Journal of African Trade

Volume 8, Issue 1, December 2021, Pages 33 - 50

Is it Export- or Import-Led Growth? The Case of Kenya

Authors
Peter Simiyu Wamalwa1, *, Maureen Were2,
1Research Department, Central Bank of Kenya Nairobi, Nairobi, Kenya
2United Nations University – World Institute for Development Economics Research, Helsinki, Finland

The paper was written while on secondment by UNU-WIDER to Uongozi Institute, Tanzania. The author’s institutional affiliation changed to Research Department, Central Bank of Kenya.

*Corresponding author. Email: wamalwasp@gmail.com
Corresponding Author
Peter Simiyu Wamalwa
Received 2 November 2020, Accepted 11 August 2021, Available Online 7 September 2021.
DOI
https://doi.org/10.2991/jat.k.210818.001How to use a DOI?
Keywords
Trade; export-led growth; import; import substitution; Kenya
Abstract

The role of exports in promoting economic growth has been widely acknowledged. This paper analyses the link between exports, imports, and growth performance in Kenya using time series data. Despite trade liberalization and export promotion policies pursued over time, Kenya’s export growth has been sluggish, and exports are still strongly geared towards primary agricultural goods. Furthermore, empirical results show that aggregate exports have no statistically significant effect on output growth; instead, output growth is influenced by imports. Moreover, the diversification of imports has a larger impact on output growth than export diversification. Although analysis using disaggregated data shows a positive impact of machinery exports on output growth, the impact is smaller than that of imported manufactured and agricultural commodities. Therefore, the results generally suggest import-led growth and not export-led growth, signifying the economy’s dependence on imports. There is a need for Kenya to revamp the export-led growth strategy by enhancing export competitiveness, increasing value-addition, export diversification, and leveraging on regional and global value chains.

Copyright
© 2021 African Export-Import Bank. Publishing services by Atlantis Press International B.V.
Open Access
This is an open access article distributed under the CC BY-NC 4.0 license (http://creativecommons.org/licenses/by-nc/4.0/).

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Journal
Journal of African Trade
Volume-Issue
8 - 1
Pages
33 - 50
Publication Date
2021/09/07
ISSN (Online)
2214-8523
ISSN (Print)
2214-8515
DOI
https://doi.org/10.2991/jat.k.210818.001How to use a DOI?
Copyright
© 2021 African Export-Import Bank. Publishing services by Atlantis Press International B.V.
Open Access
This is an open access article distributed under the CC BY-NC 4.0 license (http://creativecommons.org/licenses/by-nc/4.0/).

Cite this article

TY  - JOUR
AU  - Peter Simiyu Wamalwa
AU  - Maureen Were
PY  - 2021
DA  - 2021/09/07
TI  - Is it Export- or Import-Led Growth? The Case of Kenya
JO  - Journal of African Trade
SP  - 33
EP  - 50
VL  - 8
IS  - 1
SN  - 2214-8523
UR  - https://doi.org/10.2991/jat.k.210818.001
DO  - https://doi.org/10.2991/jat.k.210818.001
ID  - Wamalwa2021
ER  -