We have mentioned before that the Kenyan economy has a major current account deficit (i.e. imports are much higher than exports) and that this imbalance is one of the structural causes for the recent depreciation of the Kenyan Shilling.
Let’s take a deeper look at the Kenyan import and export markets. What does Kenya import and who are the largest importers? And where does Kenya export its goods?
Here I am reporting the most recent data available from the Kenya Bureau of Statistics, the so-called monthly leading economic indicators, which highlight interesting new dynamics on the period July 2010-July 2011. Let’s look first at the graph above on Kenyan import market.
In the period from July 2010 and July 2011, the United Arab Emirates were the major exporters to Kenya. This is a clear indicator of the huge oil bill that Kenya is paying today. China is in the second place and India is third, followed by South Africa and Japan.
Arguably, the most interesting new dynamic is that India is overtaking China as the second largest trading partner. If we consider only the first 7 months of 2011 up to August India has already overtaken China. This highlights interesting new dynamics between Kenya and the Asian emerging powers.
The graph below instead shows the imports by economic category. We see that industrial supplies have the lion’s share, followed by fuel and capital equipment.
Now, let’s look at exports. Kenya exports mostly to the regional East African market (Uganda, Tanzania and Rwanda) as well as to the UK, Netherlands (read cut-flowers) and the US. I didn’t know that Pakistan was an important export market for Kenyan tea.
And below are the exports by category. I am using the same categories used by the KNBS, although it would be interesting to have more precise details about the export of specific commodities (tea, coffee, cut-flowers, etc). I’ll look into that in one of the future posts. It is interesting to see that industrial supplies are a very important export market.
More info on imports and exports: