Govt to narrow the exports-imports ratio

The government will in the next four months develop a strategy that seeks to narrow the widening gap between Kenya’s imports and exports.

This is in an attempt to put a lid on the country’s rising import bill which has been blamed for the shilling’s continued depreciation in value.

Last year, the Kenya shilling depreciated by 11 percent against the U.S Dollar to break through the 100 shilling mark to the Dollar.

While the shilling’s depreciation was largely blamed on the strengthening of the Dollar against all major currencies, a domestic factor was also to blame for the shilling’s slide; The widening gap between Kenya’s imports and its exports, also known as the current account deficit.

“Last year we recorded 537 billion shillings worth of exports and imports Ksh 1.6 trillion, so deficit was 1.1 trillion, ten percent current account deficit. You can see the pressure it has put on the exchange rate,” said Dr. Chris Kiptoo, PS Industrialization.

The gap has more than doubled over the last five years from 537 billion shillings in 2010 to well over a trillion shillings by the end of 2014, a trend the government now plans to arrest in order to stop draining its precious foreign currency reserves.

“Growth in imports is faster than exports. We are going to focus on fixing that, we have a trade policy we will complete that in next four months,” added Dr. Kiptoo.

Kenya’s main exports comprise of agricultural goods such as tea, coffee and horticultural produce.

The country, however, imports fuel, industrial inputs and machinery.

Among the strategies the government intends to put in place is the diversification of Kenya’s export markets.

Nigeria, Africa’s largest economy and most populous nation, is one such market.

“Nigeria has a list of banned goods, about a hundred. We have agreed to draw a programme that will give us some special bilateral status. We cannot export dairy, leather etc, we have agreed on how to solve that,” said Adan Mohammed, CS Industrialization.

“Within the next sixty days, we have agreed to draw a list of what we must achieve out of those bilateral discussions.”

The government’s latest commitment on trade comes 6 months ahead of the Fourteeth United Nations Conference on Trade and Development, scheduled for July in Nairobi.

Nairobi will host the meeting for the second time in fourty years.