Is Kenya Facing East or West: An Empirical Analysis

X.N Iraki

doi:10.5539/ibr.v11n12p134

Abstract

In the last two decades China&rsquo;s economic influence in Africa has increased espoused by huge investment in infrastructure like roads, railways, airports and seaports. This has led many scholars to suggest that Africa is facing East away from the traditional West. The Western influence had permeated into governance, education religion and even consumption. Of interest is if China has successfully displaced the west from Africa in such a short time. This study investigates if Africa, in particular Kenya has really faced East (read China). We expect economies near each other geographically or are culturally close because of history e.g. colonialism to have highly correlated GDP growths. This is supported by gravity theory of trade. In this paper, GDP growth rates of Kenya and a selected number of countries from the West and East are correlated for a 50 years period. Analysis is then broken into decades to see the change in patterns. Analysis of correlations during the different Kenyan presidencies then before and after the cold war is carried out. All the data in this paper is sourced from World Development Indicators, a World Bank Data base. The hype about facing East for Kenya is not supported by data. Kenya in the last 20 years has looked East, but did not abandon the West. This dualism may change with Brexit, Trump in White House and envisaged Africa&rsquo;s free trade area.

Highlights

In the 1970s up to 1980s, the following brands were common in Kenya; Bedford, Anglia, Leyland, Rover and ICL
This paper investigates if economically Kenya has shifted to the East
The hype about Kenya facing East economically is not supported by data

Summary

Introduction

In the 1970s up to 1980s, the following brands were common in Kenya; Bedford, Anglia, Leyland, Rover and ICL. Made in England was common from home appliances to cars on the road It was not just in products; schooling in England was prestigious with two of Kenya’s four presidents schooling there, Jomo Kenyatta and Mwai Kibaki. In the early 1990s perhaps because of economic liberalization and end of cold war, brands from East started appearing in Kenya. They include Faw, KIA, Daewoo, Samsung, Toyota (which had come much earlier, with the first car sold in Kenya 1965), Tata, Haier, Huawei and Tecno. The analysis builds on the work of Baxter & Kouparitsas (2005) They suggest that trade depends on distance, the greater the distance between two countries, the higher are the costs associated with transporting goods, thereby reducing the gains from trade and reducing trade itself. The paper borrows from the gravity model, originally from Jan Tinbergen in 1962 shown here

Results

Graphical Analysis Decade by Decade

Cold War and Kenya’s Economic Direction

Conclusion