An analysis of Kenya's trade experience with regional cooperation and integration under comesa

Abstract

Regional Cooperation and Integration is highly regarded by many countries in the world, both the developed and developing countries. However, much as many leaders in the world enthusiastically embrace the idea of regional cooperation, some studies have shown that there are countries that do not benefit from the arrangements put in place especially at the beginning of these regional blocks. Other studies show that economies that adopt complete trade liberalization develop faster than those that join a regional trade body. In view of these arguments there arises a need to evaluate the position of Kenya in the country's adoption of trade liberalization policies in general and their application to the Common Market for East and Southern Africa (COMESA).

To undertake this study, data are obtained from International Financial Statistics, Statistical Abstracts and other publications. Tests were carried out on the data, and estimation of the relationship between variables was done using Generalized Least Square method. Since some variables were correlated, estimation was repeatedly done leading to the dropping of some variables, and choosing of the best model.

The results show that Kenya's participation in regional trade arrangements, in particular reference to COMESA, results in growth in trade. The government should therefore promote and strengthen trade arrangements with COMESA countries in order to reap more benefits that would result into further growth in trade between Kenya and other members of COMESA. Further, the government should lead the manufacturing and services sectors into investing in research focused on identifying other trade opportunities that have to be taken advantage of