Kenya continues to trail behind Tanzania in trade diversification, relying heavily on raw material exports that limit economic growth and perpetuate poverty, according to a new African Union (AU) report.
The 2025 African Union Continental Integration Report paints a concerning picture for East Africa, noting that the region as a whole remains below the continental average in economic sophistication and industrial expansion. Kenya, in particular, was singled out for its limited progress in manufacturing and value addition, key drivers for job creation and sustainable growth.
Ruto Decries Food Import Dependence
The findings come amid renewed calls from President William Ruto for Kenya to cut its overdependence on food imports, which cost the country more than Ksh500 billion annually.
“We cannot talk about prosperity while spending over 500 billion shillings every year importing maize, wheat, rice, sugar, edible oil, and other foodstuffs,” Ruto said during the Mashujaa Day celebrations in Kitui on October 20, 2025. “This is not just an economic burden it is a threat to our sovereignty.”
To address the issue, the President announced plans to modernize agriculture through irrigation, targeting at least two million acres of land and the construction of 50 mega dams across the country.
Kenya’s Economic Sophistication Still Low
According to the AU report, Kenya’s economy remains heavily dependent on the export of raw materials, reflecting a limited level of industrial diversification. This, the report says, constrains job creation and limits the country’s capacity to tackle unemployment and poverty.
The East African Community (EAC) recorded a diversification score of 0.3920, slightly below the continental average of 0.4072. Within the bloc, Tanzania leads with a score of 0.4457, followed by Burundi and Kenya, while Uganda (0.2848), Rwanda (0.2241), and South Sudan (0.2116) lag behind.
The report further notes that exports are dominated by raw materials (68%), with manufacturing exports (34.2%) trailing well below imports (59.9%) a sign of the region’s weak industrial base.
AU Urges Regional Trade Reform
To bridge this gap, the AU recommends that East African states strengthen intra-regional trade, boost manufacturing capacity, and develop regional value chains in agro-processing and light industry.
“Enhancing trade corridors such as the Mombasa and Dar es Salaam routes is essential for deeper integration,” the report advises. It also calls for greater cooperation in digital trade, mutual recognition of professional qualifications, and industrial coordination focused on skills development and innovation.
The AU further notes that fragile states like Somalia and South Sudan need targeted support, including investment in infrastructure and security partnerships, to help them integrate more effectively into regional trade networks.
