Kenya to pursue export-led economic growth to boost forex earnings

Source: Xinhua| 2019-06-19 21:16:31|Editor: xuxin
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NAIROBI, June 19 (Xinhua) -- Kenya plans to pursue an export-led economic growth model in order to boost foreign exchange earnings, a senior government official said on Wednesday.

Peter Munya, cabinet secretary of the Ministry of Industry, Trade and Cooperatives, told journalists in Nairobi that Kenya is keen to reverse the trend of a growing trade deficit.

"The country has laid down an export strategy whose implementation is currently being fast-tracked to ensure exports growth is faster than imports with a view to bridge the trade deficit," Munya said.

Government data indicated that Kenya's exports grew from 594 billion Kenyan shillings (about 5.94 billion U.S. dollars) in 2017 to 6.13 billion dollars in 2018 while imports hit around 17.6 billion dollars last year.

Munya said that a strong export performance will require vibrant local industries that can produce goods competitively.

"We have also rolled out a number of fiscal incentives to catalyze the expansion of the manufacturing sector," he added.

Munya said that tea, horticulture, articles of apparel and clothing accessories, coffee, titanium ores and concentrates accounted for about 62 percent of merchandise exports last year.

"This is one of the reasons why Kenya is focusing on diversifying export products with a view to increase foreign exchange, wealth and job creation in the country," he added.

"Due to the complex dynamics of international trade, it will be difficult to achieve a trade surplus," Munya said.

The ministry of trade also plans to purse country-specific strategies in growing volumes and value of exports.

"We hope to leverage on the bilateral and multilateral trade agreements we have signed around the world to ensure we boost our exports," Munya said.

He said that Kenya will concentrate on enhancing exports to the African continent, which in 2018 absorbed about 35 percent of all of Kenya outbound merchandise trade.

Among the top 25 Kenya exports destination countries, ten are from Africa, including Uganda, Egypt, Rwanda, Sudan, Tanzania, Munya said.

He noted that Kenya has a competitive advantage in the manufacture of goods as compared to many other African countries.

"Kenya will grow its exports through region-specific interventions such as Kenya's push for the realization of the African Continental Free Trade Area (AfCFTA) that guarantees Kenya a market opportunity of about 1.3 billion people," he added.

He revealed that ongoing efforts to improve Africa's infrastructure connectivity will also enhance Kenya's trade with the Africa by reducing the cost of cross-border trade and logistics.