Kenya exports to Uganda rise to $648m in regional trade boom
TLDR
- Kenya's exports to Uganda exceeded Ksh100 billion ($618 million) in November 2023, driven by the weakened currency.
- The depreciated Kenyan shilling made Kenyan goods more affordable in Uganda, boosting export value.
- Iron, steel, and cement industries in Kenya benefited the most from this trend.
In November 2023, the value of Kenya's exports to Uganda surpassed the Ksh100 billion ($618 million) mark for the first time, driven by a weakened currency that rendered local goods more affordable in the neighboring country.
Official data reveals that Kenya exported goods valued at Ksh105 billion ($648.95 million) to Uganda in the year up to November of the same year, coinciding with a period during which the Kenyan shilling depreciated by 17.45% against the Ugandan shilling.
The depreciation of the Kenyan shilling has implications for the cost of Kenyan products, making them more competitively priced in Uganda. This trend is particularly beneficial for local producers of iron, steel, and cement, which are key commodities exported to the East African neighbor. As of the end of 2022, a Ugandan trader needed 30.18 units of their country's currency to obtain one Kenyan shilling.
Key Takeaways
Kenya, Uganda, and Tanzania are founding members of the East African Community (EAC), a regional free trade area comprising eight countries. Within the EAC, Kenya's exports to Uganda and Uganda's imports from Kenya benefit from tariff-free arrangements. This economic integration fosters trade cooperation among member states. Despite the tariff-free status, Kenyan exports to Uganda have faced strong competition from similar products originating from China and India, even though the latter attract higher duties. Notably, local cement producers, as well as iron and steel manufacturers, have found a competitive edge in this scenario, given that these products constitute Kenya's primary export commodities to Uganda. Kenya's exports to Uganda also include common salt, oil, perfumes, and palm oil. Beyond the EAC, both are members of the Common Market for Eastern and Southern Africa (Comesa), another free trade area.
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