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Kenya's Q1 global trade value hits Sh802bn, deficit widens

There was a 16.6 per cent in the value of imports at Sh593.2 billion, from Sh 508.7 billion the previous year.

In Summary

•Kenya National Bureau of Statistics data shows a 14.4 per cent increase in trade value in the first three months of year, closing at Sh802.0 billion , up from Sh700.8 billion same period in 2019.

•There was a 16.6 per cent in the value of imports at Sh593.2  billion, from Sh 508.7 billion the previous year.

Operations at Lamu Port/KPA
Operations at Lamu Port/KPA
Image: FILE

Kenya's import bill continues to swell even as export earnings grow slowly, widening the trade deficit between it and its partners.

Latest government data shows the country's imports value totalled Sh593.2  billion in the first quarter of 2022, a 16.6 per cent increase from Sh508.7 billion the previous year. 

During the same period, export earnings amounted to only Sh208.8 billion, a growth of 8.7 per cent from Sh192.1 billion recorded the same period last year.

This places the trade deficit at Sh384.4 billion in the first quarter of 2022 compared to Sh316.6 billion in the same period in 2021.

Overall Kenya National Bureau of Statistics data shows a 14.4 per cent increase in trade value in the first three months of year, closing at Sh802.0 billion , up from Sh700.8 billion same period in 2019.

Kenya's three month export earnings are not enough to pay for the country's oil supply which totalled  $3.48 billion (Sh410.4 billion) in 2021.

The slow growth in import earnings at a time when the country's overall debt is galloping towards Sh8.5 million raises concern.

KNBS attributed the increase in trade value to to growth in import values of petroleum products, animal and vegetable oils; and medicinal and pharmaceutical products.

Expenditure on imports of petroleum products increased from Sh65.5 billion in first quarter of 2021 to Sh100.2 billion same period in 2022.

Chinese imports totalled Sh112.3 billion, an increase from Sh107 billion the previous year, as the Covid-19 restrictions eased at the beginning of the year.

"Africa continued to be the leading export destination accounting for 39.8 per cent of the total export earnings," KNBS led by director general, Macdonald Obudho, notes in the report.

According to KNBS the recorded improvement was partly due to significant increase in exports to Tanzania which almost doubled to Sh14.4 billion.

On the other hand, total exports to Uganda declined by 9.2 per cent to Sh20.8 billion in the review period, largely attributable to decline in exports of crude palm oil and cement clinkers.

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

The value of total exports to the European Union slightly improved from Sh33.1 billion in the first quarter of 2021 to Sh34.0 billion in first quarter of 2022. The growth was largely boosted by increase in domestic exports of coffee to Belgium, KNBS data noted.

Over the review period, export earnings from Asia increased by 11.6 per cent from Sh47.5 billion in first quarter of 2021, mainly on account of improvement in the domestic exports of tea and cut flowers to Pakistan and Saudi Arabia.

Export earnings from the United States of America went up by 12.0 per cent in the first quarter of 2022 from Sh14.8 billion in the first quarter of 2021.

The import value of road motor vehicles and; iron and steel went down from Sh23.2 billion and Sh43.9 billion in first quarter of 2021 to Sh18.5 billion and Sh41.2 billion,respectively, in first quarter of 2022.

The quantity of imported wheat and rice declined by 35.4 per cent and 32.3 per cent, to 384.8 thousand tonnes and 132.6 thousand tonnes, respectively in the first quarter of 2022.

In contrast, the volume of imported maize more than tripled from 37.1 thousand tonnes in the first quarter of 2021 to 116.2 thousand tonnes in the first quarter of 2022.

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.