Kenya’s balance of trade isn’t looking good. According to Economic Survey 2012 findings released on Tuesday by the Ministry of Planning , Kenya’s value of imports grew by 38.9 per cent to Sh1.3 trillion from Sh947 billion in 2010. This is in comparison to exports that grew by 24.7 per cent to Sh511 billion in 2011 from Sh409 billion in 2010. The survey revealed a growing pattern where Asian countries, specifically India and China, have over the last five years been increasing their share of imports to Kenya and have now surpassed West European and American States.
The two countries accounted for more than 22 per cent of the total import bill. Of the Sh1.3 trillion, imports from India and China were valued at Sh292 billion.
India was the single largest source of imports in 2011 overtaking China, which had significantly grown its exports to Kenya over the last decade to being the largest exporter, until last year.
Kenya imported goods worth Sh148.7 billion in the period under review from India, a 44 per cent increase over Sh103 billion in 2010. Imports from China increased by 19 per cent to Sh144 billion from Sh120 billion. The trend last year was a reversal of what happened over the last five years, where Chinese imports to Kenya have been growing by over 50 per cent every year.
“The rise of imports from India was largely due to increase in import values of petroleum and medicaments,” said the survey.
Imports from Pakistan more than doubled to Sh17.3 billion from Sh8.2 billion in 2010. The Government attributed this to importation of unmilled wheat to supplement low local production.
Imports from European Union also grew, with key imports from Spain growing by 95 per cent. Increases were recorded on chemicals, hydraulic pumps and petroleum products. Belgium increased its exports to Kenya by about 30 per cent and UK by 14 per cent.
The survey, however, noted a slowdown in imports from UK, which previously had significant grip on the country.
“The share of imports from UK has been slowing down over the last three years to account for 3.3 per cent of total import bill in 2011,” said the survey. Imports from US also slowed down over the last three years to account for 3.4 per cent of total import bill in 2011.
In Africa, South Africa was the largest exporter to Kenya with goods valued at Sh71 billion, a 32 per cent increase mostly due to increased imports of iron and steel products. Its share of imports has also been declining and today accounts for 5.4 per cent of the total import bill.
Turning to exports, agricultural products remained key, with tea, horticulture and coffee being the leading exports.
Apparel and clothing were also key exports. These commodities collectively accounted for 47 per cent of total domestic export earnings.
Kenya might be facing some trouble in the near future as the economy’s growth has experienced a steady decline since early last year. Many are worried that the drop in gross domestic product (GDP) is an indication of an underlying problem in the economy, in which the level of imports is disproportionately high against the level of exports.