Money Markets
President Uhuru Kenyatta and US Secretary of State John Kerry lead talks
between Kenyan and US delegations at State House, Nairobi on May 4,
2015. PHOTO | PSCU
By GEORGE NGIGI, gngigi@ke.nationmedia.com
In Summary
- The exponential growth of US exports to Kenya happened despite the Kenyan President Uhuru Kenyatta standing out as a leading advocate of intra-Africa trade who has made a series of trade promotion trips across the continent since coming to office in 2013.
- Kenyan exports to Africa rose by four per cent to Sh241 billion, supported largely by increased purchases by Ethiopia, the Democratic Republic of Congo and South Sudan.
- The rapid growth of exports to Kenya has caught the eye of the world’s largest economy, which is seeking to stop China’s hitherto unchallenged march on the fast-growing continent.
- India is the largest exporter to Kenya, with goods worth Sh264 billion purchased last year followed by China, Sh248 billion.
Kenya has for the first time bought more goods from
the United States in one year than it did from the whole of Africa,
underlining growing commercial ties that are expected to deepen with the
recent thawing of relations and President Barack Obama’s visit in July.
US exports to East Africa’s largest economy rose to Sh168
billion last year compared to the Sh146 billion worth of goods and
services that came from Africa, according to data from the Kenya
National Bureau of Statistics (KNBS).
At Sh146 billion, the value of imports from Africa
dropped marginally even as the value of goods and services from the
world’s largest economy tripled.
The exponential growth of US exports to Kenya
happened despite the Kenyan President Uhuru Kenyatta standing out as a
leading advocate of intra-Africa trade who has made a series of trade
promotion trips across the continent since coming to office in 2013.
“The value of imports from South Africa contracted
from Sh70 billion to Sh63 billion in 2014. The value of imports from
Mozambique and Nigeria also dropped by 60 per cent and 56 per cent
respectively,” said the KNBS in this year’s economic survey report.
Kenyan exports to Africa rose by four per cent to
Sh241 billion, supported largely by increased purchases by Ethiopia, the
Democratic Republic of Congo and South Sudan.
The KNBS data shows export volumes to Kenya’s
largest market, Uganda, dropped by seven per cent while trade with
Somalia also contracted by Sh3.7 billion.
“The biggest reason there is so little intra-Africa
trade is that we produce the same things – raw material. So why trade
among ourselves? No wonder South Africa and Egypt are doing well because
they have a good manufacturing base,” said Dr XN Iraki, a lecturer of
economics at the University of Nairobi.
Intra-Africa trade is also hampered by physical and
non-tariff barriers, making it easy for countries outside the continent
to grab trade opportunities.
East African countries are currently working on
projects such as the Lamu Port and South Sudan, Ethiopia Transport
Corridor (Lapsset) to link their markets. Non-tariff barriers include
visa applications, at a fee, in order to travel to most of the other
African states.
The rapid growth of exports to Kenya has caught the
eye of the world’s largest economy, which is seeking to stop China’s
hitherto unchallenged march on the fast-growing continent.
“There seems to be a sustained effort to increase
the amount of trade between the US and Kenya. Behind Clinton, Kerry and
Obama visit is trade and investment. Americans know how to smell money,”
noted Dr Iraki.
John Kerry, America’s Secretary of State, finished
his two-day tour of the country Tuesday while the US President, whose
biological roots are in Kenya, is expected in the country in July.
Mr Kerry’s comments were largely confined to the
fight against terrorism but Kenya has indicated it will be pushing for
the introduction of direct flights between Nairobi and Washington during
the visit by Mr Obama to boost trade between the two states.
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