Kenyan Exports Cannot Keep Up With Imports

Even as trade grows, the gap between what Kenya buys and what it sells continues to widen.

Kenya's merchandise trade reached a new high in 2024, hitting KSh 3.82 trillion, up 5.5% from the previous year. But beneath the headline growth lies a persistent structural vulnerability: Kenya continues to import far more than it exports. Despite a 10.4% rise in exports, imports outpaced them in absolute terms, expanding by KSh 94.3 billion—effectively erasing much of the export gain. The result? A trade deficit of KSh 1.59 trillion, barely improved from 2023’s KSh 1.60 trillion.

In simple terms, Kenya is running just to stand still. Now let's Chart this.

Exports: Not Enough, Not Fast Enough

Kenya's export performance in 2024 was boosted by a 77.3% rise in re-exports, which are goods imported and then exported without significant processing. While this signals Nairobi’s growing role as a trade conduit, it also masks a more sobering reality: domestic exports rose by just 2.9%, from KSh 906.3 billion to KSh 932.2 billion.

At this pace, the core engine of Kenyan export value creation—its domestic productive base—is not keeping up with rising import demand.

The economy remains heavily reliant on a narrow basket of commodities such as tea, coffee, and horticulture. These offer limited value addition and are vulnerable to global price swings, climate shocks, and market access constraints.

Imports: A Juggernaut Rolls On

Imports rose by 3.6% in 2024, reaching KSh 2.71 trillion, continuing a long-term trend of import-heavy growth. Even with a marginally slower growth rate than exports, the absolute scale of imports dwarfs export earnings.

1. Commercial imports alone accounted for KSh 2.60 trillion—nearly three times domestic exports.

2. Government imports surged by 77%, driven possibly by large infrastructure or energy-related procurements.

   
   

The import basket is dominated by fuel, machinery, transport equipment, and pharmaceuticals—goods essential for a developing economy, but indicative of an industrial base that relies heavily on the outside world to function.

The Cover Ratio: A Telling Metric

The export-import cover ratio—the proportion of imports that can be paid for using export earnings—rose slightly from 38.6% in 2023 to 41.1% in 2024. While this marks an improvement, it still underscores the stark reality: Kenya earns just 41 cents in exports for every shilling it spends on imports.

This chronic mismatch is not sustainable and exposes the economy to external shocks, debt vulnerabilities, and currency depreciation.

Behind the Numbers: Global Winds, Local Realities

Kenya’s modest improvement in trade metrics took place in a global environment marked by tepid goods trade and surging services exports. According to UNCTAD, global trade reached USD 33 trillion in 2024, with much of the growth concentrated in services (up 9.0%).

Developing economies, particularly in East and South Asia, saw exports and imports grow by 4.0%. In contrast, Africa’s intra-regional trade contracted, highlighting structural weaknesses in regional value chains. Kenya, sitting at the heart of East Africa, remains exposed to these shifting tides.

What’s Holding Back Exports?

Several factors contribute to Kenya’s export underperformance:

1. Low diversification: A heavy dependence on a few agricultural products limits growth.

2. Infrastructure bottlenecks: While improving, port and logistics costs remain high.

3. Value addition gaps: Most exports are raw or semi-processed, forfeiting higher margins.

4. Trade barriers: Non-tariff barriers across East Africa and beyond complicate market access.

   
   

Meanwhile, Kenya is seeing rising imports of high-value finished goods and capital inputs, suggesting that consumer demand and investment continue to outstrip local supply capabilities.

A Surplus in the Shadows

The balance of trade may be stubbornly negative, but the broader Balance of Payments (BOP) turned positive in 2024, with a KSh 176.7 billion surplus, reversing a KSh 134.8 billion deficit the year before. This was aided by narrowing current account deficits and financial inflows, including improved reserve assets and a decline in external liabilities.

However, relying on capital inflows to offset trade imbalances is risky. Should global financing conditions tighten, Kenya could face a squeeze.

An Unsustainable Path

Kenya’s export growth in 2024, though notable, simply cannot keep up with its appetite for imports. The narrowing trade deficit, while welcome, does not reflect structural change—it reflects statistical luck and global currents.

Unless Kenya meaningfully expands its productive base, diversifies its exports, and scales value addition, the country will remain stuck in a cycle of external dependence, exposed to financial and geopolitical shocks beyond its control.

The numbers are clear: Kenya is buying faster than it is earning.