Kenya’s Trade Liberalization of the 1980s and 1990s: Policies, Impacts, and Implications1

As one of the first countries to sign a Structural Adjustment Loan with the World Bank, Kenya spent much of the 1980s and 1990s liberalizing its economy. This reform program included significant changes in trade policy, as the country’s post-colonial import substitution policies were replaced with an outward-looking, export promotion program. Though the country achieved targeted successes in the horticulture and apparel industries, overall Kenya’s trade liberalization failed to produce sustained growth, promote decent employment opportunities, or lessen the incidence of poverty and inequality. As the country shapes its future trade policy, an effort to coordinate trade with other development strategies, to balance between global and regional trade integration, and to focus on job creation can help Kenya maximize the benefits from trade.