Kenya has lost about Sh20 billion in export value in the first 10 months of this year, cutting the country’s prospects for the much-needed forex inflow necessary to cushion the shrinking shilling against major currencies.

This is amid a challenging domestic economic environment marred with high production costs owing to high taxes and energy prices that have forced businesses to slash production output while struggling to price their products competitively in the external market.

Difficult economic

Data from Kenya Revenue Authority (KRA) compiled by Central Bank of Kenya (CBK) shows that between January and October 2023, exports dipped to $6.1 billion (Sh933 billion). About $6.23 billion (Sh953 billion) had been exported in a similar period previously in 2022, representing a 2.1 per cent or Sh20 billion decline.

On average, it means Kenya lost Sh2 billion in exports every month and might struggle to hit $7.42 billion (Sh1.14 trillion) in export levels realised by December 2022.

Animal and vegetable oils, clothing accessories, and coffee were the hardest hit as they recorded the sharpest declines by the end of October 2023.

Vegetable oils reduced export levels by 31.8 per cent to Sh17.3 billion at a time when the country witnessed an acute shortage that triggered a price increase.

Exports of clothing accessories like bracelets, necklaces, shawls, and bonnets export volumes narrowed by 21.1 per cent in those 10 months to Sh40.7 billion, slightly above half the volume achieved in the 2022 full year.

Coffee and tea – Kenya’s major source of foreign exchange under the agriculture sector – also slumped in export volumes by 17.4 per cent and 1.4 per cent, respectively. Receipts from coffee and its substitutes reached Sh37.6 billion between January and October 2023, while that of tea was Sh171.36 billion.

Other products that declined in export were beverages and tobacco, crude materials, and miscellaneous manufactured articles.

“There are only a few increases in exports. More significantly, the medical and pharmaceutical exports which increased by 20.3 per cent for the first ten months of this year.

“The iron and steel have increased by 4.4 per cent,” CBK Governor Kamau Thugge (pictured) said yesterday in the post-Monetary Policy Committee (MPC) briefing.

“The increase in manufactured export receipts reflects strong regional demand,” stated CBK.