US beats Africa to third spot on list of Kenya import source

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.

READ: Uhuru and Kerry hold talks on security, Obama visit

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.