Kenya has for the first time imported more goods than it sold to its neighbour Uganda in the five months to May, mainly due to increased maize imports.
Central Bank of Kenya (CBK) put the value of goods Kenya imported from Uganda at Sh30.21 billion in the period to May compared exports of Sh26.08 billion, resulting in a trade deficit of Sh4.13 billion.
This is the first-ever trade deficit that Kenya has recorded against Uganda since the central bank started making trade numbers public.
Kenya’s import bill from Uganda jumped nearly three times in the review period from Sh11.99 billion in the same period last year, the CBK data shows.
Poor weather has seen Kenya increasingly rely on Uganda for its food needs, especially the staple maize and groundnuts
Uganda accounted for 70.36 per cent of the nearly 419,548 tonnes of maize imports, an equivalent of about 4.66 million 90-kg bags, in the five months to May, Kenya Revenue Authority data show.
Traders trucked in about 3.28 million bags of cheaper maize from Uganda during the period, the taxman report to the parliamentary departmental Committee on Agriculture and Livestock showed.
The committee, chaired by Mandera South MP Adan Haji, was investigating the irregular purchase of maize by the National Cereals and Produce Board from traders earlier in the year, which has left farmers in the food-basket the North Rift region stuck with stocks of the staple commodity in stores.
Kampala, the CBK data shows, accounted for 32.88 per cent of the Sh91.88 billion that Nairobi paid out to African countries for goods ordered.
Uganda overtook South Africa as the largest seller of goods to Kenya in Africa in the review period with the latter’s invoice expanding a slower 17.07 per cent to nearly Sh28.37 billion compared with a year earlier.
Exports to Uganda, traditionally the largest buyer of Kenyan goods, has been falling marginally in recent years partly due to import substitution as more factories spring up in Kampala, cutting off supplies from Nairobi.
Uganda, which was last year dethroned by Pakistan as a top exports destination, was also overtaken by the Netherlands whose order book is largely made of cut flowers in the January-May period.
Last year, exports to Uganda fell to Sh61.82 billion from Sh62.17 billion in 2016 and Sh68.41 billion in 2015, the statistics show.
Manufacturers have long blamed multiple fees and levies, relatively high power charges and inefficiencies at factories for piling up the cost of production, making locally made goods more expensive in regional markets.
Source: Business Daily