Kenya’s trade deficit nearly hit Ksh500 billion ($5billion) in the first five months of the year, official statistics show, signalling pressure on the shilling and slowing down growth in new jobs.
The deficit – the gap between imports and exports – widened by 8.66 per cent to Ksh494.26 billion ($4.9 billion) between January and May from Ksh454.86 ($4.5) billion in similar period in 2017, data released last week by the Kenya National Bureau of Statistics (KNBS) indicate.
Imports increased by nearly Ksh58.12 billion ($578), or 8.26 per cent, to Ksh761.28 billion ($75.5 billion), while exports rose by 7.53 per cent to Ksh267.02 billion ($2.6).
A persistently higher demand for imports than exports may mean Kenyan jobs are being lost to factories in major source markets such as China and India which together shipped in goods worth Ksh249.57 billion ($2.5) in the five-month period.
“There’s an impact on jobs because some of the imports coming from the Far East such as India and China are textiles products which are quite cheaper and that’s hurting the local market,” Genghis Capital senior research analyst Churchill Ogutu said on phone.
“Time and again, the government has been trying to revamp that sector (textiles), but with the cheaper imports (it has not been successful) and something has to be done to arrest that trend.”
The shilling has nonetheless been relatively stable, averaging 100.67 units to the dollar in May from 102.92 in January, thanks to strong forex reserves.