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Exports from China to Kenya fell in 2023. Given that China is Kenya’s primary supplier of products, this unusual occurrence occurred in the midst of Kenya’s rising cost of living and a growing cap on commodity values. This rate of drop has not been seen in recent years, including during the Covid-19 pandemic.
According to data from China’s General Administration of Customs (GACC), China’s exports to Kenya in 2023 will be worth $7.87 billion (Ksh1.26 trillion at current currency rates).
This represents a 1.11% decrease from the $7.96 billion (Ksh1.27 trillion) that Asia’s largest market reported exporting to Kenya in 2022.
This figure also represents a rarity in both countries’ commercial history, as not even the Covid-19 lockdown resulted in this amount of reduction.
“For instance, despite Kenyan authorities indicating that imports from China declined from Ksh376.72 billion in 2019 to Ksh361.36 billion in 2020 during the Covid-19 pandemic, Chinese data shows the country exported goods worth Ksh576 billion to Kenya in 2020, an increase from Ksh510.1 billion in 2019,” the report said.
The report also adds that the fall in Chinese imports is due to dampened demand caused by Kenya’s rising inflation rate.
“Imports declined by 14.9 percent in the 12 months to October 2023 compared to a growth of 14.7 percent in a similar period in 2022, mainly reflecting lower imports across all categories except food,” according to the Central Bank of Kenya.
Simultaneously, the gap between the value of Chinese commodities stated by Chinese officials and the value recorded by Kenyan authorities is widening.
The gap was Ksh133.38 billion ($833.63 million) in 2019, but in just three years, it has grown to nearly half a billion, reaching Ksh487.24 billion ($3.05 billion) in 2022.
Tax issues were also a factor in the market collapse.
“Specific tax measures to be implemented include…to establish a clear framework on the exchange of information (EOI) with other tax jurisdictions for both domestic taxes and customs to ensure the flow of information e.g., valuation of high-risk imports from China and Transfer pricing paused by multinationals,” the Treasury Department said in a statement.
