Economic Complexity and Industrial Policy in Kenya

Kenneth Malot, Cyrus Mutuku, Clement Otindo, John Rand, Adan Shibia and Bjrn Bo Srensen

Working Papers from African Economic Research Consortium

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.

Date: 2025
New Economics Papers: this item is included in nep-inv
Note: African Economic Research Consortium
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