Commodities

Kenya’s export earnings hit Sh480bn on higher demand

flower

Workers prepare flowers for export. FILE PHOTO | NMG

timothy odinga

Summary

  • The strong earnings performance is attributable to foods and beverages exports.
  • KNBS shows that expenditure on imports dipped by Sh130 billion to Sh1.19 trillion in the nine months to September.
  • The mixed fortunes have led to narrowing of the trade deficit by 18.3 per cent to stand at Sh716.7 billion.

Kenya’s exports receipts grew by six per cent to Sh479.7 billion in the nine months to September, defying the economic knocks of the Covid-19 pandemic, data by the Kenya National Bureau of Statistics (KNBS) shows.

The strong earnings performance is attributable to foods and beverages exports, which accounted for 47 per cent of total export receipts. Over the same period of last year exports earnings were booked at Sh449.6 billion.

“Exports have remained robust despite the pandemic, receipts from tea have risen by 17.1 per cent with increased output, horticulture exports remain strong mainly reflecting the normalisation of demand in the international market and availability of adequate cargo space,” said the Central Bank of Kenya (CBK) in a statement in September following a meeting of its Monetary Policy Committee.

The latest data by the KNBS shows that expenditure on imports dipped by Sh130 billion to Sh1.19 trillion in the nine months to September 2020 compared to the Sh1.327 trillion recorded over a similar window of last year.

The mixed fortunes have led to narrowing of the trade deficit by 18.3 per cent to stand at Sh716.7 billion.

Trade volumes have this year slipped, largely due to the Covid-19 pandemic, which has seen most countries impose containment measures such as movement restrictions that reduced production and consumption levels globally.

“Shutdown in mass production and supply chain disruptions due to the rare twin supply-demand shock will cause further uncertainty in Africa, a continent already grappling with widespread geopolitical and economic instability,” the World Bank said in June.

In the period under review Uganda remained the biggest consumer of Kenya goods, importing Sh43.02 billion worth of Kenyan goods followed by Pakistan (biggest consumer of Kenya’s tea) at Sh41.55 billion being a 28 per cent increase.

Exports to the United Kingdom rose by 25.4 per cent to Sh37.3 billion to rank third followed by earnings from the US which fell by eight per cent to Sh35.4 billion.

Chinese goods remained dominant in Kenya’s import mix amounting to Sh262.5 billion in the nine-month period flat from last year’s Sh261 billion, followed by Indian goods at Sh141 billion in the period.

Imports from The United Arab Emirates and Saudi Arabia, which are majorly petroleum products recorded the biggest dip, falling by 50 and 42 per cent respectively to Sh61.7 billion and Sh57.4 billion as global oil prices fell to record low on reduced oil demand.

According to the World Economic forum, world merchandise trade is set to plummet between 13 and 32 percent this year, depending on how quickly the coronavirus will be contained to allow trade to return to pre-crisis levels.