KENYA bridged its balance of payment in 2015 reducing pressure on its import bill in the first ten months, latest government data show.
According to the Kenya National Bureau of Statistics, the country’s import bill between January and October decreased by 4.8 per cent, to Sh1.293 trillion, compared to Sh1.358 trillion in a similar period in 2014.
This projects a lower import cost expected to drop by over 9.7 per cent according to the bureau, where industrial supplies (non-food), machinery, capital equipment, transport equipment, fuel and lubricants top the imports basket.
China and India remained Kenya’s top two suppliers with imports valued at Sh273.8 billion and Sh205.3 billion respectively, mainly driven by construction material and machinery for the Mombasa-Nairobi Standard Gauge Railway among other major infrastructure projects.
“During the third quarter of 2015, the overall balance of payments position recorded a deficit of Sh51,356 million compare to a deficit of Sh76,804 million in the third quarter of 2014,” KNBS said, in the November Leading Economic Indicators report released last week.
The current account balance narrowed by 43.5 per cent from a deficit of Sh198.9 million in the third quarter of 2014 to a deficit of Sh112.4 million in the third quarter of 2015.
“This was mainly on account of increase in the value of exports against a decline in the import bill,” it said.
Total exports in the period under review were valued at Sh415.1 billion compared to Sh385.6 billion in 2014, which the statistician attributed to “increases in the value of exports of food and live animals, manufactured goods and crude materials”.
The drop in imports is however not peculiar owing to the turbulence that hit the shilling last year, depreciating by 12.9 per cent against the dollar, (the major international trading currency).
Sectors that expanded include agriculture and forestry, tea, coffee and sugarcane, lifting foreign exchange
Balance of trade – the difference between exports earnings and import spend – is the largest component of a country’s current account in its balance of payments accounts.
Uganda remained the top destination of Kenya’s exports taking up Sh52.2 billion, followed by the UK which took up Sh33.6 billion. US supplies from Kenya were worth Sh33.1 billion making the top three export markets.
Kenya’s economy is projected to expand 5.7 per cent in 2016, according to the World Bank down from a previous projection of 6.6 per cent.