Uganda overtakes South Africa in Kenya exports

Monday February 5 2018

Bananas from Uganda outside the main market in

Bananas from Uganda outside the main market in Eldoret in Uasin Gishu County. Trade between countries remains low. FILE PHOTO | NATION 

By BUSINESS DAILY
More by this Author

Uganda overtook South Africa for the first time in November as the largest source of goods ordered by Kenyans, underlining the impact of drought which saw electricity and food imports shoot up.

Kenya’s monthly import bill from Uganda jumped more than two-fold to Ksh7.59 billion ($74.6 million) compared with Ksh2.93 billion ($28.8 million) in October, marking the highest ever recorded monthly imports value from the land-locked country.

Goods from South Africa stood at Ksh4.60 billion ($45.2 million), a 5.66 per cent drop compared with October’s value.

However, the Central Bank of Kenya data did not give reasons for the spike in the value of imports from Uganda.

Kenya largely buys foodstuffs, especially cereals, and electricity from the west-neighbouring country, its biggest trading partner.

Biting drought

A biting drought, which started toward the end of 2016 through the first half of 2017, left at least 1.3 million people in need of food aid and drove down water levels in dams, ultimately hitting hydro power generation.

Uganda has been exporting electricity to Kenya in bulk under an agreement signed during colonial times, but renegotiated at Uganda’s insistence in 1997, through a direct electricity transmission line connecting from Tororo.

Poor weather also forced Kenya to buy food such as maize, rice, sugar and milk powder to meet local demand and ease rising prices.

During the first 11 months of last year, food imports more than doubled to Ksh223.86 billion ($2.2 billion), representing a spike of 124.15 per cent.

That helped drive up Kenya’s trade deficit — the gap between imports and exports —  to more than a Ksh1 trillion ($9,8 billion) mark for the first time.

Imports from Uganda in the January-November period doubled to Ksh35.08 billion ($34.8 million) from Ksh17.75 billion ($174.4 million) in the same period in 2016, leapfrogging Egypt to become the second importer of goods to Kenya in Africa. 

Biggest seller

South Africa, however, remained the biggest seller of goods to Kenya in the continent in the period at Ksh57.70 billion ($567.1 million), a growth of 28.31 per cent year-on-year.

South Africa sells to Nairobi goods such as wines and other alcoholic drinks, cars as well as spare parts, oil lubricants and machinery.

The value of goods shipped in from Egypt in the 11-month period also rose by a fifth to Ksh32.50 billion ($319.5 million), while Tanzanian traders trucked in goods valued at Ksh15.18 billion ($149.2 million) which is 29.22 per cent more than the year before.

Overall, Kenya imported goods worth Ksh180.24 billion ($1.7 billion) from Africa in the 11-month period, Ksh53.96 billion ($530.4 million) more than a year earlier, the CBK data shows.

Global imports into Kenya grew by Ksh274.02 billion ($2.6 billion), or 20.93 per cent, to Ksh1.58 trillion ($15.5 billion) in the period, while exports rose a measly 3.37 per cent to Ksh549.18 billion ($5.4 billion).

Nearly half of the growth in imports (45.31 per cent) was food.

Machinery, nonetheless, accounted for the largest share of the imports at Ksh449.48 billion ($4.4 billion), an 11.71 per cent growth from Ksh402.35 billion ($3.9 billion) in first 11 months of 2016.

Related stories

Advertisement