Increased shipments to Somalia boost Kenya's exports to East African Community to Sh85 billion

Kenya's exports to the East African Community (EAC) surged to a record Sh85.2 billion in the quarter leading up to September 2024, largely driven by increased shipments to Somalia, which became the latest member of the regional bloc in late 2023.

Somalia imported goods and services worth Sh5 billion from Kenya during the period, helping offset declines in trade with other EAC members.

This marks the highest value of exports to the EAC ever recorded.

However, without Somalia's contribution, Kenya's exports to the other EAC member states would have fallen by Sh4.2 billion, or five per cent, to Sh80.2 billion.

Trade with the bloc showed a general decline, with only Rwanda and the Democratic Republic of Congo (DRC) increasing their purchases from Nairobi.

Rwanda saw an increase of Sh778 million (6.7 per cent) to reach Sh12.4 billion in imports, while the DRC saw a growth of Sh523 million, pushing its imports from Kenya to Sh8.1 billion.

The DRC has now surpassed South Sudan as the fourth-largest importer of Kenyan goods within the EAC.

Burundi, on the other hand, experienced the sharpest drop in its imports, falling by 36.9 per cent from Sh2.9 billion to Sh1.8 billion.

Largest exports destination

South Sudan and Tanzania also saw declines of 27 per cent and 10 per cent respectively, while Uganda's imports dropped slightly by 0.62 per cent, although it remains the largest destination for Kenyan exports.

Despite the positive initial impact of Somalia's entry into the EAC, trade between Kenya and its new neighbour has not yet seen significant growth.

Compared to 2023, Kenya's exports to Somalia fell by 5.3 per cent from Sh5.3 billion to Sh5 billion.

However, experts anticipate that Somalia's full integration into the EAC will eventually boost trade across the region, thanks to the free movement of goods, people, and services under the bloc's common market and customs union protocols.

Overall, Kenya's total trade with EAC members decreased slightly by 0.2 per cent, reflecting a broader trend of diminishing regional trade, while its trade with other regions, such as the European Union and East Asia, increased.

EAC's share of Kenya's total trade also fell by 0.57 percentage points, with trade within the Common Market for Eastern and Southern Africa (COMESA) bloc dropping by 1.1 per cent.

Despite its status as the most integrated region in Africa, the EAC continues to struggle with recurring trade disputes, which have hindered growth in intra-regional trade.

This is in spite of the EAC Customs Union, which came into effect in 2005 and is intended to facilitate the free movement of goods, services, labour, and capital.

Meanwhile, trade with countries in East Asia, particularly China, South Korea, and Japan, now accounts for 38.4 per cent of Kenya's total exports and imports, a notable increase from 33.4 per cent in September 2023.