Final answer:
Kenya benefits from trade with other African countries by leveraging its membership in the EAC to foster regional partnerships, generating revenue through the import and sale of goods, enforcing taxes on goods transiting its borders, benefiting from comparative advantage, and improving its economic competiveness. The IMF and World Bank also support Kenya's economic reforms to enhance trade.
Step-by-step explanation:
Kenya profits from trade with other African countries in several ways. By being part of the East African Community (EAC), alongside Uganda and Tanzania, Kenya has fostered mutual development and economic partnerships that enhance trade within the region. Historical patterns show that trade provides direct income through the import and sale of goods. Furthermore, Mombasa, a historical international shipping port, has been central to regional trade, dealing in various commodities including spices and ivory. With the imposition of taxes on goods in transit, trade also generates significant governmental revenues.
For low-income countries like Kenya, international and regional trade are crucial. They benefit from comparative advantage, which allows them to focus on the production of goods they can produce more efficiently than other countries. Additionally, participating in a larger market helps to slice up the value chain and gain from economies of scale. Smaller economies have the potential to grow and become more competitive through trade since there is an increase in pressure to provide goods at prices consumers want due to an increase in competition.
Kenya's role in trade is also supported by international organizations such as the International Monetary Fund (IMF) and World Bank, which aid in its economic reform initiatives. This includes minimizing waste and corruption, further strengthening its trade potential.