Kenya is indeed expected to rise above the waves of COVID 19 pandemic in terms of economic recovery according to the 23rd Edition of Kenya Economic Update recently launched by World Bank. According to the Economic Survey Report 2022, Kenya's real GDP grew by around 7.5 per cent in 2021, compared to 0.3% growth realized in the previous year.
There has been gradual, normalization in economic activity in most sectors, including manufacturing and the exports sector. Despite weaker global economic backdrop due to the effects of the global pandemic, Kenya’s resilience in most sectors remains certain with the total exports in 2021 growing to Ksh. 743.7 billion compared to Ksh. 643.7 billion in 2020, presenting an increase of Ksh. 100 billion (15.5%).
Kenya’s major exports are flowers, coffee, tea, fruits, vegetables, and textiles. The focus also includes, leather and Footwear, Metal and Allied, Chemical and Allied, Pharmaceutical and Medical Equipment, Plastic and Rubber, Light Engineering, Automotive parts, and Furniture.
For services, Kenya exports considerable quantities of professional services globally including nurses, doctors, social workers, teachers, engineers, architects, economists, financial analysts, accountants, software developers and scientists. We also export financial and transport services.
Export markets where Kenya’s exports increased according to the 2021 Export Performance Report include Uganda (Kshs 6.9 bn), Tanzania (Kshs 5.5 bn), Rwanda (Kshs 3.5 bn), Pakistan (Kshs 3.3 bn), China (Kshs 3.2 bn), UAE (Kshs 2.6 bn), USA (Kshs 2.0 bn), and Netherlands (Kshs 1.2 bn).
Boosting the export basket
In order to increase and improve the export trade, the Ministry of Industrialization, Trade and Enterprise Development and its key agencies like Kenya Export Promotion and Branding Agency are implementing the Integrated National Export Development and Promotion Strategy to help our Micro, Small and Medium Enterprises across the country innovate and realize their potential in new value chains and products.
The move is also geared towards narrowing the balance of trade deficit through an envisioned export growth rate of 25% by the end of this year aligned to The Integrated National Export Development and Promotion Strategy (INEDPS) and in furtherance to the achievement of 10% annual year on year export growth by 2030 as envisioned by the Vision 2030.
The Kenya Export promotion and Branding Agency seeks to contribute to this target by growing exports by 6.5% annually by the end of 2022 through diversifying Kenya’s export products and markets, as outlined in its 3-year strategic plan.
For all concluded trade agreements, we are keen to develop implementation strategies.
The Ministry has also developed an AFCFTA Implementation and Communication Strategy to ensure that the Kenya National AfCFTA implementation Strategy among other aspects increases Kenya’s GDP, overall exports, and Kenya’s exports to all African sub-regions as well as boosts manufacturing sector. In 2021, Kenya’s exports to GDP stood at 10.57%; 0.93% higher than the contribution of exports to GDP in 2021 (9.64%).
Of Products quality and other challenges hindering exports
One of the biggest impediments to our export performance is the question of quality and pricing of our products. Consumers in our target market are quality and price sensitive. We must therefore polish our products and ensure they meet international standards in terms of quality to be able to survive the stiff competition in the global market.
Sanitary and phytosanitary (SPS) measures and standards are meant to ensure consumer protection and confidence in domestic or imported food and feed.
To effectively facilitate trade and narrow down trade balance between countries, Kenya has entered various SPS related frameworks which further domesticate the SPS Agreement including African continental free trade area (AfCFTA), EAC-COMESA-SADC Tripartite, COMESA, EAC and a few bilateral agreements including EAC-EU- EPA.
Kenya is therefore keen to pursue knowledge sharing and technology transfer in laboratory testing, inspections, agriculture and seed production methods, agro-processing and value addition and treatments in the agriculture and food sectors.
All players, firms producing for domestic markets as well as export markets; and domestic consumers and consumers in export markets, will benefit.
Aside from high standards in international markets, other challenges include market access issues, stiff market competition, high cost of doing business, among others.
The Kenya Export Promotion and Branding Agency is engaging with Cross Border Management (with our lead trade partners’ Kenya, Uganda, Tanzania, Ethiopia with a view to understanding and alleviating challenges to trade across borders and transit to hinterland economies. We are also engaged on research specific to markets to isolate opportunities and market access conditions. Some of the products Kenya can produce efficiently and that have demand in Africa include Medicaments, Plastics and Paper Containers, Semi-Manufactured gold, Prefabricated buildings
Additionally, the Agency together with the Ministry of Industrialization, Trade & Enterprise Development is charged with the role of formulating and implementing policies that are expected to aid the realization of the national goals aligned towards job and wealth creation.
This is being done through offering fiscal support by establishing the MSE Development Fund, as provided for under Part 5 of the MSEA Act, 2012, section (51(1)), which will provide affordable credit facilities to the MSMEs.
Once this fund is operationalized, it is expected to specifically address challenges attributed to limited access to affordable financing by financing the promotion and development of MSEs, providing affordable and accessible credit to MSEs, financing capacity building of MSEs, as well as financing research, innovation, and transfer of technology in MSE sector.
As an Agency, we laud our mother Ministry’s support of the national export agenda. We are keen on working with partners like Afri-Exim Bank and other business oriented facilitating bodies to support Export-Import financing mechanism to catalyze availability and access to export trade finance.
This will complement mainstream banking institutions while also meeting unmet needs for exporters in pursuit of the national export development agenda.
Dr. Wilfred Marube, CEO
Kenya Export Promotion and Branding Agency
@wmarube