Covid-19 cuts imports by 20pc as businesses grind to a halt

Kenyan importers are counting billions of shillings in lost revenue as global effects of the coronavirus pandemic continue to disrupt international supply chains and trade in many countries.

Data from the Kenya National Bureau of Statistics (KNBS) indicates that the total value of imports fell to Sh573.2 billion in the first seven months of this year, compared to Sh716 billion recorded over a similar period last year. 

The United Arab Emirates (UAE) registered the largest fall in imports, with Kenyan imports from the region falling to Sh48 billion in the first seven months of this year, down from Sh102 billion in 2019.

The fall in imports is attributed to reduced local demand following the government’s move in March to ban social gatherings and introduce movement restrictions that disrupted operations of many businesses.

China remains Kenya’s largest source of imports, with trade volumes for the first seven months of this year standing at Sh192 billion, a six per cent drop compared to last year.

Kenya’s exports, however, seemed to defy the tough operating environment, with the total value of exports for the first seven months of the year standing at Sh206 billion, four per cent higher compared to a similar period last year. 

“Domestic exports by broad economic category indicated that food and beverages were the main export category in July, accounting for 46.06 per cent of exports, while non-food industrial supplies accounted for 22.29 per cent of the total exports,” explains the KNBS in the latest trade figures.

Exports to Uganda and Tanzania, two of Kenya’s major export markets in the region, remained unchanged compared to the previous year, with total exports standing at Sh30.5 billion and Sh15 billion respectively for the seven months to July 2020.

Exports to other countries in Europe however, including the UK, Germany and France went up marginally except in the Netherlands where Kenya’s horticultural produce suffered from the grounding of international flights. 

Tea and coffee exports, which contribute heavily to foreign earnings, posted a mixed performance. “The quantity of coffee exported decreased from 5,414.08 tonnes in June 2020 to 3,546.25 tonnes in July 2020 and its value dropped from Sh2.9 billion to Sh1.7 billion over the same period,” said KNBS in its report.

“The quantity of tea exported increased from 46,399.01 tonnes in June 2020 to 46,850.57 tonnes in July 2020. However, the value of exported tea dropped from Sh10.2 billion to Sh10 billion over the same period.”

The manufacturing sector also appeared to show signs of a rebound with cement production increasing from 510,919 tonnes in June to 514,233 tonnes in July 2020.

Cement consumption, however, fell from 508,298 tonnes to 447,902 tonnes over the same period. 

This is attributed to uncertainties experienced by real estate developers, with only Sh61 billion worth of buildings approved for construction in May by Nairobi City County, down from Sh250 billion in May last year.