Impact of Accession of Rwanda and Burundi Into the East African Community on Kenya’s Export to the Region (2000– 2012)

Abstract

The study analyzes the impacts of accession of Rwanda and Burundi into the EAC in 2007 on Kenya’s exports to the EAC Region. The study reviews literature from related studies and publi-cations to examine findings and relationships of trade generation with increase in membership of countries in a trading bloc. The study looks into Kenya’s exports to the EAC between years 2000 and 2012. In assessing the impact of accession of Rwanda and Burundi in to the EAC, the study uses the gravity model to investigate the trading relationship between different countries. The study employed a dummy that captured the effect of accession of Rwanda and Burundi on 2007. The study further found that the accession of Rwanda and Burundi has had a minimal impact on Kenya’s exports to the region Kenya’s export to the region. The study further found that Ken-ya’s exports to the region were significantly explained by variables: GDP for Kenya; GDP for the other EAC countries; per capita for Kenya; per capita for other EAC countries. On the other hand, distance between economic centres within EAC; sharing of borders, language and regional trade agreement were found as insignificant manly because these were constant throughout. The results also found that there has been a gradual increase in Kenya’s export to the region after accession of Rwanda and Burundi indicating that although it is generally expected that increase in countries in a trading bloc increased export growth for the member countries, the increase is marginal in the short term. The study concludes that the accession of Rwanda and Burundi has had a minimal impact on Kenya’s exports to the region. This can be explained by the fact that even before the accession of Rwanda and Burundi, these two countries were trading partners with Kenya and the EAC since they are landlocked and with minimal industrial output. Kenya’s export trend to the EAC has been on a gradual increase between the period 2000 and 2012. The study recommends strengthening of domestic economies for Kenya and the rest of the EAC countries. With increased domestic economic performance and strengthening of bilateral ties in the region, the increased output will lead to increased Kenyan exports to the EAC.