Exploring Kenya's agricultural exports potential: A stochastic frontier approach

The current study examined the drivers of Kenya's agricultural export efficiency and estimated the untapped agricultural export potential between Kenya and its top 25 trading partners for the period 2000-2023 (N = 600). Using the stochastic frontier gravity model (SFGM) with time-varying specification, the results showed that Kenya's GDP and that of its trading partner, the population size of its trading partner, common colonial history, the East African Community (EAC), the European Union (EU) and the Common Markets for East and Southern Africa (COMESA) membership promote the country's agricultural export. The Kenyan population size, geographical distance between Kenya and its trading partners, and exchange rate were found to hinder export growth. The study estimated a reservoir of untapped export potential of approximately 109.146 million US dollars, equivalent to about 4.04% of the country's annual agricultural trade. The findings underscore the need for targeted macroeconomic and trade policies, including investment in logistics infrastructure, value chain development, and strengthening of bilateral trade diplomacy, to convert estimated potential into actual export gains.