Growing Kenya’s share of exports to African markets

A worker loading tea for auction and export. 

Photo credit: File | Nation Media Group

Kenya is expected to rise above the waves of the Covid-19 pandemic in terms of economic recovery, according to the 23rd Edition of Kenya Economic Update recently launched by World Bank. The Economic Survey 2022 shows Kenya's real GDP grew by around 7.5 percent in 2021, compared to a contraction of 0.3 percent realised the previous year.

There has been gradual, normalisation in economic activity in most sectors, including manufacturing and exports. Against the back of a weaker global economy due to the effects of the pandemic, Kenya has shown signs of resilience in most sectors. The total exports in 2021 grew to Sh743.7 billion compared to Sh643.7 billion in 2020 — an increase of 15.5 percent.

Kenya’s major exports are flowers, coffee, tea, fruits, vegetables, and textiles. Others are leather and footwear, metal and allied, chemical and allied, pharmaceutical and medical equipment, plastic and rubber, light engineering, automotive parts, and furniture.

Kenya also exports considerable professional services globally, including nurses, doctors, social workers, teachers, engineers, architects, economists, financial analysts, accountants, software developers and scientists. We also export financial and transport services.

Export markets where Kenya’s exports increased, according to the 2021 Export Performance Report, include Uganda (Sh6.9 billion), Tanzania (Sh5.5 billion), Rwanda (Sh3.5 billion), Pakistan (Sh3.3 billion), China (Sh3.2 billion), UAE (Sh2.6 billion), USA (Sh2.0 billion), and the Netherlands (Sh1.2 billion).

To increase and improve the export trade, the Ministry of Industrialization, Trade and Enterprise Development and its key agencies such as the Kenya Export Promotion and Branding Agency are implementing the Integrated National Export Development and Promotion Strategy to help our micro, small and medium enterprises across the country innovate and realise their potential in new value chains and products.

The move is also geared towards narrowing the balance of trade deficit through an envisioned export growth rate of 25 percent by the end of this year and 10 percent year-on-year by 2030 as envisioned by Vision 2030.

The Kenya Export promotion and Branding Agency seeks to contribute to this target through diversifying Kenya’s export products and markets, as outlined in its three-year strategic plan.

For all concluded trade agreements, we are keen to develop implementation strategies.

The ministry has also developed an AfCFTA Implementation and Communication Strategy to ensure that the Kenya National AfCFTA implementation strategy, among other aspects, increases the country’s GDP, overall exports and exports to all African sub-regions as well as boosts manufacturing.

In 2021, Kenya’s exports to GDP stood at 10.57 percent — 0.93 percent higher than the contribution of exports to GDP in 2021 (9.64 percent).

One of the biggest impediments to our export performance is the question of quality and pricing of our products. Consumers in our target market are quality and price-sensitive.

We must therefore polish our products and ensure they meet international standards in terms of quality to be able to survive the stiff competition in the global market.

Sanitary and phytosanitary (SPS) measures and standards are meant to ensure consumer protection and confidence in domestic or imported food and feed.

To effectively facilitate trade and narrow down trade balance between countries, Kenya has entered various SPS-related frameworks which further domesticate the SPS Agreement, including African continental free trade area (AfCFTA), EAC-COMESA-SADC Tripartite, COMESA, EAC and a few bilateral agreements such as EAC-EU-EPA.

Kenya is therefore keen to pursue knowledge sharing and technology transfer in laboratory testing, inspections, agriculture and seed production methods, agro-processing and value addition and treatments in the agriculture and food sectors.

All players, including firms producing for domestic markets as well as export markets and domestic consumers and consumers in export markets, will benefit.

Aside from high standards in international markets, market access issues, stiff market competition and high cost of doing business are also challenges.

The Kenya Export Promotion and Branding Agency is engaging partners in Uganda, Tanzania, Ethiopia with a view to understanding and alleviating challenges to trade across borders and transit to hinterland economies.

We are also engaged on research specific to markets to isolate opportunities and market access conditions. Some of the products Kenya can produce efficiently and that have demand in Africa include medicaments, plastics and paper containers, semi-manufactured gold and prefabricated buildings.

Additionally, the Ministry of Industrialisation, Trade and Enterprise Development is charged with the role of formulating and implementing policies that are expected to aid the realisation of the national goals aligned to job and wealth creation.

This is being done through offering fiscal support by establishing the MSE Development Fund, which will provide affordable credit facilities to the MSMEs.

Once this fund is operationalised, it is expected to provide affordable and accessible credit to MSEs as well as finance the promotion and development, capacity building, research, innovation, and transfer of technology in MSE sector.

As an Agency, we are keen on working with partners like Afri-Exim Bank and other business-oriented facilitating bodies to support export-import financing mechanism to catalyse availability and access to export trade finance.

Dr Marube is the CEO of Kenya Export Promotion and Branding Agency

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