Kenya’s EAC exports hit six-year high after trade rows ease

Photo: Asoko Insight

Kenya’s exports to top markets within the six-nation East African Community (EAC) bloc jumped to a six-year high in 2019 on the back of easing trade tensions, provisional data shows.

Earnings from goods sold to Uganda, Tanzania and Rwanda increased by nearly Sh11.01 billion, or 10.06 percent, in the January-December 2019 period to hit Sh120.43 billion.

This is the highest income from goods sold in the three regional markets since Sh120.68 billion was earned in 2013, according to latest statistics collated by the Central Bank of Kenya (CBK).

The value of exports to Rwanda accelerated at the fastest pace of 29.95 percent (or Sh5.34 billion) to touch a fresh record of nearly Sh23.18 billion.

Orders from Tanzania climbed Sh3.87 billion, or 13.03 percent, to close the year on Sh33.61 billion – the highest value since protectionist President John Magufuli’s first full-year in office (In 2016, they stood at Sh34.80 billion).

Uganda – Nairobi’s largest trade partner accounting for more than half of regional exports’ earnings bought goods worth Sh63.65 billion. This represents a 2.90 percent growth over Sh61.86 billion in 2018, and is the highest income by Kenyan traders for exports to the landlocked country since 2015 when the value was captured at Sh68.41 billion.

Kenyan factories have in recent years struggled to grow exports in key regional markets largely due to tariff and non-tariff barriers fuelled by mistrust and long-standing trade disputes, particularly with Tanzania and, in some cases, Uganda.

Manufacturers, accused of under-investment in new technology leading to rising inefficiencies, have blamed multiple fees and levies and high electricity charges for piling up the cost of production.

That has made locally-made goods expensive in regional markets, pushing neighbouring countries to continually substitute Kenyan products with their own.

The ministries of Trade and EAC Affairs last year intensified talks with their counterparts in Tanzania and Uganda to finding a long-lasting solution to on-and-off disputes that usually hit Kenyan products such as confectionery, textiles and cement.

“We now see that trade is coming in true spirit of an economic community. There’s definite progress, although there will always be teething problems on some of emerging issues. But for now the trend and direction is good and we are grateful for the intervention by Kenya,” Kenya Association of Manufacturers (KAM) chairman Sachen Gudka said in an interview last October.

“The Kenyan team has done a very commendable job in working with the EAC secretariat in bringing both tariff and non-tariff barriers down, and we are also seeing very concerted efforts also on the part of Tanzania to bring these barriers down.”

President Uhuru Kenyatta met his Tanzanian counterpart in July 2019 where talks to improve trade ties featured although the primary agenda was to lobby the southern neighbour to back Kenya’s bid for a seat at the UN Security Council.

Kenya’s High Commissioner to Tanzania Dan Kazungu said in August that talks between the two countries had helped eliminate 25 of the 37 tariff and non-tariff barriers (15 on Kenya side and 22 on Tanzania’s) by April.

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