PUBLISHED ON November 6th, 2014

China topples India as main exporter to Kenya

China has overtaken India to become Kenya’s top source of imported goods, newly released data show.

The world’s most populous nation grew its exports to Kenya by 37.9 per cent to Sh178.6 billion in the first nine months of this year or 14.8 per cent of Kenya’s total imports, according to data from the Kenya National Bureau of Statistics (KNBS).

That growth allowed China to topple India from the position it has occupied for the past three years.

The KNBS data show that India’s share of Kenya’s total imports of Sh1.2 trillion in the nine months dropped to 13.8 per cent, with a slower growth of 4.4 per cent in the value of its merchandise to Sh166.3 billion.

The quarter three data also captures the falling fortunes of the United Arab Emirates given that the Middle East nation had also been a top source of imports.

It has now been relegated to position four behind the US, which has aggressively increased exports to Kenya since April.

Imports from the US including planes, energy equipment and health kits stood at Sh120 billion compared to UAE’s Sh79.9 billion.

The relegation of UAE has been linked to a decline in Kenya’s intake of petroleum products that form the bulk of Abu Dhabi’s exports and traders’ shift to Turkey and China as source of goods from Dubai.

China’s rise is expected to intensify its battle with its Asian rival India that has recently made major inroads into Kenya with big-ticket contracts in healthcare and energy sectors.

Kenya mainly imports textiles, pharmaceuticals, industrial machinery, vehicles, electronic, motorcycles, tuk tuks and semi-processed goods from India.

Key items imported from China include heavy machinery, electronics, vehicles, textiles and a range of household goods.

The two Asian nations entrenched their presence in country with intense economic diplomacy that started with President Mwai Kibaki’s election in 2002.

The rivalry has benefited Kenya in terms of foreign direct investments, a wider variety of consumer goods and opened new sources of technical and financial assistance.

Though the India-China rivalry has played out as a battle of the Asian giants, the biggest losers have been the traditional Western trading partners such as Britain whose share of the Kenyan market has been steadily declining.

India’s Exim Bank has, for instance, helped Indian companies export cement and sugar to Kenya with the provision of guarantees or letters of credit through PTA Bank.

China, the biggest beneficiary of Kenya’s massive infrastructure projects, has also been expanding its reach to broadcasting, telecoms, textiles and the general consumer goods markets.

Over the past decade, Chinese firms have won contracts to build some of the largest infrastructure projects in Kenya, including the upgrade of Thika Road at a cost of Sh27 billion and Sh447 billion construction of the new Mombasa-Nairobi railway.

Though the two Asian powers have realised steady growth of their exports to Kenya, Nairobi has only marginally expanded the value of trade with them, resulting in a huge trade imbalance.

This is because Kenya’s commercial engagement with the Asian nations is mainly pegged on low-value primary commodities like tea, coffee and hides.

Source:: Business Daily

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