BusinessPeople Daily

Why Kenyan exports have not cracked regional markets

George Kebaso @Morarak

Lack of information among Kenyan traders on trade opportunities in East Africa, poor infrastructure, unfair competition from Chinese and Indian traders and the country’s unfavourable taxation regime could be hurting the country’s exports in the region.

Low value addition of most of the country’s products, unfavourable taxation measures such as value added tax, and industrial development fees among others, make Kenyan manufactured goods five per cent more expensive compared to those of her neighbours.

The Export Promotion Council (EPC) said yesterday there are ready opportunities in the manufacturing sub-sectors that have been made even more visible in the Big Four agenda policy.

The Council has listed about 25 products that have a ready market in Uganda but that require value addition.

“Kenya’s export potential to Uganda is immense. The country has the highest supply capacity in chewing gum. Portland cement, equally is the product that faces the strongest demand potential in Uganda as well as undernatured ethyl alcohol, and beer made from malt,” EPC Chief Executive Officer, Peter Biwott said yesterday.

He said that Kenyan traders must take deliberate steps to succeed in the export potential the country presents but they also must rally behind the Big Four agenda policies and implement it by investing in value addition.

Biwott said last year’s drought in the country took a huge toll on agricultural production resulting in Kenya turning to Uganda for maize and milk imports.

This combined with entry of other cheap imports from Uganda and a depreciated value of the Kenyan shilling has seen the value of imports from her neighbour race past Kenya’s exports for the first time.

As of June, the value of imports from Uganda recorded a high of Sh30.2 billion compared to Kenyan exports there, which were valued at around Sh25 billion. However, Kenya remains the biggest exporter among the five EAC member states having sold up to Sh62 billion against Sh42 billion imports in 2017.

Data from the Ministry of East African Community shows that manufactured products from Kampala have flooded the Kenyan market, most of them having been imported cheaply from outside the regional market.

Currently, Kenya lags behind at number four as the biggest exporter to Uganda, after China, India and United Arab Emirates (UAE). In Tanzania Kenya comes sixth after China, UAE, India, and South Africa.

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