US surpasses Uganda as the top buyer of Kenyan goods.
The United States has surpassed Uganda as the largest buyer of Kenyan goods, putting an end to Kampala’s dominance as Kenya’s top export market.
According to official data, exports to the United States increased 47 percent to Sh38.8 billion in the first half of the year, owing to increased clothing sales.
Kenyan exports to Uganda fell slightly in the first half of the year, falling to Sh36.2 billion from Sh36.3 billion in the same period last year.
Over the years, Kampala’s list of Kenyan imports has shrunk as investors set up factories in the country to manufacture goods previously imported from Nairobi, such as edible oils and cement.
America also surpassed the Netherlands, which is Europe’s primary entry point for Kenyan flowers, emphasizing the significance of a new trade agreement between Nairobi and Washington.
Kenya has long sought a full free trade agreement with the United States, and the Trump administration launched talks with the East African country in 2020 to lower bilateral tariffs.
However, the Joe Biden administration, which has avoided traditional trade deals, did not reopen those discussions.
The Africa Growth and Opportunity Act (AGOA), a preferential trade program for Sub-Saharan African countries, provides Kenya with significant duty-free access to the US market, but it expires in September 2025.
According to the Congressional Research Service, Kenya exported Sh80.8 billion in goods to the United States in 2021, with more than 75 percent entering duty-free under AGOA, primarily apparel, macadamia nuts, coffee, tea, and titanium ores.
In 2021, the United States exported Sh66.2 billion in goods to Kenya, with aircraft, plastics, machinery, and wheat being among the most important categories.
On his first official foreign trip since being sworn in as Kenya’s fifth president on Wednesday, President William Ruto advocated for increased trade between the two countries.
“Kenya welcomes increased trade with the United States.” “Creating a conducive and enabling business environment will be a priority for my administration in order to encourage domestic and foreign direct investments that will create jobs and wealth,” President Ruto said at a US-Kenya Executive Business Roundtable in New York.
Kenya is benefiting from a shift in US foreign policy toward Africa, as the world’s largest economy increases its presence on the continent to counter rising Chinese influence.
China has grown to become Kenya’s largest bilateral lender and import source, with imports increasing 9.0 percent to Sh227.9 billion and accounting for 18.2 percent of total imports in the six-month period.
Uganda has been the largest buyer of Kenyan supplies over the last decade, making it an important economic partner for Nairobi. However, this is changing, with the landlocked country warming up to Tanzania with plans to link their economies via a crude pipeline and standard gauge railway line, abandoning the previously planned Kenyan routes.
Exports to Pakistan, primarily tea, increased by 22% to Sh31.3 billion, making it Kenya’s third largest market by June of this year.
Pakistan was followed by the Netherlands, which received Sh29.7 billion, and the United Kingdom, which received Sh23.7 billion.
The Biden administration launched a new strategic trade and investment partnership with Kenya in July, replacing an agreement signed by ex-President Trump’s administration with Nairobi.
According to the US Trade Representative’s Office, the US and Kenyan governments are developing a roadmap for engagement in ten areas, including agriculture, digital trade, climate change action, and trade facilitation and customs procedures.
The launch follows the US government’s announcement last year that it would review Trump-era bilateral trade negotiations with Kenya over a potential free trade agreement in 2020. (FTA).
Mr. Trump and President Uhuru Kenyatta announced their intention to begin formal trade talks in February 2020, kicking off activities that were expected to culminate in a deal within two years and ahead of the August 9 General Election.
The bilateral talks were put on hold following the American presidential elections in November 2020.
Mr. Biden was sworn in as US President in January 2021, ending Mr. Trump’s turbulent four-year presidency.
A change of guard in the White House has cast doubt on the FTA deal, with Mr Biden reversing many of the Trump administration’s policies.
Kenya is vying to become a manufacturing hub for American companies looking to relocate or diversify their operations away from Asia.