Trade Between Zambia and Kenya: an Investigation Into Factors That Make the Kenyan Edible Oil Industry Competitive

Abstract

The launching of the COMESA Free Trade Area on 31st October in 2000, at the COMESA Summit of Heads of State and Government marked a step further towards the long journey to establish a COMESA common market. Ideally, the Free Trade area was launched to promote regional integration through trade and investment. Nine Member states became pioneers. These are Djibouti, Egypt, Kenya, Madagascar, Malawi Mauritius, Sudan, Zambia and Zimbabwe. Some countries that were not ready to participate in the free trade area arrangement pledged to become members later. Following this development exports of certain products are now being exported. For instance, Zambia started exporting sugar to Kenya. On the other hand, Kenyan firms started exporting edible oil products to Zambia. In both countries, there have been concerns about the survival of the local industries, the edible sector in Zambia for instance and the sugar industry in case of Kenya. In both countries there have been calls from industry players to ban imports. Both Governments have undertaken verification missions in these two sectors to find a solution to problems facing their local industries. It was out of this background, that a study into factors that make the Kenyan edible oil firms competitive conceived. This study used the" diamond theory" model to find out these factors.