Kenya’s trade deficit shrinks Sh15bn lower imports

Port of Mombasa
Port of Mombasa. FILE PHOTO | NMG 

A slowdown in manufacturing activities and completion of a modern railway amid a drop in export earnings helped narrow Kenya’s trade deficit for the first time in three years, provisional statistics show.

The deficit — the gap between imports and exports — shrank by Sh15.55 billion to Sh1.05 trillion in the 11 months through November 2019, according to fresh data collated by the Kenya National Bureau of Statistics (KNBS), marking the first drop since 2016.

The 1.46 percent contraction was largely driven by a slowed growth in manufacturing, which suffered a cash crunch against the backdrop of mounting arrears by the government and credit rationing by commercial banks. The troubles of Kenyan factories, which largely rely on materials and machinery from abroad, helped push down the country’s import bill for the January-November period by Sh33.22 billion, or 2.03 percent, to Sh1.60 trillion.

Earnings from exports, on the other hand, slipped at a faster rate of 3.10 percent, or Sh17.66 billion, to stand at Sh551.25 billion in the year to November, the KNBS data show.

A persistently higher trade deficit, economists say, slows down creation of new job opportunities for the growing number of graduates as much of the revenue earned within Kenya is spent on buying goods from foreign factories, thereby raising production and job openings there.


Industrial supply orders from foreign countries fell by nearly Sh27.50 billion in the review period to Sh540.69 billion, pointing to a slowdown in manufacturing activities, the data show.

The sector grew at a slower rate of 3.2 percent, 4.2 percent and 3.1 percent in the first, second and third quarter of 2019 compared with 3.8 percent, 4.7 percent and 5.1 percent, respectively, in a similar period in 2018, the data show.

Expenditure on transport equipment shipped from abroad, on the other hand, dropped Sh8.97 billion, or 5.1 percent, to Sh166.95 billion.