Market News

Exports to China, India stay flat despite charm offensive

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A cargo ship arrives at the Mombasa port. FILE PHOTO | NMG

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Summary

  • The share of Kenya’s exports to China and India has remained largely flat despite a strategic shift three years ago to woo more buyers in the key markets.
  • Kenya’s earnings from exports to the two giant markets amounted to Sh22.77 billion last year.

The share of Kenya’s exports to China and India has remained largely flat despite a strategic shift three years ago to woo more buyers in the key markets.

Kenya’s earnings from exports to the two giant markets amounted to Sh22.77 billion last year, an equivalent of 3.48 per cent of Sh654.31 billion ($6.035 million) total sales abroad, according to trade data Kenya Revenue Authority (KRA) shared with the Central Bank of Kenya (CBK).

That was marginally unchanged from Sh21.9 billion, or 3.43 per cent, of Sh639.14 billion ($5.895 billion) which Kenya earned in 2019 and Sh21.58 billion (3.21 per cent) share of Sh672.64 billion ($6.2 billion) a year earlier.

Kenya made accessing the populous Chinese and Indian markets a priority under the Integrated National Exports Development and Promotion Strategy, an export diversification plan unveiled in July 2018.

The five envoys posted to the Far East Asian region — including Malaysia and Singapore —in August 2018 were also given clear instructions to scout for new markets for Kenya’s largely raw agricultural exports in China and India.

This was in a bid to narrow the runaway goods trade deficits with the two countries which have for years accounted for more than a third of Kenya’s total imports.

The data, published by the CBK, shows China and India— the respective world’s first and second largest country by population — shipped goods estimated at $5.17 billion (Sh560.1 billion) last year, 35.85 per cent of $14.41 billion (Sh1.56 trillion) total imports into Kenya.

Before Covid-19 struck, Nairobi had been conducting aggressive trade promotion and marketing campaigns in China, primarily aimed at growing and expanding the market for Kenyan farm produce.

“The (exports) strategy has adopted a value chain approach that focuses on key sectors that promise growth and has identified the cross-cutting issues that need to be addressed holistically to catalyse development of sectors, products as well as interventions in the markets for improved performance,” Kenya Export Promotion and Branding Agency (Keproba) said via email.

Orders for Kenya’s produce by China fell 6.71 percent to $139 million (Sh15.07 billion) last year from $149 million (Sh16.15 billion) a year earlier which was a record in recent years for a country which largely buys cut flowers, specialty tea, coffee, beans and avocadoes.

This was against an import bill of Sh367.87 billion ($3.39 billion) for China in 2020, a marginal 2.5 percent drop compared with prior year.