PUBLISHED ON February 25th, 2015

Kenya exports to EAC likely to dip further

The slide in Kenya’s exports to the East African Community is likely to continue in the near-to-medium term as neighbouring countries industrialise faster, according to the Kenya Association of Manufacturers.

Chief executive Betty Maina told the Star on Friday that some of the products that Kenya used to export to Uganda, Rwanda and Tanzania are now being produced locally or being sourced from elsewhere at cheaper prices.

She cited China and India as among countries that have eaten into Kenya’s share of the five-nation EAC market.

Hardest hit products include those that are paper-based or sugar-based [such as confectioneries], Maina said.

An analysis of official data has shown that Kenya’s sales to the neighbouring countries have been dwindling over the last four years, ironical to the noises around EAC integration that have been growing louder and louder over the same period.

The value of sales to Uganda, Tanzania and Rwanda in 11 months to November last year dropped to Sh85.95 billion, a 21.1 per cent decline from Sh108.93 billion over the same period in 2011.

“These countries are industrialising and as they do so, they replace imports, majority of which were coming from Kenya,” Maina said.

“The other thing is that we have also been replaced in those markets by Indian and Chinese goods.”

She said there was a growing trend in imports from the two countries into the region including Kenya “partly because of our own rigidities in the Kenyan market, as well as blockages in accessing the East African markets”.

For the 11-month period to last November, Kenya bought goods worth Sh238.49 billion from India and Sh222.33 billion from China, a growth of 6.5 per cent and 34.2 per cent respectively over the previous year, Kenya National Bureau of Statistics data show.

Continued influx of goods from the two Asian countries into the region, KAM said, is replacing some of the locally produced goods thus hurting intra-EAC trade.

Kenya’s sales to Uganda, traditionally its largest export market, have slumped the most over the last four years, dipping by 29.1 per cent to Sh43.31 billion by end of November, from Sh61.08 billion in a corresponding period in 2011.

Sales to Tanzania went down by 11.3 per cent to Sh32.24 billion from Sh36.36 billion over the same period, while Rwanda’s purchases from Kenya dipped by 9.5 per cent to Sh10.40 billion in 2014, from Sh11.49 billion four years ago.

“In my view, they have industrialised, but they have also had severe blockages – more so the NTBs (Non-Tariff Barriers), while re-introduction of duties has also been severe,” Maina said.

Source: The Star

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