Product and Market Diversification Trends: The Case of Horticulture Exports in Kenya

抄録

One of the major successes of trade liberalization in Kenya was promotion of horticultural exports. This was aimed at reducing export earnings instability that resulted from declining commodity prices of tea and coffee. The export promotion programs put in place in the 90s paid off and horticultural exports was able to record its strongest period of growth in the 2000s. In this period the major horticulture export product was French beans in which the EU was the primarily market. However, the global markets have been changing posing new challenges of increased competition and regulatory standards which could threaten the survival and sustained participation of Kenyan horticultural exports. At the same time creating opportunities to increase export products and expand market access through transfer of knowledge, skills, and technology. For many developing countries diversification into new products and markets has been encouraged by development platforms to deal with trade related shocks that emanates from reliance of one market and a narrow range of products. Therefore, the objective of this study was to analyze the trends of product and market diversification of horticulture exports in the periods 2002 to 2019 in Kenya using UNComtrade data. We employed the Hirschman-Herfindahl index to measure product and market diversification. The study finds that the horticultural products are less diversified while the index for the market diversification showed are more diversified markets access. This shows that horticultural products have not increased instead concentrated into the same products while widening market access to other regions despite the EU markets controlling the largest share of exports. The results highlight the need to increase the export products and take advantage of untapped potential markets.