Institute for Development Studies, University of Nairobi

This paper attempts to empirically estimate the quantitative effects on domestic employment and foreign exchange saving when there is a substitution of final goods imports for domestically produced final deliveries. The framework employed for the numerical computations is based on an input-output approach. The main source of the data is the recently published Kenya Input-Output Tables for the year 1967. The impacts of import substitution as well as import substitution possibilities for a particular sector of the Kenyan economy are estimated on the basis of the existing input-output coefficients and the average import proportions of the base year. Since for some industries the effects on induced imports would seriously be affected by domestic capacity constraints, the upper and lower limits for the effects of import substitution are additionally computed for each sector considered as a possible candidate for import substitution. The numerical results specific for each sector of origin are given in details in Section 4 of this paper.