NAIROBI: Kenya’s exports to Uganda in July more than doubled, underscoring the latter’s position as the country’s key destination of goods.
New economic data from Kenya National Bureau of Statistics (KNBS) show that East Africa’s biggest economy exported goods worth over 90 million U.S. dollars to Uganda in July, from 44 million dollars in June. It is the first time in trade relations between the two nations that Kenya has exported goods worth that much in a month to Uganda.
Kenya’s exports to the country have been averaging 43 million dollars a month since the year began and 33 million dollars in the past years. The surge, therefore, is an indication of how crucial Uganda is to Kenya as a trading partner in the East African community.
Uganda imports from Kenya livestock products, in particular meat and milk, an assortment of manufactured goods, fuel through the port of Mombasa, cement, steel bars, common salt and beer. In the first half of this year, Kenya’s exports to Uganda totalled 253.5 million dollars, a rise from 238 million dollars during a similar period last year.
Last year, the country’s exports to Uganda stood at over 578 million dollars, a drop from 622 million dollars in 2013. On the other hand, Uganda exported to Kenya goods worth 171 million dollars in 2014, up from 152 million dollars.
While Uganda’s exports to Kenya, which mainly consist of agricultural produce, have been consistently rising in the last five years, Kenya’s to the country have been dropping. However, the balance of trade between the two countries favours Kenya significantly.
It is for the two reasons that Kenyan President Uhuru Kenyatta last month travelled to Uganda and discussed with his counterpart Yoweri Museveni on how to correct the imbalance.
In the agreement, Uganda was to export sugar to Kenya since it is estimated that the country has a surplus of 26,000 tonnes, which is only about 17 per cent of its neighbours annual sugar imports that now stand at an average of 149,000 tonnes a year.
The deal, however, raised political storm in Kenya, with leaders particularly from the Opposition Cord, dismissing it, arguing that it would kill the sugar sector in the East African region. Kenya’s total food exports to Uganda, including beef, rose to a record 15 million dollars in 2013, having grown steadily from a paltry 123,809 dollars in 2009.
Analysts note that Kenya has been keen on increasing its exports to the western neighbour to boost its income as overall export earnings, especially from tea, horticulture, coffee and tourism, fall amid surge in imports. Low earnings from the key sectors have seen the country’s foreign exchange reserves drop, making it hard for the Central Bank to cushion the weakening shilling.
The shilling has weakened to a three-year low, exchanging at 105 against the U.S. dollar as foreign exchange reserves shrink to 6.4 billion dollars or 3.9 months of import cover, according to the Central Bank.
