Kenya Balance of Trade
Kenya recorded a trade deficit of 70063 Million KES in May of 2013. Kenya Balance of Trade is reported by the Central Bank of Kenya. Kenya Balance of Trade averaged -27869.32 Million KES from 1998 until 2013, reaching an all time high of -2175 Million KES in June of 1999 and a record low of -89852 Million KES in August of 2011.
Agricultural products are central to Kenya’s export industry with horticultural in Kenya and tea in Kenya being the most important. Other export items include textiles, coffee, tobacco, iron and steel products, petroleum products, cement. Kenya main exports partners are UK, Netherlands, Uganda, Tanzania, United States and Pakistan. Kenya imports mostly machinery and transportation equipment, petroleum products, motor vehicles, iron and steel, resins and plastics. Kenya main import partners are India, China, UAE, South Africa, Saudi Arabia, United States and Japan.
However, African countries are losing out to world economies at international forums owing to poor negotiating skills. This is because delegates from Africa are usually outsmarted on various issues by their counterparts in the developed world.
Some of the areas they lose out on include trade, climate change, natural resources exploitation, multilateral talks and security matters.
United Nations Conference on Trade and Development Secretary-General designate Mukhisa Kituyi stressed the need for enhancing capacity of African mediators to enable them negotiate tightly from a regional perspective.
Kenya Balance of Trade: Push agenda
Kenya Private Sector Alliance chairman Vimal Shah also observed Kenyan negotiators have been outsmarted by witty mediators from developed countries on major global trade matters.
He added that the sharp skills has enabled developed world push their agenda.
“The negotiations on the EAC integration has taken longer time than expected because negotiators from the region’s partners lack the necessary skills to discuss issues at hand,” Vimal said in a telephone interview. “Even at other forums such as the World Trade Organiation (WTO), we are beaten by delegates from advanced countries because our negotiators are not proactive.”
Vimal said most negotiators sent by Government ton global forums are not conversant with issues at hand.
“Our representatives are influenced to adopt issues which do not have their inputs and thus become difficult to implement them locally,” he added.
There has been concern over the calibre of delegates sent to represent African countries in international forums discussing various matters such as trade, security among others.
The Institute of Economic Affairs Chief Executive Kwame Owino said Kenya has been at a loss by sending few delegates to represent the country at global meetings. He said this often result in them being outnumbered by their counterparts from other countries’ mainly from the developed world to push issues at hand.
“We have lost in the global meetings because fewer delegates represent us and they cannot match those of developed world,” Owino stated.
Kenya Balance of Trade: International trade
“Owing to few representatives we are not represented in some sessions hence leading to us missing crucial deliberations.”
He however stated over the years, the quality of delegates has improved due to collaborations between the Government and private sector.
Dr Kituyi also called on the East African Community (EAC) countries to train negotiators so that they can master the art of negotiating in international trade to protect interests of their regions.
He noted that the training the delegates will strengthen the ongoing integration efforts, for example, in the EAC region. “Our negotiators need to be well prepared to participate in global forums discussing issues such as the harmonisation in the sharing of natural resources,” Kituyi stressed.
“Other issues include multilateral negotiations in WTO, United Nations Framework Convention on Climate Change as well as cooperation on security and food security.”
Kituyi made the remarks in a Nairobi hotel early this week during a public lecture themed, “Regional Integration for Sustainable Development in East African Community” organised by the Consumer Unity & Trust Society.
The Consumer Unity & Trust Society International Secretary-General Pradeep Mehta, urged the countries to forget their cultural backgrounds and strive ahead to enforce integration.
EAC Secretary General Richard Sezibera who gave the key note address said fast-tracking development will strengthen the region’s desires of attaining a middle income status in the current generation.
After finding Oil and Natural gas, this can be one way to correct this. This will mean reduction or zero imports of oil consumed domestically and further export would mean these natural resources impacting BOT from both exports and imports.
Utilization of our Kenya land more efficiently is something that should also be on the table. Currently Kenya land already serviced by roads and not utilized is approximately 5 million acres. A taxation of all lands that is registered as private land that is over 500 acres and is touching any of the national and international serviced roads with a depth of 5 km both sides would immediately lead to production of more food supplies. The deficit in BOT caused by food importation would instantly be reduced.
Kenya is now ripe for car assembly plants, technology industries, textile production plants and others. With 48 Executive governments that can generate business opportunities, the balance of payment can be reduced through development of industries in Kenya that can produce some of the goods imported and reduce the growth of trade deficit. Kenyans abroad can lead this by using Constitution Article 185 (4) A county assembly may receive and approve plans and policies for—(a) the management and exploitation of the county’s resources; and (b) the development and management of its infrastructure and institutions.
More agricultural exports and better prices could also be a factor that Kenya could consider 2013 – 2017. This again can be achieved from more production of export goods through better utilization of land.
Kenya cannot continue to grow trade deficits at the rate recorded in the last 5 years or the Kenya shilling will continue to weaken to its collapse. Unemployment will also reach levels that may become a security problem. The next president may find it important to move toward balancing trade or having a positive Kenya Balance of Trade rather than increasing the deficit even more. However, governors can also chip in by luring industries to their counties.