The effect of Trade Liberalization on the Textile Industry in Kenya

Authors

  • Dennis Kariuki
    MA Student, Department of Political Science and Public Administration, University of Nairobi

Abstract

Purpose: The study sought to ascertain the effect of trade liberalization on the textile industry in Kenya. The specific focus was on the impact of trade openness, foreign direct investment and tariff measures on the textile industry in Kenya.


Material/methods: The study targeted 23 textile export firms in Kenya. The study relied on the ex-post factor research design.


Findings: The findings from the textile export firms indicated that trade openness and foreign direct investment positively influenced textile industry performance in Kenya. However, tariff measures did not influence the textile industry.


Conclusion: The conclusion was that textile firms are taking advantage of an open trade regime to enhance their access to international markets. Also, through FDI inflows, the textile exports firms have access to new technology that boosts their productivity levels. However, there is no clarity on the tariff measures on textile exports from Kenya to international markets.


Recommendations: The study recommended that the government implement open trade policies and ensure that textile export firms have a supportive business environment.  Also, there is a need to reduce tariffs on production inputs to boost the production levels of the textile industry in Kenya. Finally, the government should have a legal and regulatory framework in the country to facilitate inflows of foreign investment in the textile industry.