TRADE

Uganda top destination as Kenya's exports hit Sh643bn

Africa remain the largest market.

In Summary

•Last year, the value of exports to Uganda totaled Sh72.2 billion, a jump from Sh64.1 billion the previous year.

•China however remained the biggest import source with a bill of Sh361.4 billion.

Long distance trucks line up along the Amagoro-Malaba Highway as they wait to cross the border to Uganda
Long distance trucks line up along the Amagoro-Malaba Highway as they wait to cross the border to Uganda
Image: EMOJONG OSERE

Uganda was the biggest market for Kenyan goods last year, the Economic Survey 2021 shows, as the country's  total value of exports hit a high of Sh643.7 billion.

This is a seven per cent growth from a total of Sh596.6 billion realised in 2019 despite a drop in exports to Europe, the US and China, which retained its position as the leading import source for the country.

The value of exports to the neighbouring country totaled Sh72.2 billion, a jump from Sh64.1 billion the previous year, with Africa being the top destination with exports worth Sh246.1 billion.

Exports to Tanzania totaled Sh31.8 billion, while those to Rwanda were valued at Sh25.2 billion as Kenya exported goods worth Sh158.3 billion to her East African Community partner states, up from Sh140.4 billion.

Africa contributed 38.2 per cent to the total export earnings in 2020, remaining the largest market for the country’s exports. With the East Africa region accounting for 64.3 per cent of the total exports to Africa.

Total value of exports to Asia marginally increased from Sh156.0 billion in 2019 to Sh157.6 billion in 2020.

“This sustained performance was majorly due to improvement in the domestic exports of tea to Pakistan, India and Jordan,” the survey notes.

Despite the overall increase in export earnings from Asia, exports to the United Arab Emirates and Afghanistan declined by 11.0 per cent and 36.2 per cent, respectively, in 2020.

The decline was largely attributable to a decrease in re-exports of kerosene type jet fuel to the United Arab Emirates and domestic exports of tea to Afghanistan.

The value of exports to China also dropped to Sh14.7 billion from Sh15.1 billion in 2019.

Earnings from exports to Europe amounted to Sh171.5 billion, accounting for 26.6 per cent of the total export earnings in the review period, despite a drop on EU exports which totaled Sh99.2 billion compared to Sh133.4 billion.

A growth was nevertheless recorded on exports to Germany whose value increased from Sh11.3 billion to Sh14.5 billion in 2020, majorly driven by increase in domestic exports of coffee and pineapples to this destination, according to the data by the Kenya National Bureau of Statistics.

The value of exports to the United Kingdom also increased by 24.4 per cent from Sh40.1 billion to Sh 49.9 billion in 2020, on account of increased domestic exports of tea, vegetables and cut flower.

The value of exports to the US however fell from Sh51.9 billion in 2019 to Sh49.4 billion in 2020.

“The decline is partly attributed to the decrease in the value of domestic exports of shelled macadamia nuts, and articles of apparel and clothing accessories,” the survey explains.

The growth on exports came even as the Covid-19 pandemic disrupted international trade, with Kenya increasing trading activities with her neighbours.

China however remains Kenya's top import source accounting for Sh361.4 billion of the total Sh1.64 trillion spent on importing goods from the international markets. This is however a drop of about Sh15.3 billion compared to the Sh376.7 billion spent in 2019.

India retained its second position with an import bill of Sh188.5 billion, an increase from Sh178.8 billion.

Asia remained the leading source of imports accounting for 63.4 per cent of the total import expenditure in 2020, despite the total value dropping to Sh1.04 trillion from Sh1.15 trillion.

“The decline is partly attributed to a reduction in the value of imported petroleum products from Saudi Arabia and the United Arab Emirates,” the survey notes.

The government is counting on a number of trade deals entered this year to grow its exports and cut the import bill.

They include the Economic Partnership Agreement with the UK which was sealed before Brexit.

Talks on the Kenya-US Free Trade Agreement are also resumed, albeit on a slow pace, a deal expected to grow trade and investment between the two countries.

Last month, Kenya and Pakistan also ended a long-standing tariff war that hurt trade between the two countries, mainly Kenyan tea exports.

The two countries agreed to remove the ’Attestation Fee’ that was charged on Kenya tea, making it uncompetitive in Pakistan which consumes 40 per cent of the country's tea exports.