Kenya Slowly Loses Grip on EAC Market

{{Thousands of jobs are on the line as Kenya’s manufacturers lose their market share in the East African Community.}}

This has placed the country’s dominance of the regional market — which has a gross domestic product of $80 billion (Sh7 trillion) — in jeopardy.

According to data from industry experts and the recently released Economic Survey 2014, Kenya’s dominance in intra-EAC trade the past year has declined considerably as the manufacturing sector reels from new double taxation policies.

Slowed growth “Kenyan exports to the EAC region have reduced by a total of 7.4 per cent from about Sh134 billion in 2012 to Sh124 billion in 2013,” reads the Economic Survey.

This is despite the output in Kenya’s manufacturing industry growing by 4.8 per cent last year, compared to 3.2 per cent in 2012. According to the survey, increased production of agricultural produce, particularly in the sugar and horticulture sectors, buoyed Kenya’s manufacturing industry.

This led to an increased volume of output valued at a total Sh1 trillion. However, a deeper analysis of the figures, and cross-referencing trade balances between Kenya, Uganda, Rwanda and Tanzania, has Kenyan manufacturers worried that they may be losing ground to their regional counterparts.

“The volume of exports to Tanzania reduced from Sh46 billion to Sh40 billion, while exports to Uganda also reduced from Sh67 billion to Sh65 billion, and to Rwanda from Sh16 billion to Sh13 billion,” said Ms Phyllis Wakiaga, the head of policy and research at the Kenya Association of Manufacturers (KAM).

“The fact that countries in the EAC region are some of the biggest importers of Kenyan goods, this trend will be retrogressive to the country’s manufacturing industry and the economy.”

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