Numbers that dispute DP Gachagua's claim on Kenya's forex reserves

Forex reserves are critical since they are used to meet import needs. Kenya's import bill has been growing, crossing Sh2 trillion-mark last year especially on weakening of the shilling and rising cost of fuel and food imports.

Between January and March 2022, Kenya's import bill was Sh593.2 billion, data from the Kenya National Bureau of Statistics shows. This means the country was spending about Sh197.73 billion every month on imports.

Assuming the Sh197.73 billion average remains the same, Kenya's needs for four months is Sh790.8 billion-equivalent to $6.55 billion-which is above the current forex reserves of $7.42 billion.

Exports also offer support to Kenya's dollar reserves. However, exports have not been growing as fast as desired given the lack of value addition and narrow markets.

The shilling has lost 9.34 per cent to the dollar in the 12 months to the end of September 2022 increasing costs of imports and debt serving.

Since the first case of Covid-19 mid-March 2020, the shilling has weakened by 19.8 per cent to the dollar. Mean exchange rate was 120.81 units on October 5, 2022, against 100.79 in February 2020.