Kenya’s trade deficit hit Sh1.11 trillion in the 10 months to October on the back of higher industrial goods, fuel and government imports. Data by the Central Bank of Kenya (CBK) shows the gap between merchandise imports and exports widened by 37.7 percent from Sh807.01 billion in a similar period last year when low fuel prices and reduced demand for consumer goods kept a lid on imports. This year, government imports have gone up by 31 percent to Sh63.5 billion, with the most significant jump seen in October when they hit a new monthly high of Sh12.3 billion.
The State purchases products such as military weapons and vehicles, railway spare parts, drugs, vaccines and medical equipment. It also imports food when there is a shortage in the country. The county’s total import bill — both government and private sector — rose by 28.4 percent to Sh1.72 trillion in the period, eclipsing the growth in exports, which went up by 14 percent to Sh608.4 billion. A widening trade deficit diminishes the country’s foreign currency reserves, which are used to pay for the imports, and in the process weakening the shilling.