International Trade

Exports: tea, horticultural products, coffee, petroleum products, fish, cement

Imports: machinery and transportation equipment, petroleum products, motor vehicles, iron and steel, resins and plastics
Data derived from CIA World Factbook

Kenya has lots of trade activity. Though Kenya has many natural resources it is able to export, Kenya still imports countless more items. A large part of the reason why Kenya has accumulated so much debt is because Kenya imports so many goods and exports so few (CIA, 2009). In fact Kenya exported 5.04 billion dollars worth of goods and imported 10.69 billion dollars of goods in 2008 (CIA, 2009).
The Kenyan trade policy is quite liberal and has been since the 1990s (International Monetary Fund, 1998). Kenya has had an open trade policy since the early 1990s (International Monetary Fund, 1998). Kenya has only a 25 percent tariff (International Monetary Fund, 1998). Kenya is so open with trade that they have become dependent upon resources from trade with other countries.
Kenya has comparative advantage in very few goods because Kenya does not produce a variety of goods. Since Kenya does not have comparative advantage in many goods they do not export many goods other than agricultural products, which they have comparative advantage in (CIA, 2009). In fact coffee and tea are a couple of the few items Kenya has comparative advantage in (CIA, 2009). Since Kenya can obtain mechanical resources elsewhere they have never had the desire to invest in factories, because investing in factories costs time and money. Therefore since Kenya has a large imbalance of imported and exported goods since it does not export a range of goods.
Contrary to what usually is the case for free international trade, trade could be hindering Kenya. Since Kenya knows it can import goods for a lower price than making them Kenya has become dependant upon other countries for necessary resources such as machinery and metals. If Kenya were not able to trade with other countries then they could be forced to invest more in capital to produce the goods for themselves. If Kenya did this then they would be far less dependant upon other countries and they might not even be in as much debt to other countries as they are now. Overall Kenya’s net exports are a large issue for the Kenyan economy. Perhaps Kenya should invest in capital to produce imported goods for themselves.

References:

International Monetary Fund. "Kenya - International trade." Encyclopedia of the Nations. N.p., 1998. Web. 24 Nov. 2009. .

CIA. "Kenya Economy." CIA Worls Factbook. CIA, Nov. 2009. Web. 18 Nov. 2009. .