Central Bank of Kenya. FILE PHOTO | NMG Kenya’s export earnings for the first half of the year rose at the fastest pace in a decade, lifted by increased sales of horticultural produce and rising prices of coffee.
Total exports amounted to Sh368.79 billion between January-June from Sh317.18 billion, a growth of 16.27 percent over a similar period a year ago.
This was the highest growth since 2011 when exports bumped 23.37 percent, provisional statistics collated by the Central Bank of Kenya (CBK) show.
“Growth rates [in exports] have been positive,” CBK governor Patrick Njoroge said on July 29 about exports performance for the first half of 2021.
“Horticulture has remained strong… [while] there has been a significant increase in coffee prices worldwide as a result of frost in Brazil [the world’s largest coffee producer]. We will benefit from that in terms of prices in the market.”
The jump in exports’ earnings, however, failed to narrow Kenya’s goods trade deficit — the gap between imports and exports — because imports, including crude oil, machinery and materials for factories, grew at a faster pace of 27.71 percent to Sh991.75 billion.
This widened the goods trade gap 35.61 percent to Sh622.95 billion from Sh459.38 billion a year earlier.
A persistently higher trade deficit, economists say, slows down the creation of new jobs for growing skilled youth as most revenue earned in Kenya is spent on goods from foreign factories, raising production and job openings there.
This also piles pressure on the shilling as the demand for the dollar outstrips that for local currency.
“Even if exports remain strong over the coming quarters, the rebound in oil prices will increase Kenya’s import bill,” analysts at London-based consultancy Capital Economics wrote in a report on Kenya last Thursday.
“Combined with a slow return of international tourists, the current account deficit will remain wide. This will put downward pressure on the shilling.”Earnings from horticulture — cut flowers, vegetables and fruits — climbed 30.79 percent to nearly Sh73.07 billion, while coffee rose 22.15 percent to almost Sh16.15 billion. NHIF Building in Upper Hill, Nairobi. FILE PHOTO | NMG A number of law changes target the National Hospital Insurance Fund (NHIF) in what is expected make the State insurer better in terms of covering more people and more complex diseases at a time out-of-pocket medical bills are a big worry.Among others, there are plans to make NHIF contributions compulsory, have employers match payments by their […]
