Kenya Economic Transformation: Interdependency in the African Power House

Abstract

Economic transformation in Kenya has brought the government’s policy into new
system based on the need to African development and East African growth. The challenges
considered after the financial crisis in 2008 and the movement of political conditions to bargain
statement about African independency. The analysis comes from the potential to consequences
of the policy, by focusing on the perspectives of a state and its progress without separating the
actors as factors. The definition of international politics used in the study of economic policy
include to the main concept of power and the form of alignment in the case. In the
environmental changes of Africa, Kenya leads the policy which breakthrough the existing
system for the meaning of movement and integration. This method shown in the relation of the
political and economy point of view to direct the elements on the surface case study, which
contains the background policy, comparison of the regional and intership actors, determinant
factors, critics and impact, and the politics solution over the strategy in the implementation
process. Terms and condition are limited into the category and variable included in each
explanation through the rate of inflation and prices, the information cost, effective remedial
measures, economic demand, standart of evolution to figure out the role model concept. This
correspondent value underlined the output and evaluation for the policy as solution, which state
the interdependency and benefit by Kenya as its struggle to survive and dominate in this fast-
growing economy and political transformation.
The internal condition in Kenya as one of the developing African country issued by corruption
problems and low labor system, but instead face the financial conditions which is optimistic
compared to other factors. Kenyan open market policy directed to private sector domination
effect into the stability in politics and less government elementary changes. Argued to the
background opposite, other regional states has the unstable political based on historical aspect.

In the transnational system, Kenya included to the East African Community (EAC), Southern
Africa Development Community (SADC), Common Market for Eastern and Southern Africa
(COMESA). EAC states which consist of Burundi, Kenya, Rwanda, South Sudan, Tanzania,
and Uganda are concluded into African Economic Community framework. Kenya became the
best demonstration of integration in the African regional based on Africa Regional Integration
Index (ARII), which is determined by the productive regional infrastructure, people’s open
migration, and financial macroeconomics integration.1 Kenya introduced the SADC and
COMESA in 2008 to construct the Common Market in ways of area division, economic system,
politics and people as it was the realization of Preferential Trade Area in 1994, after the
increasing of regional GDP (Gross Domestic Product).2 By enhancing the trade integration,
improt rate will be subject to internship regional trade.

Kenya economic transformation was initiated by the economy politics policy towards the
internal and external challenges through the utilization of regional African association. In
political sector, Kenya is heading for the Free Trade Zone against economic barrier and
establish the free visa policy for the Eastern Africa regional states since 2016 to set the vision
of people in Eastern African Community.3 By this movement, the trade integration concept can
be settled in broader principle in the area of EAC regional financial market. The detention was
about the high information cost in Africa, therefore Kenya brought the trade as a central hub
function to manage the region. Kenyan contribution was among 40 percent of the regional
GDP, thereby it has become the the national investment authority4, the multiple meaning of
highest Intergovernmental Authority on Development (Igad) after considering the national
policy surveillance as the standart purpose. The main value gained by Kenya is active economic
role with no barrier to operate the financial interest of the state on the hand of external economic
actor which is suited to accountants. Kenyan policy made the entity of Power House embody
the sustainable development, good investation and free competition.

1
(Africa Regional Integration Index, 2018)
2
(TradeMark East Africa, 2016)
3
(GITHAIGA, 2017)
4
(KenInvest , 2017)
 1. The background and strategy precision

The problem background of governmental politics and economic in Africa situated Kenya to
adapt the most accurate policy. Kenya has the domestic problem related to the economic
government, inspite the epidemic instability in other regional states even got none in term of
factors about straight economy yet power to behold the important meaning of politics. To
undertake the internal direction, Kenya specified its policy into the unity of economy politics
program which is not only exercised by the governmental aspect but also non-governmental.
There are limited actors but useful on focusing the precision from role measurement which is
counted on the adaptation stage until acceptance, thereby growing numbers are consistent to
the probability of achievement disposed by state. If the output will value the growth, then the
policy itself should intersect into implementation impact to process directly. Analysis data
about Kenya economic growth rate withstand and increased by 5.6 percent in 2015 to 5.95
percent in 2016 provide the neutral position for the policy to apply, in case of the domestic risk
such as monetary policy and investment compliance will be faced straight through corruption
problem and weak government in the poverty environment. The conclusion about Kenyan
decision in trade integration planning was based on consideration of national export growth
aspect. Internal trade growth is affected by the investment value, but can be observed by the
government tendency to manage the integration issue into regional states. East African
Community Trade Integration is the manifest formed by the national concern to domestic
affairs related to the external actor impact, so that the vision build on so many comparison.

2. Determinant factor about consequences

Interdependency theory found by John Thibaut and Harold Kelley (1978, 1959) has the same
charateristic to the George Homans’ Social Exchange Theory6, about the interaction concept
between costs and benefits to their comparison level. The determinant factor affect Kenyan
decision is the zero role model of economic success in East African regional states. Unoccupied
and restricted state capability are not making Kenya as the figure of their economy, but it has
the place for chance to make use of policy field to determine other actors, but still regarded as
growth that spread evenly and the appearance of transformation output. Kenya took the
consequences into the economic condition and domestic investation that will be primarily
evaluated by regional states, and at the same time become the demand from economic actor to
decide the state economic policy direction liberally, before accountant promoted external
action out of government. The accountancy growth has the important capability to analyze
input and output section with the control tool and economic management. The accumulation
factor tend to prioritize the output growth than productivity, state that the policy to increase
investment is more valuable but shoould be followed by expand labor and work field.7

The regional issue factor was considered as the switch over determinant in regional problems
facing the stagnant government condition in each states. This is lead to characteristic of Kenya

5
(World Bank Group economic report 2016)
6
(Syahri, 2014)
7
(Aquilars M. Kalio, 2012)
decision to be consolidated to this aspect among every field that is most affected to regional
stability. Meanwhile, the stable condition will maintain the government policy and changes.
The grass root problems in Kenya become the source of decision making for the policy
transformation. Policy analysis state that the domestic policy has the characteristic of structural
evolution or long term transformation so that this aspect will bring the other economic politics
problem to the surface. This policy evolution also made the Kenya priorities not becoming
authoritarian and avoid any outlook to state its interest in formulating the regional policy
direction. The increasing economic demand from regional regarded as the form of support to
he regional stability.

3. Investment comparison to regional—“effective remedial measure mitigate”

Nairobi Securities Exchange (NSE) is the top stock exchange in Africa. The accountant
profession in Africa showed up in public or private instance and has the strong bond to
international agency. Therefore Kenya capability will obtain the significant transformation for
the other regional state policy. The entering inflation growth can restrain the detention of policy
and becoming the potential to extent, therefore government tend to focusing the national
economic policy to the open economy market to expose the competition for the external actors
which are regional and non-Africa to preserve Kenyan position and regional area at once. The
comparison between foreign investment and internal economy brings the impact to regional,
thereby it stand to verify the Kenya mitigation ability by the effective multiple measurement.8
By this mean, control should be lifted on the market allocation model with restructurization.
The prevalent increasing of Foreign Direct Investment (FDI) in the period of 2013—2017
indicate the economic integration in African cities compared to others. Some of the strategic
cities have the international stock exchange such as Johannesburg, Nairobi, Lagos and Cairo.9

The movement after the financial crisis in 2008 made export inequality and domestic poverty.
The need of large FDI is the government potential to intervent the financial policy and reform
the system, therefore analysis data state that the FDI growth to African states improve the rate
to be the second in the world. Critics and consequences in the changes appeared is the
probability of increasing goods prices in case of the centralistic investment in Kenya, but it can
be tackled by the increasing demand from massive regional economy. Africa also become the
area with the highest capital surplus from investment value in the world since 2002 until 2007.10
Thus evidence marked up the potential of preventing the area from any financial breakdown
that is required by foreign investor, but even indicate the increasing demand as priorities.

8
(Collier, 2010)
9
(Collier, 2010)
10
(Africa Regional Integration Index, 2018)
 4. Critics and implementation process

Information cost is the time or money required to get the information, related to the decision
making or research. Thereby growth need the information of experiment and research.11 Kenya
implement the basic to spread the economic growth for regional partners12 through the liberal
system market to strive the economic efficiency and competences to face the foreign
investment.13 Competition system made the achievement as the value of regional economic
process, with Kenyan financial aspect as a patron. The benchmark of Kenya trade integration
impact to regional is rated as fast-growing process and perform the institutional transformation.
The Eastern Africa area has two main ways through the conformation, which are achieve the
politics security stability and enlarge economics project or investation build on the national or
regional infrastructure that have been designed but implemented in the short term.

5. Politics solution and strategy

The African power axis appeared from the growth in economic sector and politics such as
Niger, Ethiopia, Uganda, Ghana, Algeria, Morocco, South Africa, Tunisia, and Egypt.14
Nairobi has the role in the central business and aid funding agencies. The strategic action for
Kenya policy is maintain the comodity prices and information cost factors. The global crisis
can not reach African interest but affect the comodity prices. It can lead to bad investment
prospect, therefore Kenya still need to improve the productivity and competitiveness15.

Conclusion and Evaluation

Kenyan integration policy and transformation with the research result state the interdependency
relation in the African regional as the new and holistic form, beside the impact from other
actors. The policy and transformation rely on the changes rapidity and regional stability, to
build the coherency of inter politics governmental among national interest in the region.
Through the policy precision, Kenya gain the benefit with the strategy of struggle to survive
and dominate. Survival can be trived from the external investment factor generated in the
financial management, and domination comes from the maintained information by government
by their policies. Kenyan position was the catalyst for the precision growth in the aspect of
ecopol in Africa, thereby could construct the value based on the probabilities of new actors or
potential of new analysis level, withdraw from any international organization. In conclusion,
Kenya was included to four states with the largest economics in sub-Sahara Africa after Niger,
South Africa, and Angola—called the “African Lion”16

11
(Spacey, 2017)
12
(Xinhua, 2017)
13
(Mwangi S. Kimenyi, 2014)
14
(Guarantee Trust Bank plc, 2015)
15
(The World Bank, 2015)
16
(Golubski, 2016)
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