Effects of intra-African trade on Kenya economic growth (1970-96).

Economic growth in Kenya has been a daunting problem to policy makers since independence. The search for the best strategy to ensure sustainable economic growth has persistently failed to achieve specific targets defined in the various development plans. This makes the area fertile for continuos research. Towards this goal, emphasis has been placed on stimulating growth through trade. At the onset, Kenya adopted import substitution industrialization but since 1986 attempts at outward orientation has taken hold. Alongside this has been the emphasis on strengthening regional trading relations. The task of this study was to identify the effects of intra-African trade on Kenya's economic growth in the period 1970-1996. The econometric analysis used in this work has been beefed up with the review of Kenya's trading relations and other related trade literature. For econometric measurement data was analyzed separately for the East African sub-group, the rest of Africa and Africa in general. To facilitate quantitative analysis the ordinary least squares (OLS) method was used. The study established that exports to Africa has a powerful influence on Kenya's economic growth. The study found that throughout the liberalization period, 1986 to date exports to the subgroups and Africa in general are significant determinants of economic growth in Kenya. The study concluded that policies addressing trading relations in Africa should be comprehensive for Africa but with particular focus on regional ties given the unfolding regionalisation in the world.