Kenya’s exports to its key markets dropped in the first half of the year, widening the current account deficit by a further $125 million, to $3.16 billion.

Data from the Kenya National Bureau of Statistics (KNBS) shows that the country’s exports to Tanzania, the Netherlands, Egypt, Germany, the US and France dropped significantly compared with the same period last year.

On the other hand, the country’s imports from China have grown by 50 per cent to $1.5 billion, from $1 billion over the same period last year.

Exports to Tanzania have fallen for the third consecutive year, according to Kenya’s Export Promotion Council. Kenya’s exports to Tanzania include margarine, palm oil and its fractions, flat rolled products of iron, soap, vegetable fats, sugar, confectionery and household items.

Kenya had also hoped that the sharp fall in oil prices would reduce its current account deficit in 2015, which had been widened by weak tourism receipts, but that has not proved the case.

From the KNBS data, the country has increased its oil imports from Saudi Arabia to $339 million, up from $220.2 million over the first six months of 2014.

Mercyline Gatebi, a financial analyst at Genghis Capital, said Kenya had hoped that low energy prices and the rise in economic diversification would help to narrow the shortfall over the medium term.

“What we have seen is the country increasing the volumes of its oil imports, and of machinery from China, to service the capital projects that Kenya is engaged in. This explains the rise in the import bill from China,” Ms Gatebi said.

Of interest, however, is the drop in imports from the United Arab Emirates from $515.1 million in the first half of 2014, to $374.2 million over the same period this year.

Kenya used to source more than 50 per cent of its petroleum products from the UAE, but Saudi Arabia has replaced it as Kenya’s net oil importing partner. Other imports from Saudi Arabia include crude oil, bitumen and petroleum products.

There has been a reduction in crude oil imports following the closure of Kenya Petroleum Refineries Ltd (KPRL) in 2013.

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China has now overtaken India as the country’s largest net importing partner. The country is the biggest beneficiary of Kenya’s massive infrastructure projects.

Kenya’s imports from India dropped marginally to $1.30 billion in the first six months of the year, from $1.31 billion over the same period last year. Imports from India include textiles, pharmaceuticals, industrial machinery, vehicles, electronic and semi-processed goods.

Countries like South Africa, France, the UK and Japan have seen their exports to the country drop.

In September last year, a Parliamentary Budget Office (PBO) report projected that the export market would grow by 7.1 per cent in the 2015/16 financial year, before slowing down to 5.1 per cent in the 2016/17 year.

“The projected decline is attributed to the increased cost of doing business relative to competitors, the declining contribution of the manufacturing sector to GDP, lower-than-expected tourist arrivals, slow growth in productivity in the private and agriculture sectors, and declining competitiveness of exports,” the report said.

Another factor that seems to have affected the exports market is the stalemate over the Economic Partnership Agreement with the European Union and the uncertainties that surrounded the renewal of the Africa Growth and Opportunity Act between Kenya and the US.

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Trade and development manager at the Kenya National Chamber of Commerce Peter Biwott said the stalemate between the regional economies and the European Union was expected to negatively impact the export market.

“The figures show that these uncertainties hurt the export market. We have seen a big drop in these markets,” Mr Biwott said.