Factors Influencing Trade In Kenya

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Trading in Kenya is affected by several factors which affect the nature of trade and success of the trade activities.

Transport and communication

Goods need to be transported to places where they are needed. Therefore a good transport network is needed. In many parts of rural Kenya there are poor transport links .this slows down trading activities. Improved communication has made trading easier. A faster and safer method of transferring money through mpesa has also contributed to easening of trade activities since it is convenient and easier.

Availability of products for sale

Goods or services for exchange or sale are required for effective trade to take place. In Kenya, few counties produce what others need most but instead produce similar goods hence trade activities within the counties is minimal.

Availability of market

Most Kenyans do not buy goods that they already have in plenty. They buy what they do not produce in their farms. People may also not have enough money to buy those products hence they avoid the products thus limiting trade.

Taxation of goods

High taxes make imports more expensive to acquire. This creates a trade barrier between Kenya and the counties that are willing to do trade with the country.  Some countries do not buy goods from Kenya because of high taxes paid.

Means of payment or exchange

Different currencies have different exchange rates in Kenya hence it becomes tedious to convert currencies, if the currency used for trade would have been a common one, then the problems could be minimal.

Kenyan government policies

The government can help promote trade by signing trade agreements with other countries as seen with the present jubilee government.  Representative or commercial attaché’s helps to explain what goods are available in the country.

Political stability

Political stability attracts business people from other countries. Poor political Stability in the political scene has been experienced in Kenya after the 2007 election violence that led to deterioration of trade activities. Currently pressure between the jubilee government and the opposition is creating a lot of renewed tension that is affecting trade.

 

 

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