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Export-led growth key to boosting Kenya抯 economyTuesday, June 17, 2014 > 09:05:20
By Winsley Masese
A non-responsive export policy has hindered increased trade volumes between Kenya and partners. As a consequence, analysts are calling for a shift to a different model and market destination to realise an improved export led economy. Despite a fast expanding global economy and consumption, contribution of the export sector to Kenya’s Gross Domestic Product (GDP) has stagnated at an average of about 25 per cent, largely due to a neutral trade regime.
David Ndii, an economist and consultant with the Strategic Business Advisors (Africa) Ltd said a shift to the popular trade model could boost contribution of the export sector to the economy. Strategic Business Advisors (Africa) Ltd was consulted by the Export Promotion Council to establish thecause for the declining Kenyan export market and provide recommendations for a reversal. According to Ndii, a report filed as a result of the survey, takes a long term view and have a panoramic picture on what the Government should do to move forward from a disconnected export led economy.
To rejuvenate the export market, Ndii argued that the Gulf markets such as Abu Dhabi, Doha and Dubai offer the best opportunity for Kenya to improve its export volumes. The Gulf economies, he noted, are Kenya’s neighbours and historic trading partners. He added that with their rapid expanding economy especially the aviation sector, they would be a key market for Kenya’s horticultural and food products. Colonial masters Â “These economies do not have enough food and this is the comparative advantage Kenya can seize,” he said. “Traditionally, Kenya exports to the former colonial masters and that is not how trade grows, hence the need to change in market destination and strategy.”
Speaking during a consultative meeting in Nairobi on Friday, Ndii noted that though Kenya has a close affinity with its former colonial masters, it must diversify its export products and markets. “Though there would be volatility with diversification, the economy will be able to aggregate its markets and will see the sector become resilient and not vulnerable to economic shocks,” he said. A case in point, Ndii said is the travel advisories a number of countries issued against their citizens travelling to Kenya or in the country due to the security threats, followed by a dip in tourist arrivals. John Kashangaki, a consultant at the company, advised the Government to lead efforts for the branding of its commodities such as coffee and tea to win a global appeal.
“The stakeholders need to move fast to branding Kenyan coffee for easier access to the global market,” stated Kashangaki. He noted that Kenyan coffee enjoys a good market in the export market and with a brand; it would be easier to increase penetration in the globally even without adding value. The consultants also called for an agency to finance players in the export sector.