After the difference between Kenya imports and exports reached a value of more than Sh1.3 trillion, the country's measures to reduce its growing trade imbalance have been unable to halt the trend. This comes after the cost of importing fuel, food, and industrial raw materials caused Kenya's goods trade imbalance to increase by about a quarter during the first 10 months of the year, harming youth employment prospects and placing pressure on the shilling. In this blog we will discuss on How Kenya Import Export Data grows to sh1.137 Trillion.
According to the Kenya Imports Data, Kenya's efforts to lessen its expanding trade imbalance have been unsuccessful after the disparity between its imports and exports hit a value of more than Sh1.3 trillion. This comes after Kenya's goods trade imbalance increased by roughly a quarter during the first 10 months of the year due to the high cost of importing fuel, food, and industrial raw materials, damaging young people's employment prospects and putting pressure on the shilling.
Due to interruptions in global supply networks that increased the cost of importing products, the trade deficit—the difference between Kenya Import Export Data—rose to Sh1.37 trillion from Sh1.11 trillion in the previous year.
The merchandise trade gap increased by 23.09 percent, or Sh256.60 billion, at a time when traders had to contend with skyrocketing shipping costs and a shortage of dollars because of an imbalance between supply and demand.
Early in the year, record prices for basic goods like steel, paper, wheat, edible oil, and petroleum items were reached due to Covid-caused disruptions in global supply chains, which were created by Russia's invasion of Ukraine in February.
The cost of fuel, industrial supplies, and food were the main drivers of import expenditure for the 10-month period, according to the most recent official data compiled by the Kenya Trade Data.
Further, the Kenya Imports cost increased by 21.89% year over year to around Sh2.10 trillion during the review period, outpacing the 19.69% growth in export revenue to Sh728.2 billion.
According to Kenya Trade Data, a continually larger trade deficit hinders the creation of jobs for the growing pool of talented youth because much of the money earned in Kenya is used to purchase goods from other nations, increasing output and job opportunities in source markets. The shilling is under pressure due to an expanding import-export gap as well as an excess demand for dollars.
For instance, the shilling has lost 8.76% of its value against the US dollar so far this year to an average of 123.05 units, primarily as a result of more demand than supply for the dollar.
Kenya has struggled to reduce its goods trade imbalance over the years in part because it relies heavily on exports of farm products like tea, horticulture, and coffee, which are typically supplied in raw form and fetch relatively lower prices.
Due to increased taxes imposed on semi-processed or processed goods in countries like Europe, the majority of Kenyan traders export raw production out of concern that value addition would reduce exports' ability to compete on international markets.
According to Kenya Trades, Kenyan products compete with products from all over the world and, consequently, we need as a country and even at factory level to be globally competitive.
Even having duty-free access to the US market, we are still 15 to 20% more expensive than our rivals in Central Asia, like Bangladesh and Sri Lanka. If you find some of the things that we trade like clothes. The reason is that Kenya has very high manufacturing costs due to the high cost of labour, water, and power.
According to the trade data, increasing shipping costs for petroleum items helped imports, while lower cut flower sales hindered export growth.
In the last 10 months, spending on fuel and lubricants increased 89.26% to Sh553.29 billion, underscoring the record-high cost of fuel that compelled the previous administration to institute fuel subsidies in an effort to contain inflation According to the Kenya Import Data,.
For instance, the fuel price stabilisation programme cost taxpayers Sh 81 billion in the fiscal year that ended in June 2022, underscoring the negative effect of the intervention on the nation's revenue.
In order to prevent heavy blows to the cost of life, President William Ruto's administration removed the covers off super gasoline in September due to the hefty cost of subsidies, but it has subsequently kept them on diesel and kerosene.
In October, global diesel prices reached record highs, costing 70% more than they did a year earlier; despite their relative difference to the price of crude is 425 per cent higher by Kenya Trades
Due to increased taxes imposed on semi-processed or processed goods in countries like Europe, the majority of Kenyan traders export raw production out of concern that value addition would reduce exports' ability to compete on international markets.
According to Kenya Association of Manufacturers CEO Antony Mwangi, "Kenyan products compete with products from all over the world and, consequently, we need as a country and even at factory level to be globally competitive."
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