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Kenyan exports to Uganda rise as crisis hits EU

Kenya’s main exports to Uganda include manufactured goods like edible oil. file
Kenya’s main exports to Uganda include manufactured goods like edible oil. file  

Kenyan exports to Uganda have grown, enhancing the latter’s pole position as a trading partner and providing a fallback market for investors whose traditional markets in Europe and America have been dampened by economic crisis.

The exports have risen in the first seven months of the year to Sh38.4 billion, a 38.6 per cent rise over the Sh27.7 billion exported to the landlocked nation between June and December 2010.

“More traders from Kenya have found it easier to cross into the Ugandan side with their goods from January this year compared to last year,” Mr Vimal Shah, CEO of Bidco Oil Refinery Ltd said, adding the rise was not connected to the weaker shilling.

The bulk of Kenya’s exports to Uganda is conducted in dollars, the preferred international currency of exchange that has appreciated by more than 25 per cent against shilling in the year to July.

All the five East African countries stopped charging tariffs on Kenyan exports in January 2010 before launching a common market to ease exchange of factors of production in July of the same year.

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Mr Shah said growth in export reflects the high number of firms that are shifting their focus to EAC market since January this year, with Uganda getting more attention due to its trade-friendly policies. Trade ministry officials said the falling barriers would boost exports to any of the EAC countries.

Uganda has been Kenya’s top importer in the last five years. “There has been nothing peculiar in bilateral engagement with Uganda other than regional agreements,” said Mr Simon Chacha, the external trade secretary.

The United Kingdom, which has ruled the exports table for a long time, comes a distant second with Sh26.2 billion worth of goods in the first seven months. Goods to Tanzania were valued at Sh21.4 billion, a growth of 7.5 per cent compared to the Sh19.9 billion in the last seven months of 2010.

The brighter side of the eurozone economic crisis that has filtered into Kenya through a stronger dollar can be discerned through the sharp growth in the value of exports to the Netherlands, a key market to Kenya’s flowers.

It has overtaken the US as the fourth largest destination for Kenya’s exports after the weaker shilling lifted export earnings in the first seven months of the year to Sh19.4 billion, a growth of 31.9 per cent compared to the last seven months of 2010.

The Kenya National Bureau of Statistics figures show exports to US have dropped by 9.3 per cent in the period to Sh14.1 billion. Through the African Growth and Opportunity Act (Agoa) the US administration has created a multibillion export market for goods from the sub-Saharan African countries including Kenya. Textiles have dominated Kenya’s export to the US since Agoa was enacted ten years ago, removing tariff and quota restrictions.

On Tuesday, textile exporter Jas Bedi of Bedi Investments said the drop was not linked to America’s economic strength but high cost of raw materials and other inputs as our duty and quota free market access remains assured.

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