February trade gap widens to Sh192bn as export earnings fallMonday April 08 2019
The gap between Kenya’s imports and exports widened in the first two months of the year to Sh192 billion from Sh175 billion in the same period last year, official records show.
Latest Central Bank of Kenya (CBK) data indicates export earnings dropped from Sh110.7 billion to Sh104 billion blamed on poor earnings from tea. By comparison, import bills grew slightly by 3.4 percent to a record Sh296 billion, highlighting growing appetite for foreign goods. This comes as Pakistan ceded its first position as the biggest destination of Kenyan goods to Uganda and Netherlands, which took the first and second spots respectively in the two-month period.
The unfavourable terms of trade leaves the shilling exposed as less dollars are earned even as more of hard currencies are required to pay for the imports.
Exports to Uganda grew by Sh124 million to Sh10.71 billion. On the contrary imports from Uganda fell by Sh7.94 billion to a paltry Sh4.5 billion.
This comes at a time when Kenyans have been claiming Uganda is giving Kenya a raw deal as the landlocked country has flooded the Kenyan market with its products such as eggs and clothes.
Expenditure on machinery and transport equipment’s rose by 22 percent to Sh86.8 billion mainly due to SGR related imports. As the country rushed to finish phase 2A of the project. Expenditure on food imports dropped by 24 percent to Sh28.7 billion. Receipts from tea took a nose dive earning Kenya Sh21.46 billion down from Sh26.9 in the same period last year. Horticulture earnings rose by Sh1.7bn to Sh19.7 billion in the same period.
Kenya has struggled to grow her exports over the years, widening her trade deficit to Sh1.145 trillion in 2018 from Sh1.13 trillion the year before.