The strategic implications of East African regional integration to small and medium enterprises in Kisumu county, Kenya

Abstract

Regional integration is defined broadly as the association of states or nations that lie in a common geographical area on the globe, to safeguard their economic and trade interests as a bloc, usually through reduction of trade barriers. The key rationale behind regional integration arrangements is to create large investment areas and enlargement of markets. This is intended to boost trade and investment and hence economic growth. Kenya has continued to play an increasingly significant role in the inception and growth of regional trading blocs in the region, and a key object of this participation would be the expected benefit to traders, investors and other stakeholders in its economy. Small and Medium size enterprises constitute a major sector in the economies of most nations, and Kenya is no exception. Their progress must be considered in decision and policy because a healthy SME sector guarantees progressive economic growth for any nation. The small and medium size organisations and the policy makers will find it obligatory to follow closely or even predict the developments in this sphere and adopt strategies to reap gains from the arising opportunities while addressing any exposure therefrom. Timely response is critical to avoid adverse effects or missed opportunities. This study sought to identify the strategic implications that are faced by small and medium enterprises resultant from the nation’s participation in regional integration initiatives. The research established that the SMEs studied have actually accrued benefit from the nation’s integration efforts. They have gained through broader opportunities, reduced red tape in business, lower costs and hence profits. The only downside noted for traders was increased competition. Regional Integration is therefore beneficial for business. It should be supported and progressed deeper and wider for greater economic benefit. The researcher recommends further research in other business sectors and regions to confirm wider applicability of the observed result.