Kenya's trade deficit widens as imports increase
07 January 2015, 10:02
Nairobi - The deficit in Kenya's balance of trade has widened considerably as imports accelerate to 1.8 billion U.S. dollars a month, according to new economic data.
On the contrary, the East African nation's exports have shrunk to 450 million dollars as outflows from tea, coffee and horticulture stagnate.
The data from Kenya National Bureau of Statistics (KNBS) for the period ending September last year indicate that the trade deficit has widened, as the country imports more machinery and industrial supplies.
In September, Kenya's non-food industrial supplies imports stood at 427 million dollars, according to the data received from the government agency on Tuesday.
While this was a drop from 454 million dollars the previous month, the category maintained its grip at the top, contributing heavily to the 1.8 billion dollars bill.
Machinery and other capital equipment imports came in second at 401 million dollars. This was a significant surge from the previous month's 258 million dollars.
The category, according to KNBS, was responsible for the surge in Kenya's import bill during the month with the 122-million swell.
Fuel and lubricants took the third slot in Kenya's top imports, amounting in September to 380 million dollars, up from 320 million dollars.
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"Industrial supplies (non-food) was the main import category with a share of 24.03 percent, while the values of fuel and lubricants, machinery and other capital equipment and transport equipment were 21.37, 22.57 and 18.35 percent respectively," noted KNBS in the data contained in the monthly Leading Economic Indicators report.
As of September, Kenya's imports have stood at 13.3 billion dollars, against exports of 4.5 billion dollars.
The imports in 2014 are likely to go past the 15-billion-dollar mark as exports stand at about 6 billion dollars.
In September, the month in review, Kenya's main exports were food and beverages, the value standing at 170 million dollars, down from 179 million dollar the previous month.
The category was followed by consumer goods whose value during the month was 122 million dollars, up from 105 million dollars in August.
The third largest exports were the industrial suppliers which totalled 111 million dollars, a drop from 125 million dollars.
"Food and beverages accounted for 40.4 percent of the exports during the month, while the value of non-food industrial supplies and consumer goods registered 26.5 and 29.0 percent shares, respectively," noted KNBS.
Kenya is mainly an imports economy with the country's top sources of goods from India, China and the United States.
Analysts note that the faster rise in imports amid drop in exports has shrunk the country's foreign exchange reserves, contributing to the weakening of the Kenya Shilling that is currently exchanging at about 90 against the dollar, down from 86.
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