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Economy

Uganda overtakes South Africa in Kenya exports

Labourers in Nakuru carry bananas imported from Uganda. -PHOTO | SULEIMAN MBATIAH | FILE
Labourers in Nakuru carry bananas imported from Uganda. PHOTO | SULEIMAN MBATIAH | FILE 

Uganda overtook South Africa for the first time in November as the largest source of goods ordered by Kenyans, underlining the impact of drought which saw electricity and food imports shoot up.

Kenya’s monthly import bill from Uganda jumped more than two-fold to Sh7.59 billion compared with Sh2.93 billion in October, marking the highest ever recorded monthly imports value from the land-locked country.

Goods from South Africa stood at Sh4.60 billion, a 5.66 per cent drop compared with October’s value.

However, the Central Bank of Kenya data did not give reasons for the spike in the value of imports from Uganda.

Kenya largely buys foodstuffs, especially cereals, and electricity from the west-neighbouring country, its biggest trading partner.

Biting drought

A biting drought, which started toward the end of 2016 through the first half of 2017, left at least 1.3 million people in need of food aid and drove down water levels in dams, ultimately hitting hydro power generation.

Uganda has been exporting electricity to Kenya in bulk under an agreement signed during colonial times, but renegotiated at Uganda’s insistence in 1997, through a direct electricity transmission line connecting from Tororo.

Poor weather also forced Kenya to buy food such as maize, rice, sugar and milk powder to meet local demand and ease rising prices.

During the first 11 months of last year, food imports more than doubled to Sh223.86 billion, representing a spike of 124.15 per cent.

That helped drive up Kenya’s trade deficit — the gap between imports and exports —  to more than a Sh1 trillion mark for the first time.

Imports from Uganda in the January-November period doubled to Sh35.08 billion from Sh17.75 billion in the same period in 2016, leapfrogging Egypt to become the second importer of goods to Kenya in Africa. 

Biggest seller

South Africa, however, remained the biggest seller of goods to Kenya in the continent in the period at Sh57.70 billion, a growth of 28.31 per cent year-on-year.

South Africa sells to Nairobi goods such as wines and other alcoholic drinks, cars as well as spare parts, oil lubricants and machinery.

The value of goods shipped in from Egypt in the 11-month period also rose by a fifth to Sh32.50 billion, while Tanzanian traders trucked in goods valued at Sh15.18 billion which is 29.22 per cent more than the year before.

Overall, Kenya imported goods worth Sh180.24 billion from Africa in the 11-month period, Sh53.96 billion more than a year earlier, the CBK data shows.

Global imports into Kenya grew by Sh274.02 billion, or 20.93 per cent, to Sh1.58 trillion in the period, while exports rose a measly 3.37 per cent to Sh549.18 billion.

Nearly half of the growth in imports (45.31 per cent) was food.

Machinery, nonetheless, accounted for the largest share of the imports at Sh449.48 billion, an 11.71 per cent growth from 402.35 billion in first 11 months of 2016.

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