Kenya’s pursuit for a narrower trade gap is bearing fruit after latest government reports showed marked growth in international trade.
Total cross border transactions grew 44 per cent in the third quarter of 2018 compared to same period in 2017, latest quarterly Balance of Payment report by Kenya National Bureau of Statistics show.
The balance of payment narrowed to a deficit of Sh39.2 billion from Sh70.1 billion, in what is attributed to improvements in the financial and current accounts during the period under review.
Net inflows in the financial account more than doubled to a surplus of Sh84.9 billion in the third quarter of 2018 from a surplus of Sh 32.5 billion in the corresponding quarter of 2017 due to increased disbursements.
Receipts in international trade services increased by 10.1 per cent from Sh123.6 billion in Q32017 to Sh136 billion in the quarter under review. Travel net inflows went up by 23.4 per cent attributable to increased visitor arrivals.
Secondary income account which shows the redistribution of income between residents and non- residents posted a surplus of Sh123.5 billion in the 2018 quarter up from Sh120.2 billion last year, with diaspora remittances which rose by Sh13.5 billion to Sh64.7 billion forming the huge chunk.
According to the statistician, the country’s capital account during the quarter grew by 58.1 per cent to Sh3.57 billion from Sh1.49 billion in 2017. This account represents records of all transactions made by a country and the rest of the world, summarising capital expenditure and capital income.
The current account deficit narrowed by 23.1 per cent to Sh 116.0 billion during the third quarter of 2018 from a deficit of Sh 150.9 billion in the corresponding quarter of 2017, driven by increased value of exports in goods and services as well as reduced value of food imports.
Exports in goods grew by four per cent to Sh 152.1 billion on account of increased exports of horticulture, coffee, articles of apparel and titanium ores.
Earnings from tea, which was the leading foreign exchange earner however declined by 10.1 per cent to Sh32.6 billion.
This was as a result of the decline in the unit price of black tea in the international market from Sh318.84 per kilogramme to Sh264.09 per kilogramme in the review period.