African markets

Increase in Kenya’s share of exports to African markets

Columnists

Increase in Kenya’s share of exports to African markets


An Empire Kenya tea worker packing for auction and export in this photo taken August 5, 2020. PHOTO | LABAN WALLOGA | NMG

Kenya is set to outrun the waves of the Covid-19 pandemic in terms of economic recovery, according to the 23rd edition of Kenya Economic Update recently launched by the World Bank. The 2022 Economic Survey shows that Kenya’s real GDP grew by around 7.5% in 2021, compared to a contraction of 0.3% achieved in the previous year.

There has been a gradual normalization of economic activity in most sectors, including manufacturing and exports. Facing a weaker global economy due to the effects of the pandemic, Kenya has shown signs of resilience in most sectors. Total exports in 2021 increased to 743.7 billion shillings from 643.7 billion shillings in 2020, an increase of 15.5%.

Kenya’s main exports are flowers, coffee, tea, fruits, vegetables and textiles. Others are leather and footwear, metal and related products, chemicals and related products, pharmaceutical and medical equipment, plastics and rubber, light engineering, automotive parts and furniture.

Kenya also exports considerable professional services globally, including nurses, doctors, social workers, teachers, engineers, architects, economists, financial analysts, accountants, software developers and scientists. We also export financial and transportation services.

Export markets where Kenya’s exports have grown, according to the Export Performance Report 2021, include Uganda (6.9 billion shillings), Tanzania (5.5 billion shillings), Rwanda ( 3.5 billion shillings), Pakistan (3.3 billion shillings), China (3.2 billion shillings), the United Arab Emirates (2.6 billion shillings), the United States (2. 0 billion shillings) and the Netherlands (1.2 billion shillings).

To increase and improve export trade, the Ministry of Industrialization, Trade and Enterprise Development and its key agencies such as the Kenya Export and Promotion Agency are implementing the National Integrated Development Strategy and export promotion to help our micro, small and medium enterprises across the country innovate and realize its potential in new value chains and new products.

The move also aims to reduce the trade balance deficit through an envisaged export growth rate of 25% by the end of this year and 10% year-on-year by 2030, as projected by Vision 2030.

The Kenya Export Promotion and Promotion Agency seeks to contribute to this objective by diversifying Kenya’s export products and markets, as outlined in its three-year strategic plan.

For all commercial agreements concluded, we are keen to develop implementation strategies.

The Ministry has also developed an AfCFTA Implementation and Communication Strategy to ensure that the national AfCFTA implementation strategy in Kenya, among other aspects, increases the country’s GDP, overall exports and exports to all African sub-regions and stimulates manufacturing.

In 2021, Kenya’s exports to GDP stood at 10.57%, which is 0.93% higher than the contribution of exports to GDP in 2021 (9.64%).

One of the main obstacles to our export performance is the question of the quality and price of our products. Consumers in our target market are sensitive to quality and price.

We therefore need to refine our products and ensure that they meet international standards in terms of quality in order to survive the tough competition in the global market.

Sanitary and Phytosanitary (SPS) measures and standards aim to ensure consumer protection and confidence in domestic and imported food and feed.

To effectively facilitate trade and reduce the balance of trade between countries, Kenya has joined various SPS-related frameworks that further domesticate the SPS Agreement, including the African Continental Free Trade Area (AfCFTA), the Tripartite EAC-COMESA -SADC, COMESA, EAC and a few. bilateral agreements such as EAC-EU-EPA.

Kenya is therefore keen to continue knowledge sharing and technology transfer in laboratory testing, inspections, agricultural and seed production methods, agricultural processing and value addition and treatments in agriculture sectors. and food.

All actors, including firms producing for domestic markets as well as export markets and domestic consumers and consumers in export markets, will benefit.

In addition to high standards in international markets, market access issues, fierce market competition and high cost of doing business are also challenges.

The Kenya Export Promotion and Branding Agency engages partners in Uganda, Tanzania and Ethiopia to understand and mitigate the challenges of trading across borders and transiting to hinterland economies. country.

We also engage in market-specific research to isolate market access opportunities and conditions. Some of the products that Kenya can produce efficiently and have demand in Africa include medicines, plastic and paper containers, semi-finished gold, and pre-fabricated buildings.

In addition, the Ministry of Industrialization, Trade and Enterprise Development is responsible for formulating and implementing policies that are expected to contribute to the achievement of national goals aligned with employment and wealth creation.

This is done by offering fiscal support by establishing the MSE Development Fund, which will provide affordable credit facilities to MSMEs.

Once this fund is operational, it should provide affordable and accessible credit to MSEs as well as finance promotion and development, capacity building, research, innovation and technology transfer in the MSE sector.

As an agency, we are keen to work with partners like Afri-Exim Bank and other business-focused facilitators to support export and import finance facility to catalyze availability and access to export trade financing.

Dr Marube is the CEO of Kenya Export Promotion and Branding Agency