China dominates as Kenya’s top import source globally
Uganda is Kenya’s biggest trading partner within the East Africa Community (EAC), latest data show, with China dominating the global scene.
The Economic survey (2019) shows total trade volumes (import and exports) between Kenya and Uganda in the year 2018, were valued at Ksh111.3 billion (USD1.09 billion).
Tanzania comes in a distant second with a total trade value of Ksh47.6 billion (USD468.9 million) while Rwanda is third with Ksh19 billion (USD187.2 million).
Trade with DR Congo, South Sudan and Burundi, mainly export markets for Kenya, were valued at Ksh15.2 billion (USD149.6 million), Ksh12.9 billion (USD127.1 million) and Ksh6.6 billion (USD65.02 million) respectively.
During the year under review, Uganda increased the value of its exports to Kenya by 17.6 per cent to close at Ksh49.4 billion (USD486.7 million), from Ksh42 billion (USD413.8 million) in 2017.
“The value of imports from Uganda rose largely driven by increased imports of maize, sugar, milk and animal feeds,” the Kenya National Bureau of Statistics (KNBS) has noted.
Kenya however exported more to her neighbour where total volumes were valued at Ksh61.9 billion (USD 609.9 million),a slight increase from Ksh61.8 billion (USD608.9 million).
Uganda exports to Kenya include wood and articles of wood, wood charcoal, fodder, mineral, cereals, dairy products, honey, edible products, sugars and sugar confectionery, coffee, tea, mate and spices, tobacco and manufactures tobacco substitutes among other products.
In return, Kenya exports salt, sulphur, earth, stone, plaster, lime and cement, mineral fuels, oils, distillation products, plastics, pharmaceutical products, vehicles, beverages, spirits and vinegar, soaps, lubricants, waxes, candles, modeling pastes among others.
The value of imports into Kenya from Tanzania increased by 3.5 per cent to Ksh17.8 billion (USD175.4 million) up from Ksh17.2 billion (USD169.5 million), mainly on live animals, cereals, beverages, spirits and vinegar, fertilizers, mineral fuels, oils, distillation products and textile articles.
Kenya exports to Tanzania on the other hands gained marginally to close at Ksh29.8 billion (USD293.6 million) from Ksh28.5 billion (USD280.8 million), despite the existing tariffs and Non-Tariff Barriers (NTBs) between the two states.
Last year, the two EAC member states were entangled in a trade war after Dar es Salaam denied unrestricted entry of Kenyan made chocolate, ice cream, biscuits and sweets entry into its market.
Nairobi retariated by imposing new tariffs on Tanzania products such as flour with both breaching the EAC common market protocol, which allows free movement of locally manufactured goods.
Presidents Uhuru Kenyatta and John Magufuli have on several occasions directed their ministers to resolve outstanding trade disputes, to pave way for increased trade between the two countries and the region as a whole.
Rwanda and the rest of EAC
The President Paul Kagame led country lost ground on its exports to Kenya where the value dropped by 29.4 per cent to close at Ksh1.2 billion (USD 11.8 million) from Ksh1.7 billion (USD16.7 million) in 2017.
This is expected to further dwindle based on the recent tiff with Uganda which has led the closure of borders, with Uganda being the main transit route between Kenya and Rwanda.
Kenya’s exports to Rwanda however surged to Ksh17.8 billion (USD175.4 million) from Ksh17.1 billion (USD168.5 million) in value.
Those to DR Congo, South Sudan, and Burundi however dropped to Ksh15.2 billion (USD149.6 million), Ksh12.9 billion (USD127.1 million) and Ksh16.8 billion (USD165.5 million), from Ksh18.9 billion (USD186.2 million), Ksh6.6 billion (USD 65 million) and Ksh7.4 billion (USD72.9 million) respectively.
“This was occasioned mainly by the political instability in these regions,” a trade expert told The Exchange.
EAC and Africa
Kenya’s total imports (value) from her EAC peers totaled Ksh68.4 billion (USD 673.9 million) an upward trend compared to Ksh60.9 billion (USD 600 million) the previous year.
The East Africa economic power house however lost ground on her exports to the regional markets where the total value dropped 1.9 per cent to close at Ksh129 billion (USD1.27 billion), from Ksh131.6 billion (USD1.29 billion) the previous year.
In the continent, South Africa topped as Kenya’s biggest trading partner with the trade being in favour of the southern country.
This is on the Ksh64.7 billion (USD637.4 million) worth of imports from SA up from Ksh61.9 billion (USD609.8 million), against exports valued at Ksh4.4 billion (USD43.3 million). Kenya however gained 57.1 per cent from Ksh2.8 billion (USD 27.6 million) a year earlier.
Other notable trading partners in Africa include Egypt where the country exported to, goods worth Ksh201. Billion (USD198 million), and Somalia whose imports from Kenya in the year amounted to Ksh15.1 billion (USD148.8 million).
Imports from Swaziland were valued at Ksh8.6 billion (USD84.7 million) a drop from Ksh11.2 billion (USD110.3 million ) in 2017, while those from Zambia closed the year at Ksh6.9 billion (USD67.9 million) after dropping from Ksh7.7 billion (USD75.8 million).
Mauritius, another key trading partner exported goods worth Ksh6.1 billion (USD 60.1 million) to Kenya, a drop compared to Ksh7.3 billion (USD 71.9 million) in 2017.
During the year, total imports from the African market were valued Ksh205.9 billion (USD 2.03 billion) a slight increase from Ksh200.5 billion (USD 1.98 billion) the previous year.
That of exports however dropped slightly, by 3.4 per cent, to close at Ksh216.2 billion (USD 2.13 billion) compared Ksh223.9 billion (USD 2.21 billion) the previous year, meaning Kenya lost its export market share in intra-Africa trade.
China and the World
China continues to dominate as the top source of imports into the country in the global scenario, despite losing five percentage points on its trade with Kenya last year.
According to the survey released this week, imports from china were valued at Ksh370.8 billion (USD3.65 billion) in 2018, a slight drop from 390.6 billion (USD3.85 billion) the previous year.
India comes in a distant second where imports from the Far East nation totaled Ksh185.3 billion (USD1.83 billion). This was however an increase from Ksh170.4 billion (USD 1.68 billion) worth of imports into the country in 2017, mainly on account of medicinal and pharmaceutical products.
The drop in the value of imports from china is seen as a result of reduced importation of machinery and equipment, related to the construction of the standard gauge railway, whose phase two-Nairobi-Mai Mahiu is 91 per cent complete.
Major Chinese imports to Kenya include machinery, electronics, motorcycles, motor vehicles spare parts, furniture and clothes.
Other top import sources for the country are Saudi Arabia and the United Arab Emirates (UAE), where total imports were valued at Ksh172.7 billion (USD 1.70 billion) and Ksh147 billion (USD 1.45 billion ) respectively.
The Asian continent remains the top source of imports into the country having closed at a total of Ksh1.168 trillion (USD 11.5 billion) in value last year.
It is followed by Middle East whose imports closed the year at Ksh355.7 billion (USD3.50 billion).
Imports from Europe and the US were valued at Ksh292.6 billion (USD2.88 billion), and Ksh85.9 billion (USD846.3 million) respectively last year.
Exports to china last year were valued at a paltry Ksh11.1 billion (USD 109.4 million) with the total exports to Asia closing at Ksh180.9 billion (USD1.78 billion).
“The increase in exports to Far East was largely due to significant improvement in exports to India, China, Thailand and Afghanistan,” KNBS notes in its survey.
According to the official government statistics, trade balance widened by 1.4 per cent to a deficit of Ksh1.147 trillion (USD11.30 billion) in 2018, from a deficit of Ksh1.131 trillion (USD 11.14 billion) in 2017.
“The growth of exports weakened in 2018 compared to the strong performance recorded in 2017, as increased uncertainties in the global trade led to constrained external demand,” KNBS Director General Zachary Mwangi noted during the release of the survey in Nairobi.
Kenya’s top exports include tea, horticulture, articles of apparel and clothing accessories, coffee, titanium ores and concentrates, collectively accounting for 62 per cent of the total domestic export earnings.
“The rise in exports was mainly as a result of increase in exports of horticultural products, while the slowdown in import growth was attributable to decline in imports of food due to favourable weather conditions as well as a reduction in the value of machinery and transport equipment imports,” Mwangi said.
The government has prioritized growth of the manufacturing sector, under the big four agenda, with a key focus on value addition on local produces, as it seeks to bridge the trade deficit and increase the sector’s contribution to the GDP.
“We have been implementing various initiatives to support manufacturers. This includes cutting by half the cost of electricity for industries,” National Treasury CS Henry Rotich said.