Kenya's exports to the East African Community (EAC) fell by more than 27 per cent in the third quarter of 2016 further, loosening the country's grip on the key regional market.
Data from the Kenya National Bureau of Statistics (KNBS) indicates Kenya's exports to Uganda, Tanzania, Rwanda and Burundi reduced from Sh40 billion recorded in the third quarter of 2015 to Sh29 billion in similar period of 2016.
This is bad news for the country's manufacturing sector that relies on the EAC to absorb 40 per cent of Kenya's manufacturing exports. In addition to this, the entry of China and India into the regional market has eroded Kenya's market share from 9 per cent in 2009 to just 7 per cent as at 2013.
"In the Africa region, Uganda was largest market for the country's exports, accounting for 11.3 per cent of total export earnings followed by Tanzania, which accounted for 5 per cent of total export earnings in the third quarter of 2016," explains the statistics office in part.
The value of exports to Uganda fell from Sh24 billion recorded in the third quarter of 2015 to Sh16 billion, contributing a large part to the overall decline of exports to the region. The report comes at the end of a tumultuous year for the EAC member states that threatened to scuttle the regional integration process. Key among them is the stalled ratification of the Economic Partnership Agreement (EPA) that had been more than 15 years in the making.
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- 2 State’s challenge in increasing exports while slowing imports
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- 4 Drop in tea and coffee exports eat into Kenya's foreign earnings
Tanzania and Uganda are yet to ratify the treaty leading to an impasse that is likely to send the regional bloc back to the drawing board. In the international scene, Africa remained the leading destination for the country's exports accounting for 40.6 per cent of total exports during the review period.
"The Netherlands and United Kingdom continued to dominate as the leading destinations of exports within the European Union (EU), jointly accounting for 14 per cent of total exports in the third quarter of 2016," explained the statistics office. "However, export earnings from these two destinations declined in the quarter under review. Despite a decline of 4.2 per cent in exports to Asia, total exports to Pakistan rose by 15.2 per cent to Sh9.6 billion in the third quarter of 2016, compared to a similar period the previous year."
Export earnings from America, another key bilateral trading partner for Kenya, grew by 12.4 per cent, driven by increase in export articles of apparel and clothing accessories. Asia was the leading source of imports accounting for 67.7 per cent of Kenya's total import bill in the third quarter of 2016.
Imports from China rose from Sh95.7 billion in third quarter of 2015 to Sh98.4 billion in the third quarter of 2016 making it the leading source of imports in the Asia region.