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Economy

Kenya Africa exports slide continues to new eight-year low

Kenya's trade with other African countries
Kenya's trade with other African countries dropped 45 per cent in the first four months. FILE PHOTO | NMG 

Kenya’s exports to key markets in Africa fell to an eight-year low in the first four months of the year, official statistics show, continuing a trend that has been reflected in annual data over the years.

Latest data by the Central Bank of Kenya (CBK) show earnings from the continent were about Sh71.44 billion, a 4.5 per cent drop compared to the same period in 2017 and the lowest since 2010.

Reduced trade between Kenya and the rest of Africa is in keeping with a trend observed in the 12 months to December 2017.

Kenyan factories have been losing their market share in Africa despite the country being a member of the six-nation East African Community (EAC) and 19-member Common Market for Eastern and Southern Africa (Comesa) partly due to import substitution amid dwindling industrial competitiveness.

Export orders from neighbouring Uganda, the country’s largest market in Africa, for example fell by 5.69 per cent in the period to Sh20.41 billion, maintaining a flat trend witnessed in recent years.

“We don’t get our VAT refund on time, we don’t get export incentives and that’s why our trade within the region has been reducing,” Kenya Association of Manufacturers (KAM) vice chairman Sachen Gudka said in an interview late April.

“The government should address competitiveness because when you look at Kenya in terms of global benchmarks, cost levels are at least 10 per cent higher.”

Kenya’s exports to Africa, however, accounted for 33.74 per cent of her total exports, which stood at Sh211.71 billion between January and April, the CBK data shows.

Intra-Africa trade remains at a lowly 10 per cent, meaning African countries trade more with other continents such as Europe than they do among themselves.

The country is championing a plan to remove trade barriers among African countries to grow movement of goods, services and labour through African Continental Free Trade Area (AfCFTA) which will create a market of at least 1.2 billion people upon ratification.

Kenya and Ghana on May 10 became the first countries to ratify the AfCFTA deal which requires a minimum of 22 countries to be operationalised.

President Uhuru Kenyatta’s administration also became the first country last Friday to present documents ratifying the proposed Comesa-EAC- Southern African Development Community (SADC) tripartite free trade area.

The Comesa-EAC-SADC trade agreement, reached in June 2015 bringing together 27 Eastern, Central and Southern Africa’s countries, requires a minimum of 14 countries to ratify in order to come into force.

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