Impact of the East Africa Community (Eac) Customs Union on Kenya’s Exports Volume

Abstract

It has been argued that trading arrangements in Africa induce potentially adverse effects on trade patterns among member states. Such regional integration schemes include the East African Community. This paper sought to assess the impact of the EAC customs union on Kenya’s exports volume for the period 1999 to 2014. Econometric modeling used the augmented gravity model and the fixed effects model was used for estimation purposes. Utilizing panel data for analysis, specific conclusions and recommendations are made The study results suggests that the customs union was a key determinant of trade causing an increase in export trade implying that the continued use of the tariff liberalization scheme is likely to be beneficial for exporters. Appreciation of exchange rates and favarouble growth in Gross Domestic Product were found to positively affect exports while Population had a negative effect.