NAIROBI, March 25- Kenya’s trade deficit has widened according to a report issued by the Central Bank of Kenya (CBK) Tuesday.,
In its February economic appraisal, CBK said the current account balance deteriorated to a deficit Sh75.4 billion in 2007 compared to a deficit of Sh33.2 million in 2006.
The trade deficit gap widened from Sh238.6 billion in 2006 to Sh307.7 billion in 2007.
It reflected an increase in imports by 22.6 percent to Sh558.9 billion and a lower growth rate of exports to 16.5 percent and Sh257.5 billion in 2007.
There was an increase in the value of merchandise imports which reflected ‘increased imports of machinery and transport equipment, manufactured goods, chemicals, petroleum products and other miscellaneous merchandise,’ the February Monthly Economic Review said.
The increase in the value of machinery and transport equipment imports by Sh34.4 billion was due to increased imports of vehicles, industrial and power generating machinery, and telecommunication and sound recording equipment.
The rising value of agricultural commodities such as coffee, tea and horticulture drove export growth.
“The value of coffee exports rose by Sh1.8 billion following improved export volumes and prices, while the value of tea exports rose by Sh2.3 billion on account of higher export volumes as the average export price for tea declined,” the Bank said.
The increase in the value of horticulture exports by Sh8 billion was largely attributed to increased export volumes.
Rises in the export value of manufactured goods by Sh5.7 billion largely reflected increased exports of cement, metal manufactures and processed leather.
“Coffee, tea and horticulture collectively accounted for 36.7 percent of the total value of exports in 2007 compared to 37.2 percent in 2006,” the report said.
The main destination for Kenya’s exports in 2007 were Uganda (12.2 percent), the United Kingdom (10.5 percent), Tanzania (8.1 percent), the Netherlands (8 percent) and the United States of America (7 percent).
“Overall, African countries absorbed 45.1 percent of Kenya’s merchandise exports,” the Central Bank said.
The main sources of imports during the year were the United Arab Emirates (14.8 percent), India (9.4 percent), China (7.6 percent), the United States of America (7.2 percent) and Japan (6.8 percent).