Kenyan Exports to Uganda Drop by 2 Billion Shillings

Kenyan exports to Uganda has dropped for the last two consecutive months according to the statistics released by the Kenya Bureau of Statistics.

Kenya lost two billion shillings in export incomes. Data at the Kenya Bureau of statistics indicate that exports from Kenya to Uganda dropped to 4.7 billion shillings in the month of September from 6.7 billion shillings recorded during the month of August.

According to economic analysts, the drop in the export value between Kenya and Uganda may be as a result of the coming into effect of the Single Customs Territory that has made it possible for Uganda to import directly and which also has restricted the entry of some Kenyan goods to other countries. This implies goods that Kenya used to export to Uganda are no longer needed as Uganda orders them from other countries.

The Kenyan manufacturing sector is not as strong as such and this might have been a contributor too. The Ugandan manufacturing sector in the recent past has emerged more competitive than that of Kenya. This competitiveness has been attributed to the stability of the Ugandan currency against the dollar. There has also been a gradual reduction in the cost of energy in Uganda as compared to Kenya.

This implies that most firms in Uganda are producing their own goods at a cheaper production cost as compared to Kenya.

The business environment has been termed as hostile by some quarters because of the high cost of doing business. The energy sector which is key to the economic sector is far much expensive and it is the one that has always pushed up the production costs.

At the moment, according to the ranking of the World Bank, Uganda is at position 122 from position 135 in the previous edition while Kenya is at position 108 having risen from position 129.

Article by Juma Fred.