Kenya’s earnings from goods exported to African countries outpaced expenditure on imports by more than Sh40 billion in the first quarter of the year, largely lifted by increased demand for tea and re-exports of jet fuel.
Official data shows traders sold merchandise worth an estimated Sh113.94 billion to markets on the continent while buying goods valued at Sh71.93 billion.
This resulted in a trade surplus of Sh42.01 billion from Sh37.33 billion a year earlier. This came despite the value of exports growing at a slower rate of 13.95 percent from Sh99.99 billion a year ago when it had climbed 12.70 percent, according to data collated by the Kenya National Bureau of Statistics (KNBS).
The rise in exports to African countries was supported by increased earnings from the Democratic Republic of Congo which jumped by 56 percent to Sh8.62 billion, Egypt (45.7 percent to Sh10.47 billion), South Sudan (25.7 percent to Sh9.27 billion), Tanzania (18 percent to Sh16.74 billion) and Uganda (7.4 percent to Sh33.34 billion).
“Notably, there were increased domestic exports of tea to Egypt; wheat flour to the Democratic Republic of Congo; carboys, bottles, flasks, and similar articles to Uganda; household or laundry-type washing machines to South Sudan; and re-exports of kerosene-type jet fuel to Tanzania,” KNBS said in a trade report for the quarter ended March.
The import bill arising from goods trade between Kenya and the rest of Africa in the review period recovered to grow 14.79 percent to Sh71.93 billion after contracting 6.85 percent to Sh62.66 billion a year ago.
The rebound in spend on imports helped slow growth in Kenya’s merchandise trade surplus to 12.56 percent in the review quarter from a jump of 150.7 percent previously.
“Expenditure on imports from Africa rose by 14.8 percent in the quarter under review, from Sh62.7 billion in the first quarter of 2023,” the Balance of Payment report states.
“This development was partly on account of increased imports from South Africa and Tanzania, which went up by 33.7 percent and 90.7 percent, respectively. Particularly, there was increased importation of coal from South Africa; and chemical fertilisers and mosquito nets from Tanzania” it added.
The KNBS data shows Africa remained the largest destination for Kenya’s total exports which amounted to Sh255.32 billion in the three months ended March, a 19.5 percent growth over Sh213.66 billion a year ago.
However, Africa’s share of exports shrank to 38.3 percent from 43.1 percent in the first quarter of 2023.
This has come at a time when President William Ruto has taken a leading role in championing the removal of trade barriers among African countries to ease the movement of goods, services, and labour through the integration of regional trading blocs.
The integration is aimed at creating the world’s largest single market of about 1.4 billion people with an estimated economic output of more than $3 trillion (about Sh474 billion under prevailing conversion rates) under the ambitious African Continental Free Trade Agreement.
Dr Ruto has particularly been aggressively rallying his counterparts on the continent to adopt a payment system that facilitates settlement of intra-African trade deals in national currencies as a first step towards reducing reliance on the US dollar in intra-Africa trade.
“Technology is going to play a big role, making sure that our businesspeople are not unnecessarily encumbered by looking at that currency and this currency to be able to trade. We will try and see whether we can take that out of the equation so that they can concentrate on enhancing trade between our countries,” the President said in the past.
