Africa Economy: Kenya's trade deficit hits record high as imports rise

Increased imports of aircraft, vehicles and equipment have pushed Kenya's trade imbalance to a record high of 12.5 billion U.S. dollars, an official report says.

Imports rose to 18.3 billion dollars in the financial year ending June, up from some 17.4 billion dollars last financial year, according to the report from the Central Bank of Kenya released Thursday.

Exports dipped to 5.8 billion dollars from 6.06 billion dollars last financial year.

The central bank attributed the situation mainly to increased imports of machinery and equipment used in the infrastructural projects in the transport and energy sectors.

The value of merchandise imports rose by more than 6.84 million dollars, with machinery and transport equipment making up 26 percent of the rise, the report said.

Other reasons include a weaker Kenyan shilling which has made imports expensive and a drop in the prices of key exports like tea in the international market.

Most of the imports during the period are from China (17 percent), India (16 percent) and the European Union (14 percent). Imports from other Africa nations accounted for 9 percent.

Exports to major destinations like Uganda and Tanzania have dropped significantly, while those to the Netherlands, the United States and Germany have slightly increased.

"The share of exports to China stabilized at 1 percent," the report said.

As the imports rise, the country's usable foreign exchange reserves have been declined to 6.3 billion dollars last week, down from 7.2 billion dollars in March. Endit