Kenya imports from South Africa drop to 12-year low

A consignment of heavy steel is transported by rail from Mombasa. Kenya has signed an agreement with a Chinese company to develop a steel plant. PHOTO | FILE

By CONSTANT MUNDA
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Kenya’s imports from South Africa slid to a 12-year low largely on reduced orders for iron and steel products amid a slowdown in public expenditure on infrastructure.

The value of goods ordered from Africa’s most developed economy contracted 35.81 percent to Sh47.52 billion ($ 432 million), according to provisional trade data from the Kenya Revenue Authority (KRA) shared with the Central Bank of Kenya (CBK).

The Kenya National Bureau of Statistics (KNBS) had in an email late last year attributed the shrinking import bill for South Africa to a reduction in orders for steel and iron products which make up about a half of the purchases.

Kenya slowed down expenditure on infrastructure projects last year as dwindling revenue were concentrated on projects aimed at alleviating the devastating impact of the Covid-19 pandemic.

Latest exchequer statistics, for example, shows development expenditure on infrastructure for nine months through March 2021 amounted to Sh20.22 billion, a 60.15 per cent drop compared with Sh50.74 billion in prior fiscal year.

South Africa — which only emerged from the longest recession in 28 years in the quarter ended September 2020 — is Kenya’s largest source market in Africa, accounting about of a third of the imports on average in recent years.

The imports plunge from Africa’s second-largest economy after Nigeria consequently cut Kenya’s import bill for African market by 24.43 per cent to Sh172.91 billion in 2020, according to the data collated by the CBK.

This was the lowest value of goods purchased on the continent since Sh140.13 billion in 2016.

Kenya’s imports from the rest of African countries accounted for 10.53 per cent of estimated Sh1.64 trillion total order book in 2020, slightly reduced from 12.71 per cent a year earlier.

Earnings from exports to Africa, on the other hand, rose 9.07 per cent to Sh243.68 billion, making up 38 per cent of Sh641.21 billion total exports, slightly increased from 37.5 percent share of Sh595.38 billion in prior year.