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Kenya’s exports to East Africa drop by Sh11b

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Workers at Sky Foods Limited factory TreeTop juice in Juja, Kiambu. Kenya’s exports to East Africa dropped by the largest margin in three years in the third quarter of 2016. FILE PHOTO | SALATON NJAU

Workers at Sky Foods Limited factory TreeTop juice in Juja, Kiambu. Kenya’s exports to East Africa dropped by the largest margin in three years in the third quarter of 2016. FILE PHOTO | SALATON NJAU 

By ALLAN OLINGO, aolingo@ke.nationmedia.com

Posted  Wednesday, January 11   2017 at  13:16

In Summary

  • All countries in the region, with the exception of the Democratic Republic of Congo, cut their uptake of imports from Kenya, according to a report from KNBS.
  • The encroachment by Chinese products and local barriers are to blame.

Kenya’s exports to the region dropped by the largest margin in three years in the third quarter of last year, to $275.7 million (about Sh28 billion) from $380.3 million (about Sh39 billion) in the first nine months of 2015, new data shows.

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All countries in the region, with the exception of the Democratic Republic of Congo, cut their uptake of imports from Kenya, according to a report from the Kenya National Bureau of Statistics.

While the drop in exports has been attributed to encroachment in key market segments by Chinese products, local factors like taxation, new competing industries in export markets and instability in South Sudan have contributed to the trade down turn.

Goods from China, some of dubious quality, have flooded the market, making the Asian giant the biggest exporter to the region.

Relying on Africa

Kenya relies on Africa to absorb more than 40 per cent of its manufactured exports. The data shows a 30 per cent drop in exports to Uganda to $152.1 million (Sh15.8 billion) in the period under review, from $228.18 million (Sh23.7 billion) over the same period in 2015.

“Africa remained the leading destination of the country’s exports, accounting for 40.6 per cent of the total during the review period. Within Africa, Uganda was the largest market for Kenya’s exports, accounting for 11.3 per cent of total export earnings, followed by Tanzania, which accounted for 5 per cent of total export earnings in the third quarter of 2016,” the report notes.

Tanzania’s imports from Kenya dropped to $67.5 million in the third quarter of last year, from $78.2 million over the same period two years previously.

Rwanda, which in 2015 was the only country that had increased its imports from Kenya, also recorded a drop to $43.12 million (Sh4.48 billion) from $56.55 million Sh5.88 billion). It was only DRC that recorded an increase at $51.3 million from $48.8 million.

The KNBS figures show that imports from China rose to $935.4 million in the third quarter of 2016, from $909.8 million over the same period the previous year, making it the leading source of imports in the Asian region.

Kenya has also seen its trade with the region drop significantly over the quarter to $359.4 million, from $480.1 million over the same period in 2015.

Kenya exports edible oil, fabrics, food, animal products, tobacco and cement to the region, but the growing push by local firms to set up subsidiaries in the region has also seen a decline in supply of these goods.

Adulterated fuel

The biggest drop in exports was registered in cement, which dropped to $7.6 million, from $25.6 million in 2015. Cement manufacturers blame the declining volumes on the proliferation of cheap imports, while the entry of Dangote Cement into markets like Tanzania compounded the problems as the firm offered a 40 per cent price cut on its products.

Concerns over adulteration of the country’s petroleum products saw its exports to neighbouring countries drop to $13.9 million, from $20 million in the third quarter of 2015.

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