Kenya’s import bill rises by record Sh500 billion in a year

Kenya’s import bill widened by Sh504.7 billion last year on increased demand for foreign manufactured goods and higher crude oil prices, widening the trade deficit.

Data from the Kenya Revenue Authority (KRA) published yesterday by the Kenya National Bureau of Statistics (KNBS) shows imports rose 30.7 per cent to Sh2.146 trillion from Sh1.642 trillion in 2020.

The Sh504.7 billion rise in import bill is one of the fastest in a single year for the country and worsened the trade deficit during the period in which exports rose at half the pace of imports.

Exports rose by 15.2 per cent, or Sh97.76 billion, to Sh738.97 billion, sending the country’s trade deficit — the difference between imports and exports — to a record Sh1.4 trillion.

The latest import bill bucks the trend in 2019 and 2020, where imports had dropped and exports increased, cutting the trade deficit to Sh1 trillion in the latter year.

The Sh504.7 billion rise in the import bill in a single year beats the Sh293.3 billion rise that was set in 2017 when the bill closed the year at Sh1.725 trillion.

Kenya has, for instance, had to step up food imports on the back of a ravaging drought that has put about 2.1 million Kenyans at risk of starvation, according to authorities.

The increased risk of starvation was triggered by poor and delayed rains, especially in northern parts of the country, including Turkana, Marsabit, Mandera, Garissa, Wajir, Kilifi, Tana River, Lamu, Samburu, Kitui, Isiolo, Laikipia and Baringo counties.

Part of the import bill pressure for last year was brought about by coronavirus-induced global supply chains disruptions, which have hiked shipping expenses.

Increased freight charges in an environment of rising global oil prices and raw materials for food and non-food items has put pressure on the import bill.

The import bill for December 2021 hit a record high of Sh235.23 billion from Sh191.81 billion in November of the same year.

KNBS data shows non-food industrial supplies was the main import category in December, taking up 32.75 per cent of the import bill.

Fuel and lubricants, machinery and other capital equipment and transport equipment accounted for 17.59 per cent, 25.69 per cent and 8.33 per cent of the total value of imports respectively. 

Data on major origins of imports showed China, the leading exporter to Kenya, increased its exports by 22 per cent or Sh80 billion to Sh441.4 billion.

Kenya’s imports from India increased 22 per cent to Sh231 billion, while those from the United Arabs Emirates (UAE) rose the fastest (93 per cent) to hit Sh178.8 billion.

Saudi Arabia’s exports to Kenya grew by 60.5 per cent to Sh114.6 billion as those from the US hit Sh84.2 billion, marking a 49.6 per cent growth.

A widened trade deficit is a concern for Kenya’s forex position, with importers drawing out valuable dollars at a time the shilling is facing pressure.