Kenya has good economic strength and is strategically located as a gateway to African trade. Nevertheless, to maximise its export potential and increase global edge, Kenya needs to take a holistic approach to the matter that will incorporate fiscal reforms, industrial policy, and international benchmarking.
One of the reasons why it is important to strengthen exports is that they will enhance production, employment rates and long-term economic stability in the domestic market, not only by enhancing the balance of trade and payments but also by boosting production.
The foundation of export growth lies in diversification and industrial upgrading. Kenya’s manufacturing contribution to gross domestic product remains below eight percent, significantly lower than the 15 percent target envisioned in Vision 2030.
Expanding industrial capacity, especially in agro-processing, textiles, automotive assembly, and ICT services, will enable the country to increase its export basket’s complexity and value.
Establishing specialised export processing zones and industrial parks closer to raw material sources can cut logistics costs and enhance production efficiency. Increasing the level of quality, investing in the logistics infrastructure, and local industries to comply with global standards will play one of the key roles in gaining the privileges to high-value markets.
The effect of government policy is definitive in determining competitiveness in exports. President William Ruto’s administration has identified a set of ambitious proposals to make Kenya an export-driven economy with the Bottom-Up Economic Transformation Agenda.
The focus of this plan is on industrial parks, export processing zones, and enhancement of reach to the market via trade agreements like the African Continental Free Trade Area and bilateral agreements with the United States and the European Union.
The Kenya Export Promotion and Branding Agency and the Kenya Investment Authority should be empowered to coordinate aggressively in market intelligence, export promotion, and investment attraction.
This will have to be effected with good implementation, which will involve lean bureaucracy, transparency and policy implementation uniformly to earn investor confidence.
An expanding tax regime can be used as a boost to exports. Kenya needs to diversify and streamline tax concessions to firms involved in export business by making sure that they promote innovation and local value addition instead of just providing relief.
Reduction of export taxes imposed on intermediate goods, tax holidays in the strategic industries, and alignment of county levies will reduce the cost of production and increase competitiveness.
Simultaneously, the Kenya Revenue Authority should streamline compliance procedures and capitalise on the digital solutions to make compliance efficient and not to undercut revenue collection.
Japan offers a compelling model for Kenya’s export transformation.
Post-war Japan’s economic miracle was built on three pillars: government–industry collaboration, technology-driven innovation, and a disciplined export strategy anchored in quality.
By combining the efforts of the government and industry, Japan fostered individual competitiveness sectors through investments in research, technology transfer and developing their skills.
Kenya can replicate this template by establishing special export promotion agencies that would integrate the academia, the government, and the private sector, with the end goal of spurring innovation.
A growing and long-term vision that focuses on productivity, quality control, and exportation of the brand will allow the Kenyan products to compete in the world not on prices alone, but on merit.
An enhanced export base will generate a profound multiplier effect across the economy. More production to supply the world will directly employ people in manufacturing, logistics, and agribusiness and increase demand in local service provision through transport, banking, and information and communications technology.
An increasing export base makes the shilling strong, cuts the current account deficit, and improves Kenya’s credit position in world markets.
Kenya’s journey toward global export competitiveness demands coordinated action, anchored on government facilitation, tax reforms, industrial diversification, and sustainable production.
By adopting strategic lessons from global exemplars like Japan, implementing predictable fiscal incentives, and accelerating infrastructure development, Kenya can transition from an export-dependent to an export-driven economy.
President Ruto’s export-oriented agenda provides a timely blueprint. What remains is steadfast execution; transforming policy intent into measurable outcomes that elevate Kenya as a formidable player in global trade.
The writer is an economist and business consultant. Email: [email protected]
