ABSTRACT
This study explores the principal factors underlying the growth and performance of Kenya's manufactured exports. Although Kenya's manufacturing sector has expanded and diversified its production, only a few firms can boast of an impressive export record in the last 25 years. Inability to develop a highly competitive export market continues to pose a formidable challenge to the country's industrial sector, although, since the mid-1970s the government has introduced a number of export incentives including lower taxation and export compensation. Most firms were originally set up to operate in highly protected domestic and East African regional markets, under an import substitution industrialization (ISI) regime. This made them inward-looking and less interested in export markets.
