In Summary
  • The collapse of the coffee industry under the weight of mismanagement and debt, is one of the saddest stories of export performance.
  • Other markets, including the Middle East, United States and Asia remain untapped.
  • Increasing output and deepening value chains will increase farm incomes and improve opportunities, contributing to regional growth and equity.

The export sector is a drag on the economy, essentially by failing to provide sufficient foreign exchange to cover financial obligations, including imports and debt payments.

While imports continue to expand in leaps and bounds, exports increase at a snail’s pace, causing ever-increasing trade and balance of payments deficits.

Statistics for 2016 indicate that while Kenya exported goods valued at $5.7 billion, imports were $14 billion.

This imbalance imposes a serious constraint to economic growth. The National Trade Policy launched in July is supposed to address this problem.

The policy being implemented by the Ministry of Industry, Trade and Cooperatives focuses on transformative action, including diversifying the export base, improving value chains and penetrating new markets.

It’s a tall order given the high rate of import growth relative to the marginal increase in export value.

BALANCE

Exports need to grow at 14 per cent a year to 2030 for a better balance to be achieved, according to Mr Jaswinder Bedi, the chairman of the Export Promotion Council.

Stakeholders at an export forum hosted by the EPC last Friday, had a litany of issues, ranging from cost and low productivity to poor incentives, that they want the government to resolve.

The export sector crisis is not just about the scale of the import-export balance and foreign exchange crisis.

The Kenya National Bureau of Statistics report for the second quarter of this year shows that imports expanded at 15.5 per cent, while exports grew by 2.9 per cent.

PERFORMANCE

The export base is built around five major products, which account for nearly 60 per cent of the total value.

They include tea and horticulture, which account for 40 per cent of the value, petroleum re-exports, apparel and clothing, and coffee.

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