NAIROBI, Kenya, Dec 11 – Kenya is losing more than Sh685 billion every year in unrealized export potential, a new competitiveness study shows, exposing deep structural weaknesses that continue to widen the country’s trade deficit despite ready markets across the region and beyond.
The Kenya Export Competitiveness Study (2025), released by the Kenya Association of Manufacturers, finds that the country’s export engine has stagnated for over a decade, with competitiveness falling even as peer economies expand their market share across Africa and globally. The report shows that Kenya currently taps less than half of its available export opportunities.
“According to the International Trade Centre (ITC), Kenya has an unmet export potential of USD 5.3 billion, and nearly USD 10 billion in broader export opportunities that remain out of reach, not because the markets are unavailable, but because we have not consistently aligned our competitiveness agenda to unlock them.”
The USD 5.3 billion (Sh685 billion) cited exceeds Kenya’s annual trade deficit and represents more than four percent of GDP. The broader USD 10 billion (Sh1.29 trillion) reflects long-term opportunities that remain out of reach due to longstanding structural constraints.
Although Kenya enjoys preferential access to nearly half the global market through the EAC, COMESA, AfCFTA, the EU and UK EPAs, and AGOA the study concludes that the country’s challenge is “a national competitiveness deficit, not a market-access problem.”
Value-added sectors such as building materials, agro-processing, pharmaceuticals, apparel, chemicals, plastics and automotive components account for more than half of the missed Sh685 billion. Many of these products already have established regional demand, but firms are unable to scale due to domestic bottlenecks and prohibitive costs.
The study estimates that Kenya is additionally forfeiting Sh260 billion annually in lost revenue, market share, investment and jobs because of slow reforms. Half of these losses risk becoming permanent within three years as regional competitors including Tanzania, Uganda, Ethiopia and Egypt consolidate their positions. Kenya’s share of manufactured exports within the EAC has already fallen from 59 percent to 38 percent over the past decade.
The report attributes the losses to fiscal and regulatory drag, high energy costs, logistics inefficiencies, import dependency, and a policy credibility gap that discourages long-term investment. These constraints create an “invisible surcharge” on every Kenyan export, raising costs and reducing reliability, ultimately pushing buyers toward more competitive producers.
The study warns that unless Kenya accelerates coordinated, system-wide reforms, it risks locking itself out of regional and global value chains. With Sh685 billion in annual export earnings left on the table, the report concludes that Kenya’s challenge is not the availability of markets but its ability to compete.
