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Economic Complexity and Industrial Policy in Kenya

Author

Listed:
  • Malot, Kenneth
  • Mutuku, Cyrus
  • Otindo, Clement
  • Rand, John
  • Shibia, Adan
  • Srensen, Bjrn Bo

Abstract

Kenya Vision 2030 aims to transform Kenya into a globally competitive economy, but its current export performance constitutes a significant impediment to realizing this objective. By systematically accounting for supply- and demand-side factors, this study identifies new products that can help to diversify and upgrade Kenyas economy. In a supply-side analysis, we first use economic complexity methods to identify 70 complex target products - primarily in the Machinery & Electronics and Metals sectors - that Kenya can learn to export competitively given the current structure of its economy. In a demand-side analysis, we then use gravity models to predict a high export potential among target products in sectors like Vehicles & Transport Equipment, Machinery & Electronics, Chemicals, and Metals. We predict that many of Kenya's current trade partners could be key importers of the target products, but we also find a high demand in several underexploited markets such as Australia, Canada, Italy, Japan, Nigeria, South Africa, Spain, and Zambia.

Suggested Citation

  • Malot, Kenneth & Mutuku, Cyrus & Otindo, Clement & Rand, John & Shibia, Adan & Srensen, Bjrn Bo, 2025. "Economic Complexity and Industrial Policy in Kenya," Working Papers 9e7089d6-4bcc-42cc-b270-2, African Economic Research Consortium.
    • Handle: RePEc:aer:wpaper:9e7089d6-4bcc-42cc-b270-2976c70165ef
    Note: African Economic Research Consortium
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