Kenya’s trade deficit hits Sh1.41tn as China remains king

Last year's total volume of trade amounted to Sh2.9 trillion, economic survey shows.

In Summary

•The Economic Survey 2022 unveiled yesterday shows the value of imports increased from Sh1.643 trillion in 2020 to Sh2.151 trillion last year.

•This offset gains made in exports earnings which grew 15.5 per cent to Sh743.7 billion, up from Sh643.7 billion the previous year.

A vessel discharges containers at the Port of Mombasa/FILE
A vessel discharges containers at the Port of Mombasa/FILE

Kenya’s trade deficit widened to Sh1.407 trillion in 2021 as the value of imports greatly outweighed export earnings, official data shows.

The Economic Survey 2022 unveiled yesterday puts the value of imports at Sh2.151 trillion in 2021 up from Sh1.643 trillion in 2020, a 30.9 per cent growth.

This was mainly driven by a rise in petroleum product imports which accounted for Sh335.3 billion and industrial machinery (Sh255.8 billion), with the total deficit growing from Sh999.9 billion in 2020.

This offset gains made in exports earnings which grew 15.5 per cent to Sh743.7 billion, up from Sh643.7 billion the previous year.

Growth was largely attributable to an increase in exports of horticulture (Sh165.7 billion), tea(Sh130.9 billion) and coffee(roasted) Sh26.1 billion.

Other key exports were titanium ores and concentrates and articles of apparel and clothing accessories.

During the year, the total volume of trade amounted to Sh2.894 trillion, rising from Sh2.287 trillion, the survey by the Kenya National Bureau of Statistics (KNBS) launched yesterday indicates.

“The gradual easing of protocols imposed in 2020 to contain the Covid-19 pandemic resulted into the opening of economies and increased demand for goods and services, culminating into improved global trade in 2021,” KNBS director general Mcdonald Obudho said during the launch, in Nairobi.

During the year, the country’s current account deficit worsened to Sh663.8 billion from a deficit of Sh510.1 billion in 2020.

“This was largely on account of faster growth of merchandise imports relative to total exports,” KNBS says in its report.

China and India remained the country’s biggest import sources as the Asian market accounted for 65.7 per cent of the country’s total import bill.

The value of imports from China increased to Sh441.4 billion up from Sh361.4 billion while those from India were valued at Sh230.9 billion up from Sh188.6 billion the previous year.

Total imports from the EU and America (US, Canada, Brazil, Mexico, Argentina) were valued at Sh227.9 billion and Sh123.7 billion, respectively.

Meanwhile the country’s manufacturing sector recorded a stellar performance as it helped increase the value of exports, mainly to the neighbouring country.

Together with horticulture and the agriculture sector, manufacturing helped increase domestic exports by 17.5 per cent to Sh666.7 billion in 2021, from Sh567.4 billion in 2020.

“Food and beverages category accounted for the largest proportion of all domestic exports at 43.1 per cent followed by consumer goods at 27.6 per cent,” says the survey.

Manufacturing recovered in 2021 with the sector’s real value added growing 6.9 per cent compared to a negative 0.4 per cent in 2020.

The share of manufacturing sector to GDP was 7.2 per cent in 2021, the survey indicates.

Sub-sectors that registered major growths in volume of out put were leather and related products, dairy, motor vehicle, sugar, meat and meat products, and cement.

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