Economy

Two-month trade deficit narrows to Sh175 billion

MSA

Kenya’s trade deficit for the first two months of year narrowed by Sh17.16 billion to Sh175 billion from Sh192 billion. FILE PHOTO | NMG

timothy odinga

Summary

  • Kenya’s trade deficit for the first two months of year narrowed by Sh17.16 billion to Sh175 billion from Sh192 billion reported over the similar period last year, data from the CBK shows.
  • The nine percent reduction in the deficit, which is a measure of the difference between exports and imports, was as a result a growth in export receipts followed by a slowed down import bill.
  • Total export receipts over the period grew by 10 percent to a new high of Sh114.2 billion from Sh104 billion in the first two months of 2019.

Kenya’s trade deficit for the first two months of year narrowed by Sh17.16 billion to Sh175 billion from Sh192 billion reported over the similar period last year, data from the CBK shows.

The nine percent reduction in the deficit, which is a measure of the difference between exports and imports, was as a result a growth in export receipts followed by a slowed down import bill.

Total export receipts over the period grew by 10 percent to a new high of Sh114.2 billion from Sh104 billion in the first two months of 2019.

Key export commodities including tea, horticulture and coffee reported mixed results, with tea earnings growing by Sh3.48 billion to Sh25 billion and coffee receipts recording a Sh0.2 billion jump to Sh3.67 billion.

Horticulture earnings fell by Sh4.4 billion to Sh15.38 billion, which is the lowest since 2016. The falling horticulture revenue has been widely blamed on the Covid-19 pandemic that has affected European markets.

“Flowers have been negatively impacted with nearly all of the orders that had been placed having been cancelled so far,” said Benjamin Tito, the head of horticulture directorate.

Uganda remained the largest destination of Kenyan goods, spending Sh11.98 billion on Kenyan imports up from Sh10.7 billion in the first two months of last year, followed by The Netherlands at Sh9.13 billion and the UK at Sh9 billion.

The import bill fell by Sh7.1 billion to close the two-month period at Sh289.2 billion, compared to Sh296.3 billion in a similar period last year, with the biggest spenders of Kenyan forex by larger economic classification all reporting declines.

Fuels and lubricants expenditure dropped by Sh4 billion to Sh48 billion as oil prices fell, manufactured goods dropped by Sh5 billion to Sh44.8 billion.