Kenya's global trade value falls to Sh2.2tr on Covid-19 effects

The value of trade between Kenya and its key business partners dropped in 2020, latest government data shows, despite growth in the country's exports.

Kenya National Bureau of Statistics 2020 data shows a 4.7 per cent drop in trade value in the year to December, closing at Sh2.283 trillion, down from Sh2.396 trillion in 2019.

Equally,  there was an 8.8 per cent drop in the value of imports at Sh1.64 trillion, down from Sh1.80 trillion the previous year, with leading import source market of China slightly losing its market share despite remaining Kenya's dominant source market.

Chinese imports into the country totalled Sh361.5 billion, a slight drop from Sh376.7 billion the previous year, as the Covid-19 pandemic disrupted the global supply chain.

India which is the second import source for Kenya saw the value of imports grow by 5.4 per cent to Sh188.6 billion.

This is up from Sh178.9 billion the previous year, most probably driven by  increase in pharmaceutical imports during the pandemic, where India remains a key source.

UAE, Japan and Saudi Arabia which make the top five import source for Kenya however lost their markets by 44.7 per cent, 11.7 per cent and 43.7 per cent, respectively.

Imports  from UAE totalled Sh92.7 billion, down from Sh167.9 billion previous year, Japan Sh87.7 billion from Sh99.4 billion while those form Saudi closed the year at Sh71.7billion, down from Sh127.2 billion in a corresponding period in 2019.

US, Germany, Netherlands, France and UK remained major import sources for Kenya but the volumes remained low.

Overall trade volumes dropped between April and June, a time when Covid-19 impact was being felt across the globe with many countries on lock-down.

It however started to pick in July into the end of the year.

“The value of imports increased from Sh139.04 billion in November 2020 to Sh 161.46 billion in December 2020,” KNBS notes in its Leading Economic Indicators data.

Kenya however made gains during the year as it increased its export volumes which grew 25.5 per cent in value to Sh641.2 billion.

This is up from Sh510.9 billion the previous year, with Industrialisation, Trade and Enterprise Development CS Betty Maina noting the country has managed to cut on the huge balance of trade deficit.

Major destinations for domestic exports included Uganda(a leading trading partner), UK (vegetables), Pakistan (mostly tea), Netherlands( flowers and vegetables), and Tanzania which is a common trading partner on industrial goods and food commodity.

“The value of total exports increased from Sh50.79 billion in November 2020 to Sh57.51 billion in December 2020,” KNBS led by director general, Macdonald Obudho, notes in the report.

Uganda and Tanzania were key in the growth of the export volumes, a time when the pandemic had reduced global industrial output while affecting international trade patterns, including shipments.

Exports to Uganda includes food and beverages, industrial supplies (non-food), fuel and lubricants, machinery and transport equipment.

The government is keen to capitalise on the African Continental Free Trade Area to grow the country's exports, as it pushes to reduce dependency on imports.

It is also counting on the Economic Partnership Agreement with the UK, the existing EU  agreement (EPA) and the ongoing talks with the US, to help secure more market for Kenyan exports, in a bid to cut on the huge balance of trade deficit.

“These agreements open up markets and give a predictable environment to do business,” Industrialisation, Trade and Enterprise Development CS Betty Maina told local manufacturers during the recent launch of the Manufacturing Priority Agenda (MPA) 2021, by the Kenya Association of Manufacturers.