China's exports to Kenya fall in 2023, defying historical trends

Kenya-China trade sees rare decline in 2023 amidst high living costs.
China's exports to Kenya drop by 1.11% compared to 2022 figures.
Factors include muted demand, rising inflation, and taxing complications.

Data from the General Administration of Customs of the People’s Republic of China (GACC), as seen in the East African news publication, showed that China exports to Kenya in 2023 was worth $7.87 billion (Ksh1.26 trillion at current exchange rates).

This signifies a decline of 1.11% compared to the $7.96 billion (Ksh1.27 trillion) that Asia's largest market says it exported to Kenya in 2022.

This figure also signifies a rarity in both nation’s trade history, seeing as not even the Covid-19 lock down gave rise to this level of decline.

“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 East African report stated.

The report also notes that the decline in imports from China is a result of muted demands, which was brought about 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,” the Central Bank of Kenya stated.

Simultaneously, the disparity between the value of Chinese commodities indicated by Chinese officials and the value reported by Kenyan authorities is growing.

The difference was Ksh133.38 billion ($833.63 million) in 2019; however, in only three years, it has grown to almost half a billion, reaching Ksh487.24 billion ($3.05 billion) in 2022.

Taxing complications also played a part in the market decline.

“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 National Treasury stated.