- Data by Kenya National Bureau of Statistics (KNBS) shows the country is still sending more money abroad compared to what it receives.
- The yearly economic survey report by KNBS shows despite a 17.4% growth in export earnings in 2022 to Sh873.1 billion, trade deficit still widened to Sh1.62 trillion.
Kenya will still depend on imported commodities in the next 12 years, Stancharts’s latest future of Africa Trade report now says.
This is despite the country’s annual exports being projected to grow to $20 billion (Sh2.9 trillion) by 2035, with the African Continental Free Trade Area (AfCFTA) boosting the exports by an additional 35 per cent.
“The country will maintain its net importer status,” the report says in part.
This means even if the country records increase in export earnings, it would not do enough to offset the existing trade gap, further making the country vulnerable to volatile price shifts on commodities it heavily depends on, exposing consumers to higher prices.
Kenya National Bureau of Statistics (KNBS) data shows the country is still sending more money abroad compared to what it receives.
However, for the three months period to June this year, the current account deficit has narrowed to Sh138.7 billion.
This is from Sh206.2 billion recorded in the same period last year.
The trade deficit, which is the largest component of the current account, also recorded an improvement from a deficit of Sh365.8 billion in the second quarter of 2022 to a deficit of Sh343.2 billion in 2023.
This was attributable to a 9.6 per cent increase in exports of goods, coupled with a slight reduction in expenditure on imported commodities during the quarter under review.
“Tea and horticultural commodities were the key drivers in the growth of exports. The surplus from exports of services rose by 25.6 per cent to Sh35.4 billion,” KNBS says.
“Increased exports of services across the major categories namely; travel, transport, financial, telecommunication and government goods and services resulted to the favourable performance in international trade in services.”
Nevertheless, the quarterly report also highlighted increase in diaspora inflows, which rose to Sh140.5 billion in the period under, review, from Sh120.3 billion the same period last year.
This helped boost the surplus in the secondary income account by 28.2 per cent to Sh234.5 billion.
The yearly economic survey report by KNBS also shows despite a 17.4 per cent growth in export earnings for the year ending 2022 to Sh873.1 billion, trade deficit still widened to Sh1.62 trillion.
This was up from Sh1.41 trillion in 2021, when the value of imports was at Sh2.15 trillion, which was a 30.9 per cent increase from Sh1.64 trillion in 2020.
The Economic Survey report read that the growth was not sufficient to offset the growth in imports, resulting to the widening of the balance of trade.
Agricultural products are central to Kenya's export industry with horticultural and tea being the most important.
Tea recorded the highest earnings of Sh163.3 billion due to improved international tea prices and was the leading export commodity in 2022.
Other top earners were horticulture at Sh152.3 billion, apparel and clothing Sh47.3 billion, coffee Sh37.1 billion and Sh29.4 billion from titanium ores.
Stanchart’s report however, gave a positive outlook on future prospects of the country’s trade and industrial development.
It highlighted for instance, government’s plan to establish special economic zones that aims to boost manufacturing, translating to increased exportation.