limited traditional destination markets. Limited value addition in the manufacturing sector and the relatively underdeveloped intermediate and capital goods industries also explain the dismal trade performance.